In-depth Analysis of XAI ($XAI): The Emerging Force in the Web3 Gaming Space

XAI is expected to completely change the gaming industry.

Author: Greythorn

Project Name: XAI

Project Type: Gaming

Token: $XAI (native token, ERC20, Arbitrum One)

Cryptocurrency Ranking: #193

Market Cap: $2.83 billion

Fully Diluted Valuation: $25 billion

Project Overview

Developed by Offchain Labs using Arbitrum technology, XAI is expected to completely change the gaming industry. It simplifies the virtual item trading for billions of gamers, eliminating the need for complex crypto wallets.

Key Features of XAI:

XAI integrates cryptocurrency wallets directly into the backend of the gaming experience, allowing players to manage wallets and easily trade items without the need for cumbersome wallet management.
Users can strengthen the network through operating nodes, earning incentives and governance rights to promote the development of a decentralized community ecosystem.
By combining innovative Gas subsidy contracts and Layer3 technology, XAI eliminates the common high Gas fees in blockchain games, making the experience more affordable and accessible.
XAI focuses on providing a pleasant user experience, handling the complexity of blockchain to ensure a seamless gaming experience. They also ensure the stability of their blockchain network through the implementation of AntiTrust technology and smart contract execution.

Sentry Nodes in the XAI Protocol

Sentry nodes play a crucial role in the XAI protocol, primarily responsible for identifying and reporting any incorrect blocks to the network. These nodes are flexible and can run on various devices, including personal computers and cloud platforms.

Rewards and Operations:

Earning rewards: Operators of Sentry nodes can earn rewards in esXAI tokens. The allocation of these rewards is determined by a probability algorithm and can be increased by staking esXAI tokens.
Setup process: To set up a Sentry node, operators need to download and install the software from the official XAI website.
Eligibility for rewards: While anyone can run Sentry nodes, purchasing a Sentry license key is required to qualify for rewards.
Compliance requirements: Receipt of rewards requires undergoing KYC checks. This process ensures that node operators are not located in the United States and are not subject to sanctions by the Office of Foreign Assets Control (OFAC).

Token Economics

Maximum supply: 25 billion

Total supply: 9.844 billion

Circulating supply: 2.77 billion (11%)

XAI is the primary token of the XAI blockchain, similar to tokens on popular Layer 1 and Layer 2 platforms. It is freely transferable. Additionally, XAI:

Is used to pay Gas fees on the Xai L3 blockchain.
Can be converted to esXAI, a non-transferable token form.

Benefits of esXAI:

The primary use of esXAI is for staking, providing users with various benefits:

Node operators earn rewards in esXAI and enjoy multiple benefits.
Benefits of staking esXAI:
Earnings account: Staking esXAI in the earnings account can increase the yield of esXAI.
Cultural account: Staking in this account provides access to special activities and NFTs related to games on the Xai blockchain.
Governance account: Enables DAO governance rights, including proposals for the DAO/foundation treasury.

esXAI can be instantly transferred between these three accounts without any penalties.

Unlocking period: 30-day unlocking period.

All Gas fees paid in the Xai ecosystem are paid in XAI tokens and destroyed.

Token Allocation:

Nodes, Community, and DAC: 50.1%

Investors: 22.41%

Applicable to early investors.
Unlock schedule: Begins 6 months after TGE, distributed over 24 months. Total duration: 30 months.

Team: 20%

Allocated to the core team and early contributors.
Unlock schedule: Begins 6 months after TGE, distributed over 36 months. Total duration: 42 months.

Ecosystem: 7.5%

Market maker allocation: 2% of total supply, immediately unlocked after TGE.
General ecosystem allocation: 5.5% of total supply, unlocking begins 6 months after TGE, distributed over 36 months. Total duration: 42 months.

Unlock Events:

Initial Stage: July 2024 to May 2025: Monthly unlocking details:

41.38 million XAI (1.66% of total supply).
Valuation: $42.98 million (14.93% of total market cap).

Subsequent Stage: After May 2025: Adjusted monthly unlocking details:

Starting from June 2025.
Amount: Unlock quantity increased to 82.79 million XAI (3.31% of total supply).
Valuation: $87 million (29.87% of total market cap).

Roadmap

Phase 2: January to March 2024

January:

Token generation event: XAI token trading begins.
Mainnet launch: Introduction of XAI exchange, esXAI staking, and Tarochi game.
XAI exchange: Conversion of esXAI tokens to freely transferable XAI.
Staking: esXAI staking with multiple benefits available.

February:

DEX partnership: Major DEX project collaborates with XAI to increase liquidity.
Infrastructure development: XAI becomes an industry leader in integrating wallets, entry/exit channels, and utility tools.

March:

Bridge partnership: Collaboration with Arb One to create a high-speed, high-liquidity solution.
Market integration: Integration of leading game items, NFTs, and collectibles market.

Phase 3: April to July 2024

April:

Final Form release: Debut of the first on-chain trading card game.
Game partner 1: Integration of a game title from a renowned game developer with XAI.

May:

Game partner 2: Launch of a flagship game on Xai by a leading Web3 game developer.

Ecosystem

Several exciting games are currently in development and planned for deployment on the XAI blockchain, to be released by the XAI Foundation:

Final Form: Developed by Ex Populus, scheduled for release in April 2024. This innovative game combines high-frequency card building with automated combat, incorporating Rogue-Lite mechanics. As players navigate through this world, they will encounter a series of challenging scenarios.
LAMOverse: LAMOverse features a chaotic and dynamic environment where everything, including the world itself, is destructible. LAMOverse promises not just a game but a fully immersive and evolving universe where adaptability and creativity are crucial. The game will be launched in the fourth quarter of 2024.
Tarochi: Taroch represents a new era of on-chain RPG games, where every action of the player—whether completing quests, overcoming challenges, or capturing monsters—is recorded in the blockchain history, creating a persistent digital legacy.
Web3 Warrieors: An exciting on-chain survival game where players embark on a challenging journey to battle elemental lords, endless undead enemies, and formidable bosses. As players progress, they can earn $BATTLE tokens and enhance their characters by purchasing NFTs from the in-game store, adding a unique element to their gaming experience.

In addition to these games, other projects launched or available on XAI include Camelot DEX, Rarible NFT marketplace, and Thirdweb, which is a toolkit for Web3 development, simplifying user onboarding, smart contract deployment, fiat payments, and application expansion on any EVM chain. Another notable project is LayerZero, an interoperability protocol.

Investors/Fundraising

Overview of Private Investment Rounds:

First Round (October 2021): Token price: $0.01 (105x ROI)

Second Round (May 2022): Token price: $0.032 (32.71x ROI)

Third Round (February 2023): Token price: $0.035 (29.92x ROI)

Involved Investors:

Animoca Brands
CMS Holdings LLC
Outlier Ventures
Fisher8 Capital
Asymmetric
Akatsuki

Bullish Factors Analysis

Since its launch in January 2024, XAI's testnet has shown significant growth momentum, with notable performance in the blockchain space. The network has successfully processed over 5 million transactions and built an active community of over 200,000 user wallets within its ecosystem.
The successful listing of the XAI token on multiple mainstream cryptocurrency exchanges, including Binance, KuCoin, CoinEx, and Crypto.com, has significantly increased its liquidity and market exposure.
As an emerging force in the Web3 gaming space, the project has demonstrated innovation and growth potential. Additionally, XAI's strategic partnership with Offchain Labs (the developer of Arbitrum) has significantly boosted its technological and market recognition. With direct technical support from Offchain Labs, XAI's prospects in the blockchain space are more promising.
Notably, there will be no token unlocking events for XAI until July 2024, which to some extent alleviates market pressure.

Bearish Factors Analysis

While XAI's blockchain games have not been released, there are expectations regarding the quality and attractiveness of its games. In the current market environment, relying solely on complex NFT markets and in-game liquidity mining mechanisms is not enough to ensure the project's long-term success. The core appeal of the game—its entertainment value and player engagement—becomes a key factor in determining the project's success.
Despite ample funding and a solid project structure, XAI faces the challenge of finding the perfect integration of game mechanics that meet player expectations with blockchain technology. This is not only a technical challenge but also an important issue in market positioning and user experience optimization.

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