CoinClear

Xai

3.4/10

Arbitrum-backed gaming L3 with strong tech backing but a game catalog that is mostly hype and node sales

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Xai is a Layer 3 blockchain purpose-built for gaming, constructed using Arbitrum Orbit technology and settling to Arbitrum One (which in turn settles to Ethereum). Backed by Offchain Labs, the team behind Arbitrum itself, Xai launched in early 2024 with the promise of enabling mainstream gaming experiences on blockchain — with particular emphasis on removing web3 friction (no wallet popups, gasless transactions, account abstraction) so that traditional gamers never need to know they are using a blockchain.

The project gained significant early attention through its Sentry Node Sale, which raised substantial capital by selling node licenses that allow holders to participate in network validation and earn XAI rewards. This node-sale model — which has become common across crypto infrastructure projects — generated meaningful revenue but also created a dynamic where much of the community is financially invested in the chain's success through node purchases rather than through gameplay engagement.

Xai's primary game partnership is with Ex Populus, whose titles (LAMOverse, Final Form) are among the first games targeting the chain. However, the gaming catalog is nascent, and Xai faces the same chicken-and-egg problem as every gaming chain: attracting games requires users, and attracting users requires games. The Arbitrum backing provides credibility and technical resources, but credibility alone does not build a gaming ecosystem.

Gameplay

Game Quality

The games currently available on Xai are early-stage and limited in scope. LAMOverse, the most prominent title, is a casual party game that is functional but not compelling by traditional gaming standards. Final Form is an auto-battler in development. Other ecosystem games are in various pre-launch stages. None of the available games would attract attention without the crypto/earning component. The game quality is comparable to mobile free-to-play games from a decade ago — functional but unremarkable.

Player Retention

Player retention metrics for Xai games are difficult to assess given the early stage. On-chain activity on the Xai chain includes a mix of gaming transactions, DeFi activity, and node-related operations. Gaming-specific DAU appears to be in the low thousands at best. The node holder community engages with the chain regularly (for reward claims), but this is infrastructure engagement, not gaming engagement. True gameplay retention is minimal.

Content Depth

The content available on Xai is thin. A handful of games in various development stages, mostly casual or arena-battler genres. There is no deep RPG, no compelling strategy game, no social experience that could sustain months of player engagement. The content roadmap includes more titles, but the current library would not fill a modest mobile app store page. Content depth is aspirational.

Technology

Blockchain Integration

Xai's L3 architecture settles to Arbitrum One, inheriting Ethereum's security with additional scalability. The Orbit framework allows custom gas tokens, gasless transactions for users (with the chain subsidizing gas), and chain-level account abstraction. These features are genuinely useful for gaming — removing wallet popups and gas fees addresses two of the biggest friction points in blockchain gaming. The technical foundation is sound.

Infrastructure

The Arbitrum Orbit technology provides a proven base layer for the L3. Xai adds gaming-specific features including subsidized gas, account abstraction, and APIs for game developers. The Sentry Node network adds a decentralized validation layer (nodes verify state transitions). The developer toolkit includes SDKs for Unity and Unreal Engine integration. Infrastructure quality benefits from Offchain Labs' engineering expertise.

User Experience

The promise of "invisible blockchain" gaming is Xai's core UX thesis. Account abstraction and gasless transactions aim to make the blockchain layer imperceptible to players. In practice, the implementation is advancing but not yet seamless — wallet creation, asset management, and bridging still involve crypto-native concepts. The UX is better than most gaming chains but has not yet achieved the frictionless experience of traditional gaming platforms.

Economy

In-Game Economy

Individual game economies on Xai are nascent and simple. LAMOverse has basic in-game currencies and NFT items. The broader Xai economy includes DeFi protocols, NFT marketplaces, and token staking — more general-purpose chain activity than gaming-specific economics. The envisioned cross-game economy with shared assets and interoperable items remains theoretical.

Sustainability

The economic model depends on growing gaming activity to generate transaction fees and ecosystem value. Currently, the primary economic driver is node rewards and DeFi activity rather than gaming. The node sale generated significant upfront capital but created an ongoing obligation to reward node holders — an expense that must be funded by chain activity or token emissions. If gaming adoption does not grow substantially, the economic model faces sustainability challenges.

NFT Market

NFT activity on Xai includes game assets, Sentry Node keys, and various collections. Trading volume is modest and heavily influenced by node-related activity. Gaming NFT markets are limited by the small number of games with meaningful NFT integration. The marketplace infrastructure exists but operates with low liquidity and limited catalog depth.

Adoption

Player Count

Xai chain activity includes approximately 10,000-50,000 daily active addresses, but this figure includes DeFi users, node operators, and airdrop farmers in addition to actual gamers. Gaming-specific DAU is estimated in the low thousands. The node holder community (approximately 50,000+ Sentry Keys sold) provides a base of financially committed participants, but node holders are not necessarily game players.

Revenue

Revenue comes from Sentry Node key sales (a significant one-time source), chain transaction fees, and ecosystem partnerships. The node sale generated tens of millions in revenue. Ongoing operational revenue from gaming activity is minimal. The project's financial position benefits from Offchain Labs backing and the node sale treasury, but sustainable gaming revenue has not materialized.

Community

The Xai community on Discord and Twitter is active, with engagement driven heavily by node holders, airdrop expectations, and token price discussion. Gaming-focused community activity is a small fraction of overall engagement. The community is more infrastructure/investment-focused than gaming-focused — reflecting the project's current state as a chain searching for its gaming identity rather than a gaming ecosystem with organic player community.

Tokenomics

Token Overview

XAI is the native gas and governance token with a total supply of 2.5 billion tokens. esXAI (escrowed XAI) serves as the staking and reward token for Sentry Node operators. Distribution includes node rewards, ecosystem development, team, investors, and community allocations. The dual-token model (XAI/esXAI) is designed to incentivize long-term node operation through vesting mechanics on esXAI rewards.

Play-to-Earn Model

Xai does not have a unified play-to-earn model. Individual games may implement their own reward mechanisms. The primary "earning" on Xai currently comes from Sentry Node operation (earning esXAI) rather than gameplay. This is a more infrastructure-oriented earning model that does not directly incentivize gaming engagement.

Value Capture

XAI captures value through gas fees on the chain and governance over the ecosystem. With subsidized (gasless) transactions for end users, the actual gas fee revenue accrued by the chain is limited. The token's value is driven by expectations of future gaming ecosystem growth and the staking/rewards dynamics of the node network. Current value capture from gaming activity is negligible.

Risk Factors

  • No killer game: Without a compelling game driving organic player adoption, Xai risks being infrastructure without purpose — a gaming chain that no one games on.
  • Node sale dependency: The node sale created significant capital but also obligations. Node holders expect returns, and if gaming adoption does not generate sufficient activity, token emissions to fund rewards create inflationary pressure.
  • Gaming chain saturation: Immutable, Ronin, Beam, Treasure, and general-purpose L2s all target game developers. Xai's differentiation beyond "backed by Arbitrum" is unclear.
  • L3 value proposition: The incremental value of an L3 over an L2 for gaming is debatable. Arbitrum One is already fast and cheap; many games could deploy directly on L2 without needing a dedicated L3.
  • Adoption metrics inflation: Chain activity metrics that blend DeFi, node operations, and gaming can overstate actual gaming traction.
  • Ecosystem dependency: Xai's technology and reputation are tied to Arbitrum and Offchain Labs. Any issues with Arbitrum's infrastructure or reputation could impact Xai.

Conclusion

Xai has strong technical foundations courtesy of Arbitrum's engineering team and the Orbit framework. The vision of frictionless blockchain gaming with invisible web3 infrastructure is the correct goal, and the account abstraction and gasless transaction features are genuinely useful building blocks. The Offchain Labs backing provides credibility and resources that most gaming chains lack.

But technology and credibility do not build a gaming ecosystem — games do. As of early 2026, Xai's game catalog is thin, player engagement is minimal, and the community is dominated by node holders and token speculators rather than gamers. The Sentry Node sale successfully bootstrapped a financially committed validator network, but this is infrastructure engagement, not the gaming adoption that justifies a dedicated gaming chain.

The scores reflect a technically competent L3 with adequate backing but underwhelming gaming reality. Xai is early enough that this assessment could change dramatically if major game launches succeed, but the current state is a chain with strong plumbing and empty rooms. The key question — why does this need to be a separate L3 rather than games deploying on Arbitrum directly? — has not been convincingly answered by the gaming ecosystem's traction so far.

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