An Exploration into Gaming with Blockchain Integration: XAI ($XAI)

Greythorn Asset Management
7 min readFeb 1, 2024

Project Name: XAI

Project Type: GamingTicker:* $XAI (Native, ERC20, Arbitrum One)*

Cryptocurrency Rank: #193

Market Cap: $283MFully Diluted Valuation: $2.5B

PROJECT OVERVIEW

Developed by Offchain Labs using Arbitrum technology, Xai is poised to revolutionise the gaming industry. It simplifies the trading of in-game items 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, managing them on behalf of the player, allowing them to trade items easily without the hassle of managing wallets.
  • Users can strengthen the network by operating nodes, gaining incentives and governance rights, fostering a community-centric ecosystem.
  • XAI stands out for eliminating high gas fees common in blockchain gaming by leveraging an innovative gas subsidy contract in combination with the use of the Layer3 technology, making the experience more economical and accessible.
  • Focusing on user enjoyment, XAI handles blockchain complexities in the background, ensuring a seamless gaming experience. They also guarantee the stability of their blockchain network by implementing AntiTrust technology and smart contract execution.

SENTRY NODES IN THE XAI PROTOCOL

Sentry Nodes play a vital role in the XAI protocol, primarily responsible for identifying and reporting any incorrect blocks to the network. These nodes are designed for flexibility, allowing them to be operated on a variety of devices, including personal computers and cloud platforms.

Rewards and Operation:

  • Earning Rewards: Operators of Sentry Nodes can earn rewards in the form of esXai tokens. The allocation of these rewards is determined by a probabilistic algorithm, which can be enhanced by staking esXai tokens.
  • Setup Process: To set up a Sentry Node, operators need to download and install software from XAI’s official website.
  • Eligibility for Rewards: Although anyone can run a Sentry Node, earning rewards requires purchasing a Sentry License Key.
  • Compliance Requirements: Reward collection is subject to a KYC check. This process ensures that node operators are not located in the USA and are not under OFAC (Office of Foreign Assets Control) sanctions.

TOKENOMICS

Max supply: 2.5B

Total supply: 984.4M

Circulation supply: 277M (11%)

XAI serves as the main token for the XAI blockchain, similar to tokens on popular Layer 1 and Layer 2 platforms. It is fully transferable. Also:

  • Is used to pay for gas fees on the Xai L3 blockchain.
  • XAI can be converted into esXAI, a non-transferable form of the token.

esXAI benefits:

esXAI’s primary purpose is staking, which offers a variety of benefits to users:

  • Node operators receive rewards in esXAI and enjoy several benefits.
  • Benefits of Staked esXAI:
  • Yield Account: Staking esXAI in a yield account increases the yield of esXAI.
  • Culture Account: Staking in this account grants access to special events 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 moved between these three accounts instantly without any penalty.

Unstaking Period: 30-day unlock period.

All of the gas fees paid in the Xai ecosystem are paid in XAI and burnt.

Token allocation:

Nodes, Community & DAC: 50.1%

Investors: 22.41%

  • For early-round investors.
  • Unlocking Schedule: Begins 6 months after TGE, spread over 24 months. Total duration: 30 months.

Team: 20%

  • Allocated to the core team and early contributors.
  • Unlocking Schedule: Starts 6 months after TGE, unfolding over 36 months. Total duration: 42 months.

Ecosystem: 7.5%

  • Market Makers Allocation: 2% of the total, unlocked immediately at TGE.
  • General Ecosystem Allocation: 5.5% of the total, starts unlocking 6 months after TGE and continues over 36 months. Total duration: 42 months.

Unlocking Events:

Initial Phase: July 2024 to May 2025: Monthly Unlock Details:

  • 41.38 million XAI (1.66% of the TS).
  • Estimated Value: $42.98M (14.93% of the MC).

Subsequent Phase: Post-May 2025: Adjusted Monthly Unlock Details:

  • Starting from June 2025.
  • Amount: The unlock amount doubles to 82.79 million XAI (3.31% of the TS).
  • Estimated Value: $87.00M (29.87% of the MC)

ROADMAP

Stage 2: January — March 2024

January:

  • Token Generation Event: Commencement of XAI tokens trading.
  • Mainnet Launch: Introduction of XAI redemptions, esXAI staking, and Tarochi game.
  • XAI Redemptions: Exchange of esXAI tokens for fully transferable XAI.
  • Staking: Availability of esXAI staking for various benefits.

February:

  • DEX Partnership: A major DEX project collaborates with XAI, boosting liquidity.
  • Infrastructure Development: An industry leader to integrate wallets, on/off-ramps, and utilities in XAI.

March:

  • Bridge Partnership: Partnership with Arb One to create a high-speed, high-liquidity solution.
  • Marketplace Integration: Incorporation of a leading marketplace for in-game items, NFTs, and collectibles.

Stage 3: April — July 2024

April:

  • Final Form Launch: Debut of the first on-chain trading card game in the network.
  • Game Partner 1: Integration of a popular game developer’s portfolio with XAI.

May:

  • Game Partner 2: Launch of a flagship game by a leading web3 game developer on Xai.

ECOSYSTEM

Several exciting games are currently in development for deployment on XAI blockchain and to be published by XAI Foundation:

  • Final Form: Developed by Ex Populus and set for release in April 2024. This innovative game blends high-frequency deck building with auto-battle features, all wrapped in Rogue-Lite mechanics. As players dive into this world, they will find themselves navigating through a series of challenging scenarios.

Website: https://expopulus.com/games/final-form

  • LAMOverse: LAMOverse is defined by its chaotic and dynamic environment, where everything — including the world itself — is destructible. LAMOverse promises to deliver not just a game, but a wholly immersive and ever-evolving universe where adaptability and creativity are paramount. The game launches in 4Q2024

Website: https://expopulus.com/games/lamoverse

  • Tarochi: Taroch represents a new era in on-chain RPG gaming, where players’ every action — be it completing a quest, overcoming a challenge, or capturing a monster — is etched into blockchain history, creating an enduring digital legacy.

Website: https://twitter.com/TarochiGame

  • Web3 Warrieors: An exhilarating on-chain survival game where players face a challenging journey battling elemental lords, waves of undead foes, and fearsome bosses. As gamers advance, they can earn $BATTLE tokens and enhance their characters through NFT purchases in the in-game shop, adding a unique aspect to their gaming experience.

Website: https://web3warriors.thirdweb.com/

Besides these games, other projects are being launched or are already available on XAI. These include Camelot DEX, Rarible NFT marketplace, and Thirdweb, a toolkit for web3 development that simplifies user onboarding, smart contract deployment, fiat payments, and app scaling on any EVM chain. Another notable project is LayerZero, an interoperability protocol.

INVESTORS / FUNDRAISING

Private Investment Rounds Overview:

  • 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 (29.92 ROI)

Investors Involved:

  • Animoca Brands
  • CMS Holdings LLC
  • Outlier Ventures
  • Fisher8 Capital
  • Asymmetric
  • Akatsuki
  • Citizen Capital

BULLISH FUNDAMENTAL FACTORS

  • The XAI Testnet has seen rapid growth since its launch in January 2024. It has successfully executed over 5 million transactions in a robust community with more than 200,000 wallets.
  • XAI token has been listed on several exchanges, including Binance, KuCoin, CoinEx, and Crypto.com.
  • The project is a fresh and innovative addition to the web3 gaming sector.
  • XAI’s association with Offchain Labs, the creators of Arbitrum, adds to its credibility and potential. It also benefits from direct technical support courtesy of Offchain Labs.
  • There will be no token unlocks until July.

BEARISH FUNDAMENTAL FACTORS

  • XAI’s blockchain games are yet to be released, and there’s always uncertainty about whether they will be enjoyable to play. It’s becoming clear that having complex NFT marketplaces and liquidity mining in games is not enough for long-term success. The games need to be genuinely fun to keep players engaged.
  • Even with substantial funding and a solid structure, XAI will be challenged in finding the perfect mix of game mechanics and blockchain features that players really want.

Important notice and disclaimer

This presentation has been prepared by Greythorn Asset Management Pty Ltd (ABN 96 621 995 659) (Greythorn). The information in this presentation should be regarded as general information only rather than investment advice and financial advice. It is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. In preparing this document Greythorn did not take into account the investment objectives, financial circumstance or particular needs of any recipient who receives or reads it. Before making any investment decisions, recipients of this presentation should consider their own personal circumstances and seek professional advice from their accountant, lawyer or other professional adviser. This presentation contains statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Greythorn is not obliged to update the information. Those assumptions may or may not prove to be correct. None of Greythorn, its officers, employees, agents, advisers or any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of any forward looking statements or any of the assumptions upon which they are based. Greythorn and its officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. None of Greythorn and its officers, employees, agents and advisers accept, to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. This presentation is the property of Greythorn. By receiving this presentation, the recipient agrees to keep its content confidential and agrees not to copy, supply, disseminate or disclose any information in relation to its content without written consent.

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Greythorn Asset Management

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