The LVL token is the currency in the upcoming next-gen Hive game PsyberX.
I'm just going to assume because you clicked on this that you know what that means.
There are a million reasons to be bullish LVL.
First, this is a fully funded game being built by some highly motivated devs that takes blockchain gaming into the next level. Gone are cards and static graphics to be replaced by modern interactive environments with a cyberpunk aesthetic hosting real-time first and third person shooter battle royales with up to 100 players at a time killing each other off for money with weapons and armor they really own.
On top of that, the team promises to deliver land and guilds and commerce and sponsorships and actively laughs at Splinterlands and their 400k active accounts.
LVL is the token that will run all of this and there are only 500 million that will ever be minted. On top of all of this, the team plans on making multiple other games that will also run on that same supply of LVL.
A few weeks ago, leading up to a reveal of actual game footage, LVL was soaring. After spending most of its short existence under .001 cent, it was suddenly threatening to hit .01 cent. Article after article were coming out about why you should be buying the token as it hit over .007 cents and pushed higher.
I sold 10% of my LVL at the time which gave me back my entire cost basis. Multiple people at the time told me I would regret selling even that 10% because the reveal was coming and it would cause so much more FOMO.
Today, just a few weeks after the big reveal, a crap ton of LVL changed hands at just .0015. It's dropped 80%.
About a week ago when LVL was still at .004, the devs set up a liquidity pool on Tribaldex. They also released 10k Founders Starter Kits with small plots of land in them and a few other perks that would never be released again. After close to 1000 of those sold they announced the only 50 plots of larger commercial land the game would ever see were going on sale and could be bought for for 500k LVL which was a discount to other 2500 HBD option at current LVL prices.
With that release they expected to get people buying lots of LVL which could send prices up to the point buying with LVL would no longer be a discount. To protect against this the team decided to put 20 million LVL sell wall up at .0045 and .005 so people could buy the LVL they needed at a low enough price to keep land prices below $2500. (Remember this sell wall because it comes back up later in this post)
In the same post they announced that they told everyone that LVL was going to go to .01 and they were ready to celebrate it. How exciting!!
And then it crashed. Wave after wave of huge sells. I'm not sure if any of their sell wall got touched because price didn't really get back to .0045 as far as I saw.
So why did it happen?
Well, I don't know anyones exact reason for selling but I've been in markets long enough to be able to take a few good guesses. Here's ten of them!
Before I start this though, I just want to say I'm pretty heavily invested in the game and this is not meant to be a teardown of the team. I'm just showing why I believe the token is down 80% from its highs a few weeks ago.
Let's go!
First, there was some funky trading going on when the price was launching higher pre footage reveal. I was watching it. Every time a small sell order came in and undercut the asking price it got quickly sniped by the PsyberX account before any other sellers could pile on and push the price lower. They kept the sell side of the market clear of real sellers so any real buyers had no choice but to buy the market higher if they wanted in.
As far as the "real buyers" there were really also just a few big buyers and many of them are associated very closely with PsyberX. This all stopped right after the footage reveal. It was pretty clear that the team was managing the market to make it look super strong to get people more excited about the reveal.
Personally, I have nothing against this behavior. They used their own money to buy the market and its on the blockchain so anyone could have done a little research and seen it but I've been in markets long enough to know, managed markets tend to backfire and this one did just that.
Second, there was an AMA where basically every question asked about what the game would have was met with an answer of "Sure! We'll have that too! Of course. No problem. We will do everything. Whatever you want will absolutely be there. May take some time but if you want it consider it built." For many people this sounds great. Why would you not buy something when you're being told its going have everything you want?
Well, because people who invest in companies and run businesses realize there are limitations to what can be done in real life and this sounds a lot like overpromising which usually comes paired with underdelivering. Remember they are promising a lot for a game that was fully-funded with just $40,000.
On top of that, no one has ever been successful trying to be all things to all people. Lines must be drawn. This is a lesson all of Web3 will have to come to terms with soon enough.
Third, land. Now I just wrote a post telling you that I picked up three small plots of land and even spent 500k LVL on a commercial plot. Clearly I'm on board with land. However, land is something everyone has started promising and no one has delivered on yet. It seems like the mud projects get stuck in. I'm not a developer so I don't know the ins and outs but so far everyone who's come out offering land has been delayed forever. PsyberX hasn't delivered a game yet and they already have full plans for the metaverse coming a few months later. To many people, this is a bridge too far. Or we could say a bridge to nowhere because they don't believe land will be on the other side.
Fourth, the sell wall. The team told everyone it was there. I for one took that as a pretty damn good bet that price wasn't going to run off without me. With a big gap between the bid and the ask, I put a chunk of my LVL up for sale expecting to be able to buy it back cheaper. I was undercut in minutes with everyone else that has the same idea. Between this, the team telling everyone .01 cent was coming, and the first point up there of managing the market pre reveal, it should be becoming clear that they have a problem with trying to manage the market and it keeps backfiring on them.
Fifth, Panic! More people own LVL now who bought at all different prices. It used to just be people who bought it low and were in profit but with it now being 80% down, that means many people in it bought higher than it is right now and are seeing red. No one knows what's happening with crypto so its all selling off anyway and that makes this extra scary. Meanwhile many of the people who've been in it since the beginning are more experienced and are front-running the panic selling.
Sixth, funding the liquidity pool. You can't fund a liquidity pool with LVL alone. You also need an equal dollar value of Hive. How does one get Hive? They sell half their LVL.
Seventh, the existence of the liquidity pool. We already had someone sell over a million tokens for less than 1 hive because they didn't understand liquidity pools. People are going on to them thinking they are getting one price but selling way more than the pool has liquidity for at that price and sending price plummeting. It's happening over and over again. Panic mixed with a lack of understanding of the tools they are using is leading to chaos. Seriously, if you don't understand liquidity pools, don't use them. Don't buy or sell using them and don't add liquidity.
Eighth, a new shiny office. After making so much of this game without it and with so much of the world giving up on office space, the team has decided that they need to pay for office space. While I don't know their motivations or how much or little value this brings to the project, which already feels like it has a small budget for everything they are promising, I can say it feels wasteful and a little like trying to appear legit.
Saying hey, we just got a bunch of money from you all so we're going to pay for office space just feels a little messed up when half the world is still working from home and most developer teams aren't local to each other anymore anyway. They've said tons of times that many people are working on this. How much does office space cost for so many people? Or are most of those people working remotely? In which case, why the office space?
Ninth, price just moved too far, too fast. A 50% drawdown was bound to happen. Of course, most amateur investors (I include myself here) never expect it. We are very good at convincing ourselves that what's happening right now will always be happening. This is especially true when things are going up that we bought because we thought they'd go up. We are confirmed and it's exciting. We rationalize any movement no matter how extreme it is and then we expect it to continue indefinitely.
When I sold that measly 10% of my stake, it felt awful. It felt like price was going to run without me and I was going to miss out on hundreds of thousands of dollars when this .0075 cent coin got to $3 or $4. But my rational brain has learned that the worse it feels to sell the more probable it is that it's the right move. I should have sold way more than 10% because this felt absolutely awful with all the hype out there but I just couldn't get myself to do it.
Tenth I'll include just to round it off to ten and because I know someone will trip over their own feet running to the comments to break this secret news to me if I don't say it...
All of crypto is down!
Of course it was down already but it's down a little more now. Tokens like OneUp that have held up very well for months recently dropped 40%. That's not quite the 80% that LVL dropped though, is it? And also those other coins don't have amazing news coming out every other day.
And there you have it. My ten reasons why LVL is down 80% from its highs.
Did you sell a bunch of LVL? If so, why?
Posted Using LeoFinance Beta
