The research division of cryptocurrency exchange Huobi – Huobi Research-has observed a surge in curiosity in blockchain technology powered gaming as a direct outcome of the GameFi activities. Play-to-earn gaming (technically referred to as GameFi) reflects the utilization of decentralized finance (DeFi) and blockchain technology to reward players via the usage of a play-to-earn structure.
GameFi efforts have witnessed a significant boost from June 2021, as per Huobi Research, which attributes this to a significant decrease in trading costs as well as a better customer experience. According to the findings, renowned blockchain games like CryptoKitties had recorded a peak of 140,000 DAU (daily active users) and 180,000 transactions per day in November 2017, but had lost more than 90% of their user involvement in a matter of few months:
“Single-model games, basic fun, and bad overall experiences were common in the initial blockchain games,” says the author.
The blockchain gaming sector, on the contrary, has seen a resurgence with the integration of non-fungible tokens (NFTs), decentralized finance (DeFi), and many more play-to-earn aspects. Back in June, Axie Infinity, the FT-centered pet game generated $9.72 million in 24 hours, eclipsing the high figures posted by Tencent during that period. “DApp rankings indicate that five out of top nine applications belong to the category of GameFi. Notably, the weekly active users of GameFi’s apps reached a new all-time high of 9.21 million at the start of December 2021.”
Given the evidence presented above, Huobi Research came to the conclusion that transaction fees are critical in the field of new institutional theory.
“The society prefers to pick the model with the minimal transaction fees to run,” according to the authors, even though the gaming sector has previously adopted play-to-earn elements.
GameFi differs from other current game formats in three important ways, according to the findings of the study:
The free exchange of game components, the unrestricted trading and value of game currency, and the preservation of intellectual property rights are all important considerations. GameFi developers do have the edge of implementing personal property rights through the use of NFTs: “This in itself represents an upper hand that conventional game creators never have enjoyed, and also demonstrates the inherent value of blockchain technology in the gaming world.”