The price of Floki Inu (FLOKI), a memecoin inspired by Elon Musk’s pet dog, jumped 15% on Sunday and trading volumes soared over 300% on Monday. The rally came as traders and investors bet on the project, which is pushing to attract more users for its Valhalla metaverse game in China.

FLOKI surged from $0.00003120 to $0.00003587 over the weekend, according to CoinGecko data. Trading volume for the token climbed to $99 million on May 29, up nearly 300% from the previous week’s average of $25 million.

As of writing, however, the price of FLOKI fell 2% on the day to $0.00003291 and average 24-hour trading volume dropped to $17.12 million. The token is down more than 90% since its all time high of $0.00033651 on Nov. 4, 2021.

FLOKI 7-day price ($)

Chinese flock to FLOKI

Floki is a cryptocurrency that began life as a memecoin but has evolved to become a fully fledged web3 project. Created in Sept. 2021 by an anonymous team of developers, the Floki ecosystem now includes a decentralized exchange, an NFT marketplace, and Valhalla.

In February, the team announced it would be targeting China in its latest push to attract more players for Valhalla, a play-to-earn (P2P) metaverse game that allows players to earn FLOKI tokens by completing quests and battling other players.

Also read: BBC’s Doctor Who and Top Gear Coming to the Sandbox Metaverse

Since the announcement, Floki now has a Chinese website and its technical documents, including the whitepaper, are available in the language. Floki is working with Btok, a popular web3 social network in China, to “introduce FLOKI to 10 million Chinese crypto users.”

Floki has also been running ads for Valhalla during some of the biggest sporting events in China such as the Chinese Super League and the Chinese Basketball Association. It also sponsored the just-ended World Table Tennis Championships Finals in South Africa.

The ads have helped to raise awareness of the metaverse game among Chinese gamers.

“We’ve gotten an influx of Chinese traffic today due to the CCTV-5 [the main sports channel in China] feature, and we want to remind you that FLOKI is strategically positioned for Hong Kong and China opening up to crypto,” said the Floki team in a tweet.

We've gotten an influx of Chinese traffic today due to the CCTV-5 feature, and we want to remind you that $FLOKI is strategically positioned for Hong Kong and China opening up to crypto.

Below is our "China Plan", which highlights our strategy for China:https://t.co/Zn7NDGdQ6q

— FLOKI (@RealFlokiInu) May 28, 2023

Hong Kong eases crypto regulations

The focus on China is a major development for Floki. The Chinese market is one of the largest and most lucrative in the world, and if FLOKI can successfully tap into this market, it could see significant growth in the coming years, observers say.

Floki’s China push comes at a time when the Hong Kong government is expected to legalize crypto trading starting June 1, allowing citizens to invest in assets such as bitcoin (BTC) and ethereum (ETH) on regulated crypto exchanges.

“While FLOKI is a global cryptocurrency our goal is to be the most known/used crypto. That won’t be possible without China and Hong Kong,” the team wrote on Twitter.

The Chinese version of Floki’s play-to-earn metaverse game Valhalla will be released in the second half of 2023 and will feature a variety of gaming experiences like racing, fighting, and role-playing, it added.

On mainnet, users would have to hold a certain amount of FLOKI in their wallet to make a character playable. The game is still in development, but it has already generated a lot of excitement among the Floki Inu community

Chinese city Zhengzhou has announced a plan to boost the metaverse industry by providing a significant 10 billion yuan ($1.42 billion) fund for local companies’ growth and development.

Although the People’s Bank of China banned digital assets in September 2021, the Asian power centre seems liberal towards the metaverse.

Under the new government’s draft, metaverse companies relocating their headquarters to Zhengzhou will have the opportunity to grab a start-up capital investment of up to 200 million yuan ($28.34 million).

In addition, the municipal government will provide a promising opportunity for companies operating in the metaverse sector within the city.

Chinese city Zhengzhou has released a policy draft to support the development of the metaverse industry with a $1.42 billion fund, aiming for a thriving metaverse industry by 2025 pic.twitter.com/5dLGj1Rmp1

— 0xClaudia (@0xClaudiaCloud) May 29, 2023

For each project that receives certification as viable by the government, companies will have the chance to secure a substantial grant of 5 million yuan ($710,000), regardless of their headquarters location.

Moreover, the government is offering other benefits such as rent subsidies for the metaverse company within Zhengzhou.

Open for public to review

The draft is now available on the municipal government’s website for feedback and review by the public.

“The public is now open to solicit opinions, and all sectors of society are welcome to put forward their opinions and suggestions,” reads the translation.

Hence, the purposed plan is only a draft to date, and the government has not mentioned the specific date of the fund allocation.

The metaverse-related sectors in Zhengzhou are expected to generate annual revenues exceeding 200 billion yuan ($28.34 billion) by the end of 2025, according to the municipal government.

Amid speculation about China lifting an absolute ban on crypto, the public is taking this draft as positive news for the industry.

“More positive news for crypto from China, that’s great,” wrote a Redditor in reaction to the news.

“One positive thing after the other,” another agreed, hopeful of China’s liberal step towards the crypto industry.

Will China overtake the West?

Western industry leaders like Meta wanted to be the leaders in the metaverse, but are now pivoting towards AI. Whereas China appears to be positioning itself as a potential metaverse hub.

As part of its commitment to spearheading China’s digital advancement, Nanjing, the capital of Jiangsu province, has also launched the China Metaverse Technology and Application Innovation Platform.

Chinese cities are promoting the metaverse sector as the future of the digital economy.

— ICNN (@icnncryptonews) May 29, 2023

“The Metaverse is a vague concept and every [company] is interpreting it in its own way. In China, it’s very much a government-led concept,” said Brady Wang, an associate director at tech market research firm Counterpoint.

The Chinese government is clearly keen on the technology.

“The key difference [in the metaverse] between China and the rest of the world is it’d be heavily regulated in a centralized manner,” said Zhengyuan Bo, a partner at China-focused research firm Plenum.

Bo emphasised that the monetization of digital assets within the metaverse is constrained due to limited space for growth.

“I think in a decade or two, China will play a bigger role in everything than the US,” speculated one Redditor.

“America hates China because China doesn’t do what America wants it to. They hate it because it exists. I’m happy China is dedollarizing,” another Redditor expressed.

Sandbox founder Sebastian Borget has described the metaverse race as a ‘marathon of many sprints,’ as the industry moves beyond the hype cycle to build real value.

Borget remains bullish on the sector and sees opportunities for AI to play its role in building the metaverse stronger, better, and faster.

Raising funds

In November 2021, during the height of metaverse mania, Sandbox raised $93 million at an undisclosed valuation. Today Borget and the company he leads must contend with more challenging macroeconomic conditions, as well as the new technology hype trend – AI.

But Borget remains bullish despite tech’s shifting focus. The co-founder and COO is confident that the company can raise more capital if required, though it may take a little longer given current market conditions.

“Running the Sandbox is like a long marathon of many sprints,” an unfazed Borget told Forbes last week.

Borget firmly believes that the metaverse is poised to become a multi-billion dollar sector. Multiple industries are now finding real value in the metaverse and metaverse-related products, extracting profits from their forays into the virtual plane. As Borget sees it, this augurs well for Sandbox.

“We’ve been very attached to showing concretely what is possible in the metaverse as early as possible. We’ve showcased that it’s not just about gaming, but a new format of entertainment that lies between social interaction and gamification,” said Borget.

“And we’re going to showcase that the Sandbox is resilient and not depending on tech or crypto market crash,” he added.

🔷 @BBC is joining The Sandbox! 🔷

In partnership with @RealityPlusWeb3, favorite brands like @BBC_TopGear and @DoctorWho_BBCA will be bringing immersive new experiences to our community playing around the world! 🌐https://t.co/mpAPLj3ru5

— The Sandbox (@TheSandboxGame) May 25, 2023

That resilience will come down to Sandbox’s popularity and whether it can build critical partnerships and establish a thriving community of users. Since its launch in 2018, the virtual world has enticed 23,500 users to buy virtual land plots. The corporation has further signed 400 brand partnerships.

While these figures paint an optimistic picture of the future for Sandbox, there are still some challenges that lay ahead.

More to do

Sandbox has more to do if it is to be a long-term success story with usage of the platform in decline from last year. Sandbox had 100,000 players in the first quarter of 2023, representing a 72% drop from a comparable 10-week period that ended in November of 2022.

Active wallet addresses are also down 90% from their peak a year ago, according to data from CoinGecko and DappRadar.

Borget remains philosophical about the figures, pointing to the fact that users can visit the platform without making transactions. As for the transactions that were made, these amount to sales of $1 million.

“We have more creators than ever, more users than ever and more brands than ever,” said Borget. “It’s because there’s real utility behind virtual lands and avatars. People see that they can play, engage, and monetize their lands and creations.”

The co-founder is now predicting double-digit growth throughout the rest of the year. The next sprint cycle should see Sandbox fully open to the public as it moves beyond the beta phase. 

Beyond that, the company plans to launch the metaverse project on smartphones next year. That would see Sandbox tap into the mobile gaming market, accounting for half of the gaming industry’s $183 billion revenue last year.