WEMIX Issuer Buys $10M Worth of Tokens After Delisting by Exchanges in S. Korea
On early Friday, the WEMIX gaming token rose by 41%, following the news that the token’s issuer Wemade will buy back $10 million worth of WEMIX. Thus with $10 million worth of tokens removed from circulation, Wemade hopes to restore the token’s value. The move follows a court order in South Korea that upheld the decision made by the top 4 crypto exchanges to delist the token, sending its value down to -97% year-to-date.
What is the WEMIX (WEMIX) Token?
In December 2019, South Korean blockchain gaming developer Wemade Tree, a subsidiary of Wemade Co., Ltd., announced the launch of its gaming platform WEMIX Network. In October 2022, WEMIX 3.0 mainnet launched as a fast, Ethereum-compatible SPoA (Stake-based Proof of Authority) blockchain network.
The gaming-focused network uses WEMIX (WEMIX) tokens to pay for all costs related to blockchain gaming: NFT trading and minting, DeFi transactions, and staking rewards. With the launch of WEMIX 3.0, the platform even got its own stablecoin WEMIX$, minted at 11 million and redeemable through Circle’s USDC.
With its own wallet, stablecoins, DeFi corner (WEMIX.FI), blockchain explorer, and currency, WEMIX was supposed to become Korea’s Web3 mega-platform. Wemade already served 500 million users with its 40 video games, such as ChuanQi and MIR4. Earlier in November, even Microsoft invested in Wemade’s $46 million funding round.
Devastating WEMIX Delisting
As reported in March, South Korea has one of the strictest legal frameworks on digital assets, implementing a travel rule that affects all exchanges. On October 27, South Korea’s Digital Asset eXchange Association (DAXA) labeled the WEMIX token as risky because of incongruity in its circulating supply.
Specifically, Upbit reported WEMIX to have extra 72 million tokens over the provided estimate of 245 million. Wemade recognized the discrepancy, explaining it as a mistake when they excluded WEMIX tokens that are not in circulation, such as loans’ collaterals and partnership incentives.
“As more and more partners believe & participate in the future of WEMIX and the development of the ecosystem, a certain amount of WEMIX was inevitably supplied at each partnership/contract signing depending on the purpose or form of the cooperative model.”
However, on November 24, DAXA’s four out of five exchanges (Upbit, Bithumb, Coinone, Korbit) announced that WEMIX tokens will be delisted. DAXA’s four exchanges account for over 95% of South Korea’s trading volume. Predictably, this collapsed both Wemade stock (-39%) and the WEMIX token (-81%).
To make things worse, Seoul Central District Court refused Wemade’s appeal this Wednesday to block the four exchanges from delisting WEMIX. On Thursday, at 3 PM (Korea timezone) Upbit, Bithumb, Coinone and Korbit finally delisted WEMIX due to coin circulation misreporting.
On the same day, even global crypto exchange OKX joined the WEMIX delisting spree. Year-to-date, WEMIX has lost 97% of its value, at $0.2826, while Wemade stock plunged by 82%.
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Friday’s Buyback & Burn Program
Due to massive blows to WEMIX’s trading volume after delistings, Wemade’s Foundation enacted deflationary tokenomics. As the first step, $10 million worth of WEMIX will be bought and burned, permanently removing the tokens from circulation by sending them to an irretrievable wallet address.
This will last for 90 days, up to March 8, 2023. To fortify the new deflationary tokenomics, the Foundation will also burn 25% of all WEMIX 3.0 revenues every quarter. In addition to gas fee burns, WEMIX total supply will be significantly reduced, with results disclosed every quarter.
Wemade considers delistings a temporary setback, stating they “will overcome this temporary setback to once again prove its true value”. Although the initial burn news briefly boosted the token on Friday, over the last 5 days, WEMIX is down by 66%.
Wemade has been in the video gaming business for over 22 years, garnering brand loyalty from gamers worldwide. WEMIX circulation misreporting appears to come from Wemade’s ambitious goal to expand from gaming to DeFi, as a one-stop blockchain shop.
However, given Wemade’s long-time standing as South Korea’s major video game developer, one should expect the company to return to its play-to-earn feet.
Do you think Wemade will recover from the WEMIX token miscounting fiasco? Let us know in the comments below.
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