The application of blockchain technology in gaming has been a revelation for gaming enthusiasts. For a very long time, professional gaming has been dominated by the top 0.1% of athletes. Blockchain aims to end this monopoly through a concept called GameFi. The blockchain gaming industry surged to $3 billion in 2021 from absolutely nothing. By 2025, the blockchain gaming industry is set to grow to $39.7 billion. The key goal of GameFi is to encourage increased participation in the professional gaming industry.
What Is GameFi?
GameFi is a combination of two terms: Gaming and DeFi (decentralized finance). GameFi describes the integration of blockchain and gaming to enable monetization. It is a concept backing the argument that games can create a whole new economy. How? Well, blockchain is at the heart of this concept. The technology allows gaming developers to bring property rights to the gaming world. These rights are attributed to ownership. GameFi introduces the concept of in-game marketplaces and thus, in-game economies. Players can own in-game assets like skins, avatars, and weapons in exchange for stablecoins or other cryptocurrencies. Owners have the right to hold, lend, or sell the assets they own. GameFi proposes the play-2-earn model where contributors are rewarded with ownership of in-game assets.
The Economics Of GameFi
The popularity of crypto gaming continues to skyrocket as it allows developers to generate a dependable income. Moreover, it creates value for players through the concept of ownership. Gamers are able to earn a monthly income just through gaming. According to Bloomberg, nearly 50% of active cryptocurrency wallets connected to decentralized applications in November (2021) were for playing games. Despite the growth of trends like DeFi and Web3.0, GameFi remains a force to be reckoned with. The involvement of DeFi in gaming makes it a sustainable economy.
How Players Make Money?
Gamers in several countries are already making a living through GameFi. So how do they make money? Well, there are more that one ways to make money through blockchain gaming. The easiest way is to just play and earn some in-game cryptocurrencies on the go. Another way is to participate in tournaments and concepts. Players can also create their own characters, skins, and avatars, thereby, turning them into contributors. These characters are generally represented by NFTs which can be sold to earn money. Also, gaming platforms reward such players for their contributions in form of NFTs or cryptocurrencies.
Examples Of Successful Blockchain Gaming Projects
Axie Infinity ($AXS): Axie Infinity is the first major hit in blockchain gaming. It is an NFT game inspired by Pokémon and Tamagotchi, where players can earn by breeding, racing, battling, and trading cute Axie creatures. Axie has a market cap of $8.55M while the net market volume is $275.42k. The gaming platform recorded a whopping $563.6 million in sales in the first 30 days of 2022. The project has been witnessing monumental growth since its launch. Gamers in Phillippines are widely using the game for a reliable monthly income. Over $1.56 billion worth of $AXS remains staked.
The Sandbox ($SAND): The Sandbox is a decentralized gaming platform whose growth is fuelled by the Metaverse boom. It is a platform by the players and for the players. Users can play, create, and own a metaverse space. The Sandbox IP, on which the Sandbox metaverse is built, has over 40 million mobile installs. The net market volume of $SAND is over $210 million.
Growth Outlook For Blockchain Gaming
From all the trends and the increasing participation of users, one could easily be bullish on GameFi. The integration of concepts like NFT and Metaverse is a boon for developers focused on enhancing interaction and user experience. Axie Infinity Land, an NFT collection attributed to Axie Infinity, already has more than $4 billion in net sales. DeFi Kingdoms, another similar collection, shot to popularity in 2022. Together, the total value locked (TVL) for Alien Worlds, DeFi Kingdoms, and Axie Infinity is more than $3 billion.
TVL in $USD of the top 5 gaming projects
Just by looking at the top 5 projects in the blockchain gaming space, one can tell that the future of GameFi is bullish. Despite the uncertain nature of the crypto market, the increased user interaction and the involvement of big players are fuelling an exponential growth in blockchain gaming. The next five years could be really exciting for GameFi, given the increasing enthusiasm of gamers and developers both.