What’s up everyone? How are you feeling about the markets today? I’m feeling great, and well positioned for the next bull market!!
Today, I want us to take a look at $GALA. GALA is a games publishing platform in the play-to-earn niche – this means gamers play and earn rewards in the form of tokens and nfts that they can sell in the market to get actual money. GALA makes the games that enable this business model to happen.
I’m seeing a lot of YouTubers and influencers claiming that GALA could easily do a 50x in the next bull market. So let’s see, where is $GALA right now?
GALA is trading at $0.019 per token today. A 50x means we are expecting it to go up to at least $0.95 per token. That would give it a market cap of nearly $24bn with its current supply of 25.4BN circulating tokens.
This price prediction by analysts is getting everyone excited. I want to dive deep into it, and actually see what the possibilities look like and if GALA can actually 50x in the bull market.
Let’s see why GALA is in the best position today as compared to the last bull market!
In the last bull market, GALA’s price went up to an all-time high of $0.83 per token. But if you are just looking at the last all time high and basing your analysis on that, you could be making a big mistake.
You see, in the last bull market, GALA achieved a market cap of $4.9 billion at an all-time high price of $0.83. This is why looking at the tokenomics is very important.
At that all time high market cap, GALA had 5.9 billion tokens circulating in the market. How did that happen?
GALA’s maximum supply – that is, total number of tokens that will ever exist in the lifetime of the cryptocurrency – is 50 billion tokens.
However, not all the 50 billion tokens were circulating in the market because GALA is built to be inflationary. This means every day, there are new tokens that get minted and get released into the market. How does that happen?
GALA sells these things that are called GALA Nodes. What the hell is a Game Node? You see, running a blockchain-based gaming network takes a lot of computing resources. GALA needed the help of its community to securely provide the network and resources that GALA games needed to be sustainable, at least in the medium term (say 10-20 years). So they built this nodes, that enable the GALA community to take on part of the responsibility to power GALA games.
You basically buy a node; it goes for $40k today. In the last bull market these things were going for $20-$30k. They are getting more expensive as fewer of them are available to buy today than back then. GALA only made 50,000 founder nodes. Once they are all sold out, you can’t buy any more – so far over 42k nodes have been sold. With such finite supply, the price of one node increases by $100 for every 100 nodes sold. I’ll make another video to explain how the GALA nodes work in more detail soon. So stay tuned.
Once you buy the node, use GALA’s instructions to set your node up and keep it running in perpetuity. You don’t have to do any more work than just keep it on. In return, you get rewarded with GALA tokens. Today, you get about 300 GALA tokens every day. In the bull market, one node was rewarding its owner with 600-800 GALA tokens per day. By the last bull market, GALA had sold about 33k nodes. That means every day, it was rewarding node owners with about 19.8 million tokens daily. And most of the node owners were dumping those GALA tokens in the market to make profits and recoup the money spent in buying the node. In a year, that is inflation of the tokens by about 7billion tokens hence massively increasing the circulating supply.
Understanding this background is important to understanding how the tokenomics of GALA work and comparing the last bull market to the next one.
So let’s get back to comparing the tokenomics then and now.
The circulating supply in 2021 of 5.9 billion tokens represented about 11.8% of maximum supply.
In 2023 today, the circulating supply is 25.4 billion tokens representing 50.8% of maximum supply.
If 25.4 billion tokens are circulating, what about the rest of the tokens?
After the Gala node owners massively dumped their token rewards in the market, there was a lot of fear in the community that GALA as a company could dump the rest of the tokens and cause a massive fall in price of the token. So those tokens just being out there in the wind and not circulating was proving to be a big risk.
To alley the fears, GALA took the decision to burn tokens. Isn’t this what every holder of any token wants to hear??
Well, GALA burned 2 billion tokens that were already earmarked for a burn in the “2023 Vision Paper”. In addition, they burned another 3.96 billion tokens the total revenue in GALA that the company had ever received. As a last thank you to the community, they burned 15 billion tokens to completely destroy the fears of a dump and exit possibility. That means 20.96 billion tokens were decimated and totally destroyed. They will never be back in the market.
With the 20.96 billion burned and 25.4 billion tokens circulating supply, we are left with 3.64 billion tokens to account for.
The team has an allocated supply of 2.02 billion tokens. The remaining 1.62 billion tokens have been left alone as distribution rewards for GALA node owners up-to 2030. Today every GALA node owner gets between 80-300 tokens rewards per day.
So the 25.4 billion tokens in circulating supply actually represents a realized ratio of 87.4% of total tokens that will ever exist in the lifetime of GALA – thanks to the burn.
So while the circulating supply in 2021 was 5.9 billion tokens representing 11.8%, in 2023 the circulating supply represents 87.4%. Is this good or bad?
This is good. Because unlike 2021, in the next bull market, there aren’t that many tokens available that node owners can dump in the market. In addition, they get less rewards per node now that back then.
Lastly, the GALA team only owns 6.8% of the possible 29.04 billion tokens total supply. Even if they were to sell all their tokens, it would cause a very small impact in the market today.
The tokenomics today in 2023 is good for GALA and the community than the tokenomics in 2021. The risk are far much less because 87.4% of the tokens are held by investors, exchanges and the community. It is a distributed ownership making GALA less risky in the next bull market than it was in the last one.
GALA is on the run to be the most mentioned cryptocurrency in the gaming niche today. According to their website, GALA currently has 9 games in development, 1 game in beta, 1 game in early access launch and 7 games live. The live games actually have players who are playing and earning in the actual play-to-earn fashion.
That makes it 18 total games that GALA is working on. It’s the biggest network of games in the crypto market. In the last bull market, GALA had 1.3 million active gamers. But they only had 2 live games back then. Today they have 7 live games and are working on more.
In addition, GALA games is making mobile games now, bringing the gaming play-to-earn ever so close to the masses – meaning people can play games on their phones and earn. To position them properly for that, in January 2023, GALA acquired a huge mobile gaming studio called Ember Entertainment that is responsible for The Walking Dead:Empires game and 14 other games. The Walking Dead: Empires is actually one of the games that GALA has in development for the blockchain play-to-earn model.
With that acquisition, GALA games now owns all the 15 games that were owned by Ember Entertainment. So that brings the total number of games that GALA is working on to 32. When announcing the acquisition, the company suggested that what would have taken 15 years to develop and successfully launch a game, will now take 9-12 months. That’s a massive leap in delivery times.
So the GALA platform today as compared to 2021 is built better with more games and a more sustainable infrastructure to release more games as quickly as possible. The more games they push, the higher the chances of that a few games will become major hits, and with that, the higher the number of active gamers the GALA platform will have.
GALA’s community is actually super active online. They have 463k followers on X. Another 203k members on their main Discord channel. 14k members on Telegram, and over 50k followers on Facebook. They have another couple of thousands of fans on Reddit. Not many crypto projects can boast this number of fans in the community.
In terms of holders, according to Etherscan, they have 209k holders. A more accurate number is actually 250k holders according to Ethplorer. That’s not small. It’s enough to be a catalyst of pushing momentum in the next bull market.
Think about this, in the current market that’s still bearish, GALA has close $100million in 24 hours trading volumes. That says a lot. In a bull market this could be in billions of dollars in GALA traded per day.
With that said, let us now look at why the GALA token is not in a good position today.
1. The Lawsuit
GALA’s co-founders have sued each other and are currently in court.
GALA’s CEO alleges that the company director stole $130 million in GALA tokens back in 2021 and misappropriated the funds through his company that owns 45% of GALA as a business.
On the other hand, GALA’s director says the CEO went rogue, and made decisions without his input which caused the CEO to misuse at least $600 million in GALA company funds.
This case caused a lot of FUD – in case you never heard of this word before, FUD is a short form of ‘fear, uncertainity and doubt’. And we know when holders get FUD, they dump the token.
GALA came out to promise that the lawsuit would not affect GALA’s ambitions, objectives and operations. They said that the co-founders were allowed to seek help in courts, on a personal level, and GALA would not be involved in this lawsuit.
We have also seen GALA’s president appear in the media more often – not to speak about the lawsuit, but to discuss other developments in GALA and bring some confidence in the community. Maybe it worked, actually.
You see, the news about the lawsuit went out on Sept 3rd, 2023. GALA was trading at $0.018. By Sept 4th, when the news was all over the crypto space, the price of GALA was down 11% trading at $0.016 and eventually falling to $0.013 in the days that followed. However, the drop was shortlived, because less than 3 months later, GALA is now trading at $0.019 the lawsuit is actually discussed less on social media and anyweher else.
So while the lawsuit is a big inconvenience to GALA and the whole community, it is not making a very big negative impact. Even so, the risk is there, that while the lawsuit is still ongoing, it is causing some FUD. And also, because no one can predict what the court decision will be, no one knows how this founders will react when the decision is made and how their reaction could affect GALA’s price and the company’s day to day operations.
2. Big Wallets
As with any token, the big wallets are always a risk. I consider big wallets to be the wallets that own 0.01% or more of the supply. According to Etherscan, this is about 2.7million gala tokens and above. There are 393 holders of these wallets.
The risk is that because the price of GALA has been suppressed for so long, these big holders could possibly be waiting for a good price point to dump their tokens and exit in profits or salvage their capital.
If more of these holders sell in the next bull market, then GALA could possibly see a depressed price rise. This would just not favor a 50x price increase.
We have looked at the good and the bad of the GALA token today. In the end the positives are more, and the negatives could happen to any token in reality. So where do I personally think GALA could go in the next bull market?
I do think the some big holders are waiting for a perfect exit because they have been holding the token for so long, if they are currently accumulating or dollar cost averaging, then their average buying price is close to the current trading price. It means they might sell early at the nearest improved price that gives them a profit but we cannot tell what that price would be. However, with an improved market, any positive price action will get more eyes and more people waiting to jump in on the action. That could mean that the dumping by big holders could get canceled because more people will be buying.
In addition, the circulating supply of 25.4 billion tokens is 4 times (4x) more than in the last bull market. To achieve the last all time high market cap of $4.9 billion, the GALA token would have to rise 10x from its current price of $0.019 and $503 million market cap. I think GALA will do better than the last bull market. And I’m setting my sights on a 12x-15x price rise (about $0.22-$0.28 per token) because I just don’t see GALA at close to $1 with the current circulating supply. There are way too many tokens in the market at the moment. And that is why I think a 50x is ridiculous and not realistic.
What do you think? Are you in the 50x band or in the 9x-15x band? Let’s hear it in the comments.
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I’m done here, see you in the next one where we take a deep dive into Fantom (FTM) and look at what’s in store for FTM holders in the coming bull market. Cheers!