GameFi Sector And The Most Up-And-Coming Gaming Platforms

Gaming tokens skyrocketed this summer, and it has become one of the most notable events in the crypto industry. For example, the AXS token of the blockchain game Axie Infinity demonstrated the most considerable increase by more than 1500% in three months, breaking into the top 50 assets in terms of capitalization and making it to global financial media. So what is happening in the blockchain gaming industry, and what should we expect in the future?

Blockchain technologies have been penetrating the gaming industry since 2014, when the first online casinos began accepting deposits in bitcoins. With the advent of non-fungible tokens (NFTs), it has become possible to create games where players can be rightful owners of in-game characters and objects. In turn, the emergence of in-game property entails commercial relationships.

In 2017, the project CryptoKitties proved the possibility to make money in online games when their NFT kittens were sold for tens of thousands of dollars.

The large audience of game developers and players formed in 2021, building a whole market segment - GameFi (Game Finance). The terminology was offered by well-known developer Andre Cronje and embraces a variety of game projects built on blockchain and using NFTs.

-NFT games of various genres, using Free2Play and Play2Earn models

-Metaverses

-Projects providing tools for the development and distribution of NFT games and switching the existing online games to the blockchain

-Projects that enable using NFTs in DeFi services.

The games created in 2020 and earlier were mainly built on the Ethereum blockchain. However, too high fees forced the developers to switch to cheaper and faster blockchains. Many games are built on Wax, EOS, Tron. Binance Smart Chain is also gaining momentum in the game industry from early 2021. Specialized blockchain platforms like Flow are explicitly developed for the game industry and issue NFTs.

Since early 2021, the number of NFT games has grown exponentially. The Playtoearn.net rating alone counts over 360 online  Free2Play and Play2Earn games, featuring NFTs and enabling them to earn cryptocurrencies. They embrace all known game genres - from card games to economic simulators, strategies, arcades, races. One of the most notable projects is the RPG game CryptoBlades, developed by Riveted Games. Not only because it got unexpectedly popular (90 thousand players per day), but also because the SKILL in-game token skyrocketed from $1.05 to $184 in July 2021. Even after a deep correction, the asset was trading at around $40.

Like the entire crypto industry, GameFi borrows solutions that have proven successful. For example, the NFT game My DeFi Pet, powered by the BSC blockchain, is very similar to Axie Infinity, for it implies growing and breeding pets. However, the mechanics of pets' characteristics and the whole gameplay are more straightforward. In July, the DPET gaming token demonstrated a tenfold growth - the game attracted more than 30,000 players a day, but it had dropped tenfold by the end of the summer.

Some NFT games have not been released yet, but their tokens are already traded on leading exchanges, and some even made it to the top 200 by capitalization. For example, My Neighbor Alice, a sandbox/social simulation multiplayer blockchain game developed by Antler Interactive. The game's release is scheduled for spring 2022, but the ALICE token launched on Binance Launchpool in March 2021 has already reached a capitalization of over $300 million.

Same thing with the Illuvium project. It is a decentralized RPG with an NFT collection that will run on the Ethereum network. The ILV token reached a capitalization of over $250 million even before the game's release. This was greatly facilitated by staking with more than 85% annual yield. ILV holders were able to earn both on staking and on the growth of the rate. Staking rewards paid in ILV tokens are locked up for 12 months, protecting the token price from selling pressure.

Virtual worlds or metaverses are a particular category of NFT games, where players can own digital items and land in the form of NFTs and use them within the game economy. The most well-known tokenized virtual world is Decentraland. This project development started back in 2015, and the public release took place only in early 2020. More than 45 thousand digital plots of land were sold at auctions in 2017-2018, each of which was connected with an ERC-721 format LAND token that confirmed the right of possession. Now plots can only be bought on the secondary market. In November 2021, Decentraland’s largest digital real estate deal took place: Token.com via its subsidiary Metaverse Group acquired 116 plots of land of 6090 square feets for 2.4M$. 

The plots of land in Decentraland are used for various purposes. The land is rented out; it is used to construct virtual buildings, mini-games, casinos, shopping centers with NFT stuff, and advertising platforms.

Decentraland is governed by DAO: the owners of LAND plots and the MANA token have the right to vote. Interestingly, the value of the MANA token has long gone beyond Decentraland - it is used as collateral for loans on the MakerDAO DeFi platform.

Other well-known virtual worlds also have their tokenized land markets and native currencies, such as SANDBox (an analog of MineCraft on the blockchain with the SAND in-game token) and Somnium Space (with support for 3D glasses and the CUBE token).

Axie Infinity also introduced the ability to own land in a virtual world called The Lunacian in early 2021. Its territory is divided into 90,601 land plots connected with an NFT. The plots of land can be used to collect game resources and hold PvE battles. In February 2021, the most expensive NFT plot was bought for $1.5 million. The cheapest plots on The Lunacian are now sold on the Axie Infinity marketplace for $12,000.

To date, the most popular metaverse with a digital real estate market is Alien Worlds, built on the WAX blockchain. According to DappRadar, as of August 2021, more than 400 thousand players entered this metaverse daily. The beauty of the game is that it does not require an initial investment, unlike Axie Infinity and other Play2Earn games. A beginner receives a basic set of tools for mining Trilium game tokens (TLM) which can be withdrawn and sold on crypto exchanges. Players can purchase land on planets in the Alien Worlds metaverse, receiving their share of the tokens generated by the planet daily, as well as fees from all players who mine TLM on the plot.

With the growing popularity of NFT games and metaverses, GameFi infrastructure adapted to the needs of developers, players, and investors. Here are some of the most exciting projects in this sector.

SharkRace Club is a new project which integrates the two NFT worlds: collectible NFT art and GameFi. Providing both utility and fun for its users, the play-to-earn Metaverse RPG Game is built on the Unreal Engine 4 and unveils breath-taking races in the ocean of intelligent and merciless NFT meta-sharks built on BSC. The game stands out by many points such as premium 3D graphics, top-quality gameplay design with the upcoming VR module and few great monetization models such as earning money with zero input just by selling in-game artifacts which you have gained through the race. Group tournaments with prize fund, and ability to initiate your own team-play with bids are also available.The game has many customization services, boosters and artifacts. The project developers have extensive experience in blockchain, having successfully launched Tizer crypto wallet - its infrastructure is integrated into the Game App, making it easy to enter regardless of previous experience with crypto. SharkRace is a club system. If you purchase a collectible NFT from the exclusive 20,001 NFT Sharks collection, you receive 3 gaming meta-sharks and a game gift card for free. You’re also provided with grant in project tokens SharkCoins, lifelong airdrop eligement, voting rights and staking preferences. Alternatively, gaming meta-sharks could be bought on the SharkRace marketplace. The game rolls out in April 2022 with single-play first, and it is expected to become the next global gaming sensation. The SharkRace Club IDO is taking place on the 3rd of March 2022.

Since 2017, Enjin has been creating a platform that helps developers transfer existing and new online games to the blockchain and release game items in the form of NFTs. In 2020, they launched the Enjin Adopter program, which attracted dozens of game developers, helping them create, finance, monetize, and sell their projects on the blockchain. To date, several online games are running on the Enjin platform: Lost Relics, 9lives Arena, Space Misfits, The Six Dragons, etc. In the spring of 2021, to avoid the restrictions of the Ethereum network, the company launched its Efinity blockchain with a native EFI coin. The new network provides throughput  up to 1,000 transactions per second and has its own NFT standard. Supposedly, all game projects built on the Enjin platform will work on this blockchain.

Ultra Games is another project from this sector. It was built as a decentralized and cheap alternative to platforms like Steam or the Google Play Store that take 30% of developers’ income. To date, it grew into an entire ecosystem based on Ultra Games. It includes a platform for developing and distributing games based on the blockchain and tools for monetizing the gameplay and creating decentralized marketplaces for trading virtual goods, a back office for developers, and much more. In June 2021, they launched the Ultra network (EOS fork) with the native UOS coin, which enables free and fast transactions. This network has its Ultra NFT standard and an Ultra Wallet enabling the exchange of crypto assets across the networks.

Gala Games is a developer of NFT games. So far, only one Town Star game (city simulator) is available for players, but the company plans to release several more games in different genres that will use the same NFT items. In addition, there is a single store for NFT items for all players, with prices in GALA tokens. Thus, a whole ecosystem with a single economy is formed from games in different genres. GALA is the governance token, and its holders can vote for the introduction of Gala NFT Games made by other developers. This will help middle developer teams to distribute their games and draw players to their projects.

This decentralized DAO gaming guild is engaged in investments in in-game NFTs and metaverses. The project got support from venture capital funds Delphi Digital and Andreessen Horowitz. The IDO took place in July 2021 and, as of the end of August, provided token sale participants with over 3,500% yield, while the capitalization of the YGG governance token exceeded $900 million. Not only do YGG holders participate in project management, but they also receive part of the income from operations with NFT assets, for example, from the sale or rental of game items, virtual land, etc. The project focuses on digital asset management in three popular games: Axie Infinity, Sandbox, and League of Kingdoms. In Axie Infinity, the project already owns several thousand Axies and rents them out to Filipino players, receiving 30% of the SLP tokens they earn.

Many experts believe the GameFi segment has a promising future. Developers get new tools for distributing and monetizing games, while millions of players worldwide receive the opportunity to play and earn. The financial success of Axie Infinity inspired hundreds of teams worldwide to release NFT games in various genres, so we expect numerous exciting releases in 2022.