GALA 230% Pump Compromised by Hefty Crypto Distribution Schedule
TL;DR GALA gaming tokens have been on a tear recently, with prices more than doubling in a week. However, the tokenomics model of GALA raises questions about its sustainability and the ability for prices to remain elevated in the long-term. With daily unlocks of around $400,000 or $11 million per month, the recent price pump could be short-lived. Meanwhile, blockchain gaming is expected to take off in 2021 as developers look to build great web3 games.
The GALA blockchain gaming token has been on a rip recently. However, its tokenomics model raises a few questions.
GALA gaming tokens have more than doubled in price over the past week. Furthermore, GALA has gained 18.6% on the day and was briefly up 232% from its Dec. 30 low of $0.0154
Gala is a decentralized blockchain gaming ecosystem with a claimed 16,000 player-run nodes across the globe. At launch, there was no premine, presales, or early access to the tokens, and seemingly no venture firms were involved.
However, it unlocks a lot of tokens every day, which could put more selling pressure on the asset and GALA prices.
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GALA/USD Chart by TradingView
Gala Tokenomics Come Into Question
According to the UnlocksCalendar Twitter feed, Gala’s aggressive distribution could induce more selling pressure. With a daily unlock of around $400,000 or $11 million per month, the recent price pump could be short-lived.
For context, $GALA daily unlock is ~$400k potential selling pressure, or ~$11m per month
At launch, there was no premine, presales, or early access to the tokens: seems no VCs were involved https://t.co/053iirx1g9 — Unlocks Calendar (@UnlocksCalendar) January 9, 2023
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Furthermore, the vesting schedule is linear, with daily distribution halving every year on July 21. According to its tokenomics, the maximum supply of tokens is a hefty 50 billion.
The circulating supply is 7.5 billion out of a total supply of almost 39 billion, or 78% of the maximum.
Half of the first distribution of GALA tokens went to Founder’s Node Operators, while the other half was distributed to the Gala Games Conservatorship.
GALA currently has a market capitalization of $323 million, and the token is trading at $0.043 at the time of press. Despite recent gains, the gaming asset is down 95% from its November 2021 all-time high of $0.824.
Furthermore, the fully diluted valuation (FDV) is currently around $2.1 billion. With more and more tokens entering the markets, prices may struggle to gain momentum.
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In November, a large GALA token mint raised concerns about a potential hack. However, it was just a false alarm.
Blockchain Gaming Ecosystem Outlook
According to a Jan. 9 report by the IBT, GameFi 2.0 is about to take off. “A new generation of serious play-and-earn developers is moving in, determined to build truly great web3 games,” it noted.
The decentralization of games and the ability for gamers to the play-to-earn sector will be the next driver of momentum. Crypto markets may be in the doldrums at the moment, but the future is bright for blockchain gaming.
“Simply put, player-owned assets and thriving token economies represent the future of gaming.”
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