Blockchain gaming will overtake decentralized finance (DeFi) as the major contributor to decentralized application (DApp) activity in terms of uniquely active wallets. A new 18-page report from DappRadar examines the emerging ecosystem behind this surge.
Though still dwarfed by the traditional gaming industry, blockchain gaming, sometimes referred to as GameFi, has experienced an early exponential growth spurt, according to the report’s data.
The report, The Evolution of Blockchain Games, which discusses play-to-earn (P2E) as the new paradigm for gaming, is available for purchase on the Cointelegraph Report Terminal. It describes how the play-to-earn model gained prominence during the COVID-19 pandemic as players from emerging markets looked for new revenue streams. During the second quarter of 2021, which was characterized by 503% sequential growth, Wax’s hit space-mining game Alien Worlds was one of the top winners. Other major players in this space were Axie Infinity, Decentraland, Splinterland, and Upland.
The report posits that while opposition from the traditional gaming industry and mainstream media is still considerable due to negative press coverage, a better understanding of blockchain technology could allay these concerns. The researchers argue that increased public awareness of comparatively low-power Proof-of-Stake (PoS) technology and the possibility of robust in-game asset ownership could make GameFi fit for the mainstream in the long term. They conclude that “the horizon for blockchain gaming is rapidly opening”.
DappRadar also breaks down the development of GameFi on different Layer 1 ecosystems. Some games have grown big enough to maintain their own blockchains, like Axie Infinity with the Ronin blockchain, DeFi Kingdoms with the Harmony Protocol, or Splinterlands with Hive. Moving to dedicated chains may be a way for blockchain games to deal with scalability issues that still plague some projects.
Download the full report with charts and infographics from the Cointelegraph Research Terminal
For example, Polygon, which was developed as a Layer 2 solution to deal with Ethereum’s notorious scaling problems, could not fully withstand the transaction volume generated by GameFi. Earlier this year, it suffered badly from the farming game Sunflower Farmers and saw its transaction fees surge to 500 Gwei. Although such technical teething problems will keep developers in this area busy for some time, the overall conclusions of the report are positive.
The increasing inflow of venture capital investment is one of the strong signs that the space is consolidating as an industry, the report says. While just $70 million was raised by blockchain gaming companies in 2020, the sector attracted $4 billion in VC investment in 2021 and has already seen an additional $2 billion inflow in Q1 2022. With the rise of dedicated VC companies like Hong Kong-based Animoca Brands, GameFi is likely to continue to gain momentum with dedicated infrastructure.
An assessment of the interplay between DeFi, NFTs and the Metaverse completes the comprehensive analysis. The increasing interoperability, decentralization and democratization of games made possible by the symbiosis of these technologies promise an exciting future. The full content of the report can be viewed here.
This article is for informational purposes only and does not constitute investment advice, investment analysis or a solicitation to buy or sell any financial instrument. In particular, the document does not serve as a substitute for individual investment or other advice.
https://cointelegraph.com/news/gamefi-is-showing-signs-of-a-mature-landscape-report GameFi Shows Signs of Mature Landscape: Report