In the first year of GameFi, it is accumulating power in the two directions of games and game platforms
NFT has brought endless imagination to the encryption industry, and it has also really promoted the development of the industry, from card games, digital art, avatar art, generative art, community NFT to the recent hot GameFi, to the ultimate in the encryption world Morphological Metaverse. Now, or in the foreseeable future, NFTs are or will be at the heart of it.
Judging from several indicators such as transaction data on behalf of projects, ETH burning volume, on-chain activity, and recent financing quota, GameFi’s performance is significantly better than other projects. Taking ETH burning amount and on-chain activity as an example, Axie Infinity burns more than 17,000 ETHs, accounting for 20% of the total burning amount, which is beyond the reach of other NFT projects. It should be noted that this burning amount is based on Axie Infinity running on Based on the Ronin Layer 2 network. In terms of on-chain activity, Axie Infinity currently maintains around 135,000 active people.
Before the outbreak of DeFi and NFT, there was a lot of financing, and then DeFi Summer and NFT Autumn appeared. Now a lot of financing is happening in the GameFi field, and it will be obvious in the next few months. This is the most obvious signal on the eve of the outbreak of GameFi. Then, from Q4 in 2021 to Q1 in 2022, it is likely to become GameFi Winter, and we are also very likely to stand at a turning point in the development of NFT and the encrypted world.
In the first year of GameFi, we are standing at a turning point in history
If 2020 is the first year of DeFi, then 2021 will undoubtedly be the first year of NFT. As the NFT field returns to rationality, GameFi is taking over the baton and becoming a new explosion.
Looking back at the development of the NFT track, at the level of a single project, Axie Infinity has won the championship at all levels. The latest data from DappRader shows that the total transaction volume of Axie Infinity, the NFT “play while earning” blockchain game project, has reached a record high of $3 billion, ranking first in the NFT collectible category. Axie Infinity on September 13 With a total transaction value of $2 billion and an increase of $1 billion in transactions in less than two months, Axie Infinity currently has a total volume of 840,000 sales and more than 1.03 million traders. The second place is CryptoPunks, with a total transaction value of $1.59 billion, a total of 5,251 traders, and a total sales volume of 19,000; the third place is Art Blocks, with a total transaction value of $903 million and a total of 19,000 transactions. 26,558, with a total sales volume of 106,000.
Of course, Axie Infinity is only the most eye-catching of the many chain games. With the arrival of many high-quality GameFi and GameFi platforms from 2021Q4 to 2022Q1, this field will definitely show another scene.
In addition, public data shows that as of July 30, 2021, the chain game market has attracted nearly $1 billion in investment, compared with $72 million in 2020. Most of the recent financings occurred in the GameFi field. Take 27 investment and financing events in the crypto market from October 30 to November 5 as an example, 14 of which occurred in the GamFi field, blockchain game studios. Mythical Games has also received US$150 million in Series C financing, led by a16z, the most well-known institution in the encryption industry.
In the DeFi and NFT tracks with strong financial attributes, the sense of capital is often the sharpest, or the driving force of which direction the industry is developing is capital. As early as the beginning of this year, after many NFT projects were favored by capital, the industry ushered in the NFT Summer, and the earlier DeFi development followed the same rules.
If you put aside the development of individual projects and platforms and the frequency of financing, and ask from the perspective of GameFi’s internal operating logic, why did GameFi not become popular in a year, two years or even earlier, and it is very likely at this time point outbreak?
In fact, this is related to the three characteristics of GameFi, that is, GameFi must take into account profitability, playability and fluency.
Let’s first look at GameFi’s yield. GameFi can be divided into three ways of understanding, the first is GameFi=NFT+DeFi, which refers to the introduction of NFT mortgages in DeFi; the second is the gamification of DeFi, where users turn assets into NFT equipment, through liquidity Mining and other methods to complete tasks to obtain rewards, etc.; the third type of game that really has the attributes of game play, no matter what kind of game, what participants ultimately ask is the input-output ratio.
In other words, the most essential difference between GameFi blockchain games and traditional games is the mode of earning while playing. Axie Infinity has become popular so far because of the support of its enduring economic model, which has also become the key to opening the door to the GameFi world. .
The second is game playability. The current GameFi games are still far from the traditional game quality production.However, with the entry of traditional game giants such as Gods Unchained (Immutable X developer) and UBISOFT, a well-known chain game company, the issue of game playability and aesthetics will no longer be a problem.
Lastly is the smoothness of the game. There are thousands of TPS in traditional games, which is unmatched by GameFi.However, judging from the performance of Axie Infinity after Ronin went online, with the support of high-performance Layer 1 such as sidechains, Ethereum Layer 2, Solana, and BSC, it is believed that performance issues will be resolved.
Therefore, in terms of the development of individual projects and platforms in the GameFi field and the frequency of financing, we are likely to be standing at a turning point in GameFi’s history. In fact, GameFi is going in both directions.
GameFi is charging from both directions
GameFi’s development direction is divided into project level and platform level.
at the project level. The production level of some of these games has reached or even surpassed the current traditional 3A (high development cost, long development cycle, and high resource consumption) games.
Of course, in the process of GameFi’s development, there will inevitably be some pseudo-chain game products in GameFi’s coat. The essence is still to pursue high-yield in a short period of time, but such games that lack playability will not last long.
Then at the platform level, the GameFi platform is actually a high-performance infrastructure that supports the operation of GameFi. It can be a dedicated platform such as Ronin, Immutable X, and Gala, or a general platform such as Solana, BSC, and Ethereum. But for now, The important task of supporting the development of GameFi will fall on the high-performance Layer 2 and Layer 1, and the side chain. GameFi is in a situation where both game projects and game platforms are blooming, so how will it evolve in the future?
The future of GameFi, the “urban desert”?
Obviously, GameFi is an important development direction of the blockchain industry, and it is also a higher-level expression of DeFi, that is, game financialization. Players generate income through Play to Earn. The game itself is completely open. The major innovation of Play to Earn itself lies in the game. Most of the revenue no longer belongs to the large centralized game companies, but to good players. Compared with the traditional financial model moved to the chain, the former obviously belongs to a native business model and deserves more attention.
Just take the most successful Axie Infinity as an example. In this game, players need to use tokens to synthesize Axie sprites. The sprite itself is also an NFT asset in the game. Axie sprites can be used for game mining, daily task completion and competitive tasks. Earning income, which is called pledged tokens, synthetic assets, and income in DeFi. In other words, GameFi, like DeFi, realizes an internal cycle. However, the obvious advantage of GameFi and DeFi is that it is interesting. It will attract a large number of non-currency users to participate in the encryption revolution.
As we all know, Aixe Infinity has even become the main source of income for some poor Southeast Asian families, which has exceeded the minimum wage level. Aixe Infinity also spawned the YGG union (Yield Guild Games), which laid the foundation for the popularity of difficult GameFi.
Therefore, it can be seen from the development context of Aixe Infinity that the GameFi field will develop in the direction of DAO (YGG itself is also an autonomous organization), a fun and more open business model in the future, which is a big step in the blockchain industry, and also The beginning of the prosperity of the decentralized virtual economy.
However, we also need to realize that the current chain game is still in the early stage, and the performance problem is still the number one problem. When the game involves complex high-frequency transactions on the chain, the requirements for the underlying infrastructure are relatively high. With the development of high-performance Layer 1 such as Layer 2, Solana, and BSC, this problem will also be gradually solved.
Will GameFi’s ultimate form be the Metaverse that is now on fire? Or will the future form of the Metaverse be the ultimate form of GameFi? We will wait and see.
Pacific is a decentralized NFT marketplace and an integrated platform for metaverse/GameFi assets. The project has received endorsement from some of the most eminent institutions and investors, including the Web3.0 Foundation, NGC, Gate.io, Krypital Group, PAKA, Candaq etc.