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author | Footprint analyst Simon edit | Colin WuThis article is an exclusive collaboration between Wu Shuo and Footprint
Game financing has been very popular recently. According to data from Footprint Analytics, games were at the bottom in 2020, but ranked first in 2021, accounting for nearly 13% of all investments.
What is GameFi
The popularity of the crypto world has expanded from DeFi to NFT, and now to GameFi. No matter which industry controls the popularity, it controls the password to traffic. In the second half of the year, Axie Infinity once again ignited the popularity of GameFi, with the highest single-day revenue of 18.48 million US dollars, even surpassing King of Glory at one point. What exactly is GameFi?
GameFi, or Game Finance, was first proposed by Mary Ma, Chief Strategy Officer of MixMarvel, in 2019 to integrate finance into games. How to achieve this? NFT-ization of game props and regularization of DeFi's liquidity mining game to realize wealth realization through games (Play to Earn, or P2E). Driven by liquidity mining, GameFi, a model that combines NFT and DeFi, has been further developed.
Compared with traditional games, GameFi has the following advantages that cannot be ignored:
- Asset ownership In GameFi, through on-chain smart contracts, game assets belong to players rather than developers. Players truly own game assets and can trade them. - P2E achieves win-win situation. By owning the ownership of assets, players can realize assets, whether it is NFT in the game or game tokens, they can trade and earn profits. This new model makes developers, players and publishers achieve win-win situation. - Data transparency The essence of GameFi is the distributed management of blockchain. The game code is open source and transparent, and developers cannot tamper with it at will. As a player, you can also vote to participate in the upgrade and transformation of the game through DAO, which further increases the participation of players.
Compared with DeFi, GameFi lowers the threshold for users to enter the blockchain world, simplifies finance through games, and enables blockchain to quickly "go viral."
At a time when public chains are emerging one after another, different public chains are constantly innovating in terms of differentiation. In the stablecoin public chain track, Terra Chain first rushed to the third place in the public chain TVL ranking at the end of August, and then there was Celo Chain, which focuses on decentralized mobile payments.
Similarly, in the case of GameFi, a good GameFi project can also become an ecosystem, and even make some unknown public chains. The sidechain Ronin built by Ethereum for Axie Infinity can illustrate this point well. The WAX chain focusing on games and the Flow chain focusing on NFT are also among the more popular public chains.
BSC counterattack
Ethereum still tops the TVL list of public chains with an absolute advantage, but the low transaction speed and high gas fees have become obstacles for ordinary users to enter the blockchain world. BSC has been making great efforts in blockchain games with a throughput that is almost 6 times that of Ethereum. Currently, 195 game projects have been deployed on BSC; according to Dappradar statistics, BSC occupies 4 places in the top 10 games. Reason 1: High transaction efficiency and low gas fee Ethereum remains the top in terms of TVL and total number of unique addresses, but in terms of the number of unique active addresses and daily transaction volume, BSC completely surpassed Ethereum in April and February of this year, respectively. In terms of active addresses, Ethereum fluctuates between 400,000 and 600,000 per day, and BSC fluctuates between 1.5 million and 2 million per day, which is basically 3-5 times that of Ethereum, and the daily transaction volume is as high as 13 times. Footprint Analytics: Unique Active Addresses in 2021 Footprint Analytics: Daily Trading Volume in 2021 Compared with Ethereum, BSC has higher transaction efficiency, lower gas fees, and is also compatible with Ethereum Virtual Machine (EVM), which allows Ethereum developers to migrate to BSC at low cost and attract more small and scattered users to enter the world of blockchain. The entire BSC ecosystem, from resources to infrastructure, is more friendly to the development of game projects. Reason 2: Incentives such as incubation funds and hackathon competitions
In order to stimulate the development of the entire NFT ecosystem, BSC officially launched the most valuable builder program "MVB II". Selected projects can receive incubation opportunities such as US$10,000 seed funds and comprehensive audit fee support. In July this year, BSC announced the list of winners, including currently popular blockchain game projects such as CryptoBlades, MyDeFiPet, MOBOX, X World Games, etc. In the next MVB III plan, it is directly positioned as GameFi. I believe that BSC can once again set off the GameFi field. BSC regularly holds global hackathons and launches Learn & Earn activities. Of the 9 projects in the two Learn & Earn events held so far, 4 involve games or NFTs, including CryptoBlades, which skyrocketed in July. By rewarding unique NFTs and bonuses to encourage users to participate in excellent projects, BSC is a natural fertile ground for the growth of GameFi. Currently, the top 5 games on BSC in the past 30 days are CryptoMines (ETERNAL), Mobox (MBOX), Bomb Crypto (BCOIN), BinaryX (BNX) and MetaverseMiner (META). As the number of users and transaction volume continue to increase, the price of the game's native tokens has also been rising. The most crazy increase is the original token ETERNAL of CryptoMines, which has far exceeded AXS. As of October 24, the price of ETERNAL was $572, 16 times that of a month ago. For players who are for P2E purposes, they will get a lot of benefits. Footprint Analytics: Top 5 Game Token Prices on BSC Problems with rapid growth The GameFi project, which has received much attention, has also faced many problems while attracting a lot of attention with the continuous investment of capital: The player base is still small Let’s not talk about the 3 billion players of traditional games. Compared with DeFi users, GameFi’s user base is still very small. In an era when mobile games occupy an important market, most blockchain games are still web games, which seems a bit “simple”. This makes the number of players who have long been accustomed to mobile games returning to the web side even smaller. Although games have lowered the threshold for entering the crypto world, concepts such as cryptocurrency wallets, mnemonics, and gas fees are still obscure compared to traditional games. Currently, blockchain games are more attractive to players in backward areas. The global economic downturn caused by the epidemic has caused many people without income to join gold farming guilds to make a living. Congestion and high transaction fees Due to the high performance requirements of the game, frequent transactions also have high requirements for the network's transaction speed TPS (Transactions Per Second) and Gas fees. Therefore, many players leave Ethereum and seek better side chains or other public chains. The popularity of Cryptokitties in 2017 caused severe congestion on Ethereum, and Ethereum's migration of Axie Infinity to the side chain proved the importance of public chain infrastructure to the development of GameFi. Poor playability and insufficient stickiness
Even the most popular GameFi project has a very simple gameplay compared to traditional 3A games. In order to catch up with the market, it continues to integrate many good and bad games, which is more like a liquidity mining project with a good appearance. Players who really love games will not be attracted, but more "workers" who enter for the purpose of making money. When a game that is mainly for entertainment turns the cart before the horse and becomes a job that is mainly for money, it loses its original fun. When GameFi is not mainly for games but mainly for Fi, is it play to earn, or earn to play? This leads to developers and players starting with the goal of making money, and the fun of the games developed by developers decreases. Once the game cannot bring enough income to the players, the players will transfer to other projects with higher returns, and the game has no stickiness for the players. After CryptoBlades, which was very popular in July, suffered a significant reduction in revenue, its price and users have been on a downward trend. Although the project team has been working hard to strike a balance between gaming and making money, the number of players leaving the platform has increased due to the increasing speed at which players have to recoup their investment. Footprint Analytics: GameFi Daily User Status The same thing happened to Axie Infinity. SLP is an important source of income for players. When SLP drops, Axie Infinity's income decreases. Axie Infinity once helped the Filipino people affected by the epidemic to gain wealth through the form of a gold farming guild, but now the daily income of players from the game is less than the local minimum wage level. Footprint Analytics: SLP Token Price Situation In GameFi, players gain ownership of game assets through NFTs and platform tokens, use NFTs as a tool for liquidity mining, make assets liquid through DeFi, increase fun while lowering the threshold through game attributes, and complete the entire closed loop of GameFi. Although GameFi still has many problems to be optimized, it is undeniable that this is also a track full of prospects. The infrastructure problem will be further solved through Layer2 and sharding technology, and the player experience will be optimized with the promotion of VR technology and high-quality games. As an important entrance to the metaverse, the future of GameFi also has a lot of room for imagination. The last blockchain explosion was DeFi. After balancing infrastructure, playability and return rate, GameFi believes that this time the explosion will be in the GameFi track. (Head image from cryptonewsz) |
