A recent investigation by GA Meta shows a probable market manipulation by Immutable X for Gods Unchained, Illuvium, and Blocklords.
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According to a recent investigation by popular YouTuber GA Meta or The Grand Angle Meta, something fishy and questionable is going on with Immutable X blockchain games. Either Immutable X is artificially boosting its own games to create a fake perception of success or it is suffering from a hack. Nonetheless, the investigation highlights malpractice in IMX's popular blockchain games when it comes to artificial exchanges. The investigation sheds light that how Immutable X might hyperinflating its collection of NFTs or trading cards. Let’s check the stats put forward by GA Meta.
Immutable X Manipulating Trading Cards Values?
Blockchain technology firm Immutable X has unveiled its latest platform that allows collections of non-fungible tokens (NFTs) to circumvent gas charges and trading volume restrictions. The platform integrates Starknet technology, which enables faster, cheaper, and more scalable transactions on the Ethereum network. As part of its research on the platform, the company analyzed the trading volumes on Immutascan.io and found that the first five games on the list were metaverse games. This development aligns with the expectations of the GAM channel, a popular gaming and tech news outlet.
According to a recent report by the GA Meta team, Gods Unchained is the clear leader in terms of trading volume on the Immutascan marketplace. However, what sets it apart is the wide margin between the top two games and the rest of the field. Cross the Ages and Illuvium are one to ten behind, while Undead Blocks is a distant one to one hundred. The report suggests that the popularity of Gods Unchained and Blocklords must be exceptional to justify such a huge difference.
Further investigation of the Gods Unchained marketplace reveals an interesting trend. The majority of cards listed are worth only a few cents, which is not surprising given the game mechanics of traditional card games. As the seasons change, old cards become obsolete and lose their value. This dynamic results in newer cards taking their place, and it explains why many of the cards on the marketplace have little value.
The Gods Unchained NFT Trading Cards Question
The decreasing value of player-held cards poses a challenge for web3 play-to-earn advocates. This undermines the principles of digital collectibles and NFTs in web3 gaming, making it a problematic issue. Merely integrating NFTs and crypto into classic game mechanics will not suffice for metaverse games. These projects require a fair and sensible financial system to remain viable.
Unlike older game models, where inflation or asset proliferation is resolved by a one-size-fits-all update, blockchain technology adds value via community, ownership, and digital scarcity. NFTs provide various benefits that enhance the long-term value of game assets. This innovative approach is what inspired Vitalik Buterin to create the Ethereum network. Therefore, it is crucial to update and innovate gaming systems for any web3/NFT-based gaming experience to thrive.
Despite expectations of massive trades for ultra-rare cards on the Gods Unchained marketplace, recent data shows only 50 trades occurring in a week. Many cards are worth only a few cents, and the total value of the trades does not exceed $100. Even with thousands of hourly trades in ETH, the volume falls short of the predicted $3 million mark. The source of this money influx remains unclear.
Blocklords performance on Immutable X and Rising Questions
The Blocklords game also shows a similar trend. Despite generating approximately $2.5 million per week, there are minimal USDC or ETH transactions on the Blocklords "Banners" marketplace. However, when the GA team switches to buying with IMX, the native cryptocurrency of Immutable X, the situation changes dramatically.
The team discovers that IMX transactions are prohibitively expensive on each of these gaming platforms, with some cards priced at over $400. The same items in USDC cost only a few dollars. The logic behind the prices of digital items multiplying by x200 simply by switching to a different cryptocurrency is unjustifiable.
Multiple Address Transaction on Immutable X
The GAM team investigates the Blocklord card game on Immutascan and finds multiple addresses engaging in transactions with one another using IMX currency. These addresses are believed to be automated, as they execute up to 20 trades at regular intervals. The team discovers that these addresses regularly withdraw the crypto on IMX, which provides liquidity to buy other cards on the marketplace and continue the chain. This pattern is also noticed with Gods Unchained Cards on Immutascan, where most addresses buy and resell the same assets repeatedly.
The Wash Trading Question on Immutable X
The five game collections on IMX with the lowest trading fees are Blocklords, Gods Unchained, Immortal Game, Sparkadia, and Undead Blocks, with fees of up to 0.5%. To qualify for the $21,000 daily reward on Immutable X, players must earn a high percentage of points compared to other traders, requiring a daily trading volume of at least $700,000, generating $3,500 in fees at 0.5%. However, it is unlikely that this volume is solely from IMX, as traders may have created their own marketplace or negotiated fee reductions with some of the low-fee game creators. While the $20,000 reward is profitable, it doesn't account for project costs or fees paid by average users. In reality, the $20,000 in IMX rewards corresponds to a maximum of $450,000 for 4.5% fees, which is what an average user pays to sell an asset on Blocklord.
The Illuvium on Immutable X Question
On March 11th, the GAM team noticed that a large part of the unusual trading volumes had shifted to Illuvium since March 9th. Illuvium had recently launched a cosmetic NFT series called Illuvitars, with initial sales being low but increasing rapidly in the following days. However, the GA Meta team found that a significant portion of the traffic driving these sales might be artificial. Upon investigation, they discovered that around 90% of the activity on Illuvium might be artificial, with a pattern of addresses responding to each other and conducting thousands of transactions at standardized prices in a short amount of time, indicating a well-defined entity is driving these volumes.
A collection that previously had sale volumes under $50,000 saw a sudden surge in sales to over $1 million on Thursday, Friday, and Saturday, leading to suspicions of artificial traffic. Upon analysis of the block explorer, the GA Meta team found that 90% of the traffic was indeed artificial, with similar addresses answering each other in a pattern. Additionally, while the volumes of other games like Gods Unchained and Blocklords decreased, the volumes on Immutable X's Illuvium collection increased, suggesting the involvement of a well-defined entity driving the volumes.
In addition, it's worth noting that Illuvium is now the only game left on the list of projects that offer IMX rewards based on trade volumes. The continued use of these practices could lead to the perception that the marketplace volumes are being manipulated, making it crucial for the Immutable X platform to take action to prevent such practices.
You can check the detailed investigation here.
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