GameFi – The Next Big Blockchain Trend?

By paragism | paragism | 23 Aug 2021

“As more and more people are automated out of the economy through robotics and self-driving cars and other technologies, there will be a way to create value for other human beings online. There will be a virtual economy for exchanging value, goods and services, entertainment experiences, and all that.” - Tim Sweeney

In 2017, Cryptokitties released its first version of the blockchain collectable game. It is regarded as an early attempt to utilize blockchain technology in the leisure domain. The game was an instant hit but the phenomenal transaction volume clogged the Ethereum network which was not ready to accept such load. Blockchain technology has gone through significant progress in the last few years and so many blockchain games exist nowadays. The popularity of NFTs or non-fungible tokens have also skyrocketed recently. NFTs are getting amazing investor attention as the asset’s ownership and authenticity is verifiable on the blockchain. It is important to note that the in-game assets of all blockchain games are NFTs. Trading of virtual game assets is possible today and it has opened a plethora of opportunities.

DeFi or decentralized finance has made it possible to trade any tokenized asset without the intervention of a third party. The in-game assets of the blockchain games generally get traded over decentralized marketplaces only. What if we combine blockchain games and DeFi with more coherence? ‘GameFi’ is a new buzzword and it can be considered as a cross between blockchain games and DeFi. The gamification of the game economy in a trustless manner makes the game more interesting and you also earn while you play.

Alien Worlds is a blockchain game that runs on WAX blockchain. The in-game currency Trillium (TLM) can be earned by the players while they play the game. The players of the game battle for the scarce resource TLM in the game economy. TLM derives its value as it is used for governance, NFT purchases, staking and in-game incentives. Alien Worlds is a great example of a successful play-to-earn blockchain game and it really brought huge traffic to the WAX blockchain. Data from Dappradar indicates that the game is the number two blockchain DAPP currently with 431K users and 86.29 million transactions in the last 7 days.

Axie Infinity, a pokemon inspired monster battle game on Ethereum, recently hit headlines for generating a record 1.1 billion USD in sales. The active user base of the game has grown exponentially within a short time. Data from Dappradar indicates that the game has 137K active users and 271K transactions in the last 7 days. Considering the high gas fee of Ethereum, that is a terrific figure. People are dying to play Axie Infinity. The players of the game earn the Axie Infinity Shard token (AXS) and another in-game token Smooth Love Potion (SLP) in several ways. The game economy rewards the tokens when the players breed, raise, and battle Axies in the virtual universe. 

Binance Smart Chain (BSC) flipped Ethereum on the daily transaction numbers sometimes back due to the success of Pancakeswap. Very recently, BSC has again started to outperform Ethereum in this key parameter, but it owes the success to a lesser-known blockchain game called CryptoBlades. Data from Dappradar indicates that the game is the number one blockchain DAPP currently with 467K users and 23.69 million transactions in the last 7 days. Really amazing numbers! The players of the game earn SKILL tokens by defeating enemies, raiding with friends, and staking gains. 

The scope of ‘GameFi’ is not limited to ‘play-to-earn’. The advancement of DeFi has shown that people are interested to earn yield from their idle assets. Some games are already offering yield farming with NFTs. As per the video gaming market size estimates of Statista: “the global gaming market will amount to 268.8 billion U.S. dollars annually in 2025, up from 178 billion U.S. dollars in 2021.” The in-game purchases will contribute a huge portion to the large market. Blockchain technology can be useful to foster innovation in this sector due to its openness.  Many big blockchain projects have already noticed the potential in this sector. Tron Foundation has launched a $300M Fund to Invest in GameFi Projects some days back and Polygon has launched a separate unit called Polygon Studios to focus on blockchain gaming. The virtual economy was already growing steadily but the pandemic has created a more lucrative online world. ‘GameFi’ can be the next value-creating blockchain trend that has arrived with a new generation of gamers to shake the world!

Note: This post was first published here for Cryptowriter.

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Cypherpunk. Writing content which I love. Creeping on the blockchain. Twitter - @paragism_


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