Yesterday I checked @Pixels Pixels data, and the amount of tokens deposited in-game exceeded withdrawals, with staking surpassing 100 million tokens.
Sounds like the economic model is improving, and players are willing to keep their funds in the game. But I dug into the token unlock plan today and found a very real issue.
Players and investors are two different groups.
Players spend $PIXEL to buy gear, upgrade, and stake for profits in the game, creating in-game consumption. The project team is also working hard to lock tokens in the game; vPIXEL can't be sold, only spent, and withdrawals come with fees shared with stakers. The direction is clear: reduce outflows from the game to the exchange.
But the sell orders on the exchange aren't coming from players; they're from investors' shares that unlock on a regular monthly schedule.
So far, only 15.42% has been unlocked, with over 4.2 billion out of a total of 5 billion still locked. Private investors hold 14%, the team 12.5%, advisors 9.5%, eco rewards 34%, and the treasury 17%.
These shares are set to be released according to plan until 2029. May 19th will be another round of unlocks, primarily for advisor shares.
Private investors got their tokens at a cost far below the current $0.0075.
Their goal is simple: unlock and sell, cash out. The team and advisors are the same; tokens are compensation for them, not a belief. Eco rewards and treasury tokens will be used for incentives and operations, but ultimately, they'll flow into the market.
So the current situation is
On one side, players are using tokens in-game while the project team desperately tries to keep tokens within the game; on the other side, investors, the team, and advisors are regularly dumping tokens into the exchange as per their plan. The two markets are completely disconnected.
The selling pressure saved by players is nothing compared to the unlock side. With a market cap of $5.8 million, around 91 million tokens unlock monthly, worth about $680,000 at the current price. Even if no players sell tokens this month, that increased supply still needs buyers.
What's more critical is that the motivations of players and investors are entirely different. Players deposit tokens to use in-game, and whether they withdraw depends on how fun the game is and how profitable it is.
Investors unlock to cash out, which has nothing to do with game quality; they sell when due.
That's why the in-game economy is improving, yet token prices are struggling to rise.
because buyers and sellers are not even in the same market. Players consume tokens in the in-game market, while investors dump tokens on the secondary market. The project can only control the game side, not the unlock side.
Unless the project alters the release plan or in-game consumption increases enough to absorb the monthly new supply, this situation will be tough to change.
It seems that in-game consumption is still far from enough. Staking 100 million tokens sounds like a lot, but it's just delaying sell pressure, not eliminating it. Once yields drop or better opportunities arise, those tokens will still come out #pixel .
Pixels as a game isn't bad; its gameplay, social aspects, and update pace are decent.
But a good game and a good investment are two different things. Until the unlocks are finished, token prices are likely to remain pressured by supply.
The above is just my personal opinion and doesn't constitute any investment advice!