Airdrops have become the cryptocurrency ecosystem’s equivalent of stimulus checks over the past couple of years and further proof of this can be evidenced from popular protocols like Uniswap and dYdX which rewarded their early adopters with token drops that are now worth $30,000 to $2 million.
The latest protocol to surprise its userbase with a wallet fattening airdrop was Axie Infinity (AXS), a blockchain-based battle game that has risen in prominence over the course of 2021 as users embrace its play-to-earn (P2E) gaming model.
Data from Cointelegraph Markets Pro and TradingView shows that since bounding off a low of $47.92 on Sept. 21, the price of AXS has stormed 145% higher to establish a new record high at $118.00 as its 24-hour trading volume surged from $421 million to $1.95 billion.
Three reasons for the recent surge in AXS price over the past two weeks include the introduction of staking features for the AXS token, the release of a community airdrop early adopters and the increasing popularity of play-to-earn gaming protocols.
AXS launches staking
The growth of decentralized finance in 2021 has shone a spotlight on the ability of crypto holders to put their tokens to work and earn a yield through providing liquidity or staking.
In an effort to capture some of this momentum, as well as improve the overall tokenomics of the AXS token, the team at Axie Infinity announced the launch of staking capabilities on Sept. 30. This excited members of the community, and to date, holders have already staked nearly 9.8 million AXS in just two days.
And it’s not just your average crypto user getting in on the staking action, as recent tweets show other gaming platforms in the crypto ecosystem, including Yield Guild Games, have announced that they are now staking their AXS holdings as a way to help increase the value of their respective ecosystems.
— Yield Guild Games (@YieldGuild) October 1, 2021
Axie Infinity is currently offering an APR of 240% for stakers with the rewards coming from a dedicated pool of 78.3 million AXS tokens that have been set aside by the team.
AXS airdrops tokens to early adopters
A second reason for the spike in price and activity for AXS was this week’s community airdrop which rewarded users who engaged with the protocol prior to October 26, 2020.
Being a part of the Axie community is an incredibly rewarding experience. Socially, Intellectually, and Financially.
Thank you @AxieInfinity! https://t.co/2NEsU3MlfL
— Artic (@Axie44) September 30, 2021
According to the team, 10,000 wallets were selected based on a snapshot that was taken on Oct. 26 to receive a share of the 800,000 AXS airdrop, depending on the wallet’s level of activity.
The more active users like the pseudonymous Twitter user ‘Arctic’ received larger allocations that are now worth nearly $500,000, while less active accounts received smaller allocations that are nonetheless still significant in terms of dollar value, especially in the more economically disadvantaged parts of the world where many Axie Infinity players reside.
— squarrre (@Sorareuk) September 30, 2021
Related: NFT trading game Axie Infinity launches AXS staking program
The rising popularity of play-to-earn gaming
Another reason for the recent growth seen in Axie Infinity is the strength of the P2E gaming model which many analysts say will be the breakout sector in 2021.
Axie Infinity was actually the game that kicked off the P2E rally earlier in the year and this momentum translated to an uptick in other P2E protocols like Illuvium (ILV), Chain Guardians (CGG) and MyNeighborAlice (ALICE).
The P2E gaming sector of the crypto ecosystem has been gaining momentum in recent months as users begin to discover the benefits of playing a game that rewards participation, as opposed to the dominant free-to-play model which offers in-game purchases but leaves users with little to show after months of gameplay and investment.
According to data from Cointelegraph Markets Pro, market conditions for AXS have been favorable for some time.
As seen in the chart above, the VORTECS™ Score for AXS climbed into the dark green zone on Sept. 26 and reached a high of 87 around 35 hours before its price began to increase by 55% over the next three days.
The NewsQuake™ service from Cointelegraph Markets Pro registered two significant news announcements prior to the price rise, including a listing announcement from Bitstamp exchange and the team’s announcement that AXS staking had launched.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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