Among the games and platforms that exist within Web3 and the blockchain, we have seen the emergence of GameFi, a mix of games with decentralized finance that has attracted many users with a rapid rise in its numbers, attracting billions of dollars, but which has lost the space it conquered over time, because it has not been able to be sustainable with the system it has presented so far with the games that have emerged.
Therefore, let's analyze the report developed by ChainPlay in partnership with Storible on the GameFi Games scenario to understand what has been happening and what is state they were in 2024. Come find out!
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[ENGLISH VERSION]
What is GameFi?
In simple terms, GameFi is the fusion of two terms GAME + FINANCE, and since we are within the blockchain environment, this finance refers to decentralized finance, better known as DeFis. Thus, GameFis is a way for the industry to gamify finance in order to reach both gamers and decentralized finance audiences with a single product.
An example of this style of game is Splinterlands, which started as an NFT card game and evolved into a system that goes far beyond just card duels, even though that is still the main thing for some players. The game, like other games that have their own token, already had options to create liquidity pools outside the game on other DeFi platforms and generate some extra rewards within the game.
However, with the arrival of LANDs and the constant updating of this new content, the Splinterlands ecosystem has been transforming more into what we know as GameFi, since you need to stake the Dark Energy Crystal token (DEC), to activate the land along with the stake of some cards to start producing other types of tokens such as Grain and SPS. In one of the patch notes, the function of creating a liquidity pool between DEC and Grain within the Splinterlands platform was added, which characterizes GameFis. The objective of the resources obtained with the Lands, in addition to providing liquidity, is to create a new type of magic card that will be used in battles, cards that can only be obtained through player crafting.
What is the situation of GameFis in 2024? 93% are gone!
According to the report by Chain Play in partnership with Storible, a total of 3279 projects from an internal database were analyzed. Of this total, 93% of GameFi projects were considered “dead”, which in their classification would be when the project meets one of the following criteria: The price has fallen more than 90% from its highest value, the All time High or the GameFi project has less than 100 daily active users. Price data was taken from Dune Analytics and user count from DappRadar.
The report also shows the high turnover that exists in the GameFi sector, with 316 new GameFi projects being created per year, while 262 disappear, which is added to the data on the lifespan of a GameFi, being only 4 months, while other crypto projects have an average of 3 years, that is, 9x longer lasting. This shows the difficulty of retaining an investor who expects both a fun game and a good return on their capital, a situation that has proven to be challenging.
As a consequence of this situation, investments in projects of this type have become scarcer, with a decrease in its ATK in 2022 from $5.5 billion to $850 million, reflecting the great risk that exists in this project, which has driven investors away. causing them to shrink and become more discerning, which made new investments in Venture Capital projects more difficult.
