What occurred in 2022 and the place is the business heading?

by Jeremy

This annual report appears at cross-chain information from the blockchain business to stipulate an important metrics and traits from 2022 in GameFi. 

By taking a look at final yr via the lens of on-chain analytics, we are able to map the trajectory of the GameFi business and make extra clever funding choices and analyses in 2023. 

By the numbers, 2022 was a catastrophic yr. After hitting euphotic highs, traders, GameFi members, and NFT holders noticed the worth of their holdings drop precipitously. Those that have been extra unfortunate misplaced all their property as they acquired caught up within the collapses of Terra, BlockFi, Celcius, FTX, or one of many different smaller tasks which failed or acquired hacked. 

However, well-known recreation studios continued to speculate closely in GameFi. Analysts nonetheless foresee that blockchain video games—once they develop into extra playable—might be one of many major autos driving mainstream crypto adoption. 

However till then, most GameFi tasks nonetheless fail. Meaning these concerned within the blockchain business should look past headlines and whitepapers to find out what’s taking place inside a protocol and to find out its sustainability. 

The place does on-chain evaluation are available?

For gamers and retail traders: Video games nonetheless battle to interrupt out of the dying spiral cycle, and GameFi investing nonetheless resembles Ponzi schemes, the place the target is to get in early, then get out earlier than the venture goes down. If enjoying a recreation primarily for enjoyment, one should be extraordinarily cautious of on-chain indicators which point out a decline is incoming. 

For builders: Builders should carefully monitor cross-chain traits as their alternative of launch or growth platform can considerably affect a venture’s success. Issues embody ecosystem help, consumer base, and efficiency. Our evaluation of GameFi tasks considers these components.

Lastly, for those who’re a VC or media outlet researcher, your job is dependent upon producing correct insights concerning the GameFi business. This report appears on the underlying information. 

It is going to reply three questions:

  1. What’s the most important information from 2022, and the way does it have an effect on the outlook of the GameFi business?
  2. What tasks have been probably the most vital final yr, and the way had they impacted blockchain gaming?
  3. Which networks are attracting GameFi growth and why?

Key Findings

Total Market

  • The market cap of GameFi tokens droppers from $27B initially of the yr to $3.3B by the tip
  • The month-to-month quantity of GameFi transactions declined severely, going from $3.1B in January to $80M in December, an 97% drop
  • Nevertheless, the variety of transactions in blockchain video games remained comparatively fixed, bouncing throughout the band from 130M to 185M
  • BNB attracted the most important variety of new tasks in complete, with 296
  • Nevertheless, Polygon, Wax, and Solana grew by higher relative numbers, doubling and tripling their variety of tasks in comparison with 2021

Financing & Funding

  • GameFi funding elevated by 83% in comparison with 2021, with $5.4B in funding in comparison with $2.9B 
  • Regardless of the bear market, big-name studios both continued to, or started to, enterprise into GameFi
  • The most important fundraising occasion occurred in April when Epic Video games, the studio behind Fortnite, raised $2B led by Sony for its metaverse venture
  • Animoca solidified its place as probably the most lively chief in GameFi, having closed 61 rounds, greater than twice as many as the subsequent most lively investor
  • Animoca additionally acquired the second-highest quantity of funding after Epic Video games, with $434M

GameFi Customers

  • In GameFi, extra customers don’t correlate with extra quantity or extra transactions, making it tough to type a holistic image of exercise on-chain
  • Nevertheless, Wax had the best common of every day lively customers, adopted by Hive and BNB
  • Relying in your outlook, this may both point out the energy of Alien Worlds and Splinterlands, or the prevalence of bots on these video games
  • Among the many prime 5 chains by lively customers, Polygon had probably the most appreciable progress, rising by 381%

Initiatives Overview

  • GMT had the best common quantity of any GameFi token in 2022, at $541M
  • Solana grew to become the go-to chain for Transfer-to-Earn tasks, with each STEPN and Walken
  • Out of the highest 5 video games by common GameFi toke quantity, MANA had probably the most vital decline YoY, at -55.6%
  • Splinterlands and Alien Worlds have been probably the most actively-played video games in 2022, with 383K and 228K common lively customers, respectively
  • Not one of the highly-awaited, so-called AAA blockchain video games, e.g. Illuvium and Phantom Galaxies, launched in 2022

Total Market

The general market was grim in 2022. Judging by the value of GameFi tokens or NFTs, it regarded like the whole business bled out and, when it couldn’t worsen, was taken behind the shed and put out of its distress.

However wanting past probably the most superficial numbers, there have been a number of extremely optimistic indicators within the business, regardless of the lack of worth. Whereas the entire growth pre-2022 occurred on Ethereum, different ecosystems have attracted builders, creating extra innovation. 

  • GameFi tokens market cap dropped by 87% 

From $27B initially of the yr to $3.3B by the tip, the market cap occurred as the value of all crypto altcoins collapsed amid tightening macroeconomic circumstances. Maybe as an optimistic indicator for the long run, they have been additionally a few of the most extremely inflated property through the 2021 bubble, indicating that traders see blockchain video games as a high-risk however extremely high-growth alternative. 

  • The month-to-month quantity of GameFi transactions dropped 97%

The drop in month-to-month quantity was maybe probably the most jarring statistic from the final yr. This decline noticed the amount go from $3.1B in January to $80M in December. Nevertheless, it’s essential to notice that this doesn’t replicate the general exercise. As the value of GameFi tokens dropped, so too did the quantity of quantity, which is calculated on the quantity of worth in USD being exchanged inside protocols

  • The variety of transactions hovered between 130M and 185M.

Whereas the variety of transactions had its ups and downs, it was comparatively fixed, not like the sharp lower tracked by the metric of total quantity. Because of this, at the same time as returns declined, GameFi nonetheless retained most of its exercise. (Or, presumably, its bots.)

GameFi Transactions by Week
GameFi Transactions by Week
  • BNB attracted the most important variety of new tasks in complete, with 296

With its ease of growth and low cost community charges, BNB attracted many gentle video games and smaller tasks. Few of those titles grew to become hits, and BNB has but to rope in a recreation of the magnitude of The Sandbox, Illuvium, or Axie Infinity. 

Number of GameFi Protocols by Chain
Variety of GameFi Protocols by Chain
  • Polygon, Wax, and Solana grew their variety of tasks by 2x or extra

Polygon doubled its variety of GameFi protocols from 153 to 306. Wax grew by 158% from 53 to 137 video games. Solana had simply 2 video games in 2021 however broke out in 2022 with 19 new titles

GameFi Funding in 2022

  • GameFi funding elevated by 83% in comparison with 2021

$5.4B of funding was disbursed to the GameFi sector in comparison with $2.9B in 2021. In 2021, institutional traders have been nonetheless thrown off by the novelty of so-called “blockchain video games,” as Axie Infinity, The Sandbox, and Decentraland hit the headlines for the primary time.

2022 was the yr when individuals realized that GameFi might develop into a genuinely disruptive power if huge piles of VC money have been used to empower conventional gaming studios and established blockchain firms to construct formidable tasks. 

GameFi Investment Amount in 2021 & 2022
GameFi Funding Quantity in 2021 & 2022
  • Huge-name studios invested in GameFi

Among the most notable examples are Sony, Epic Video games, Ubisoft and Nintendo. 

Epic Video games, the studio behind Fortnite, raised $2B led by Sony to construct out a metaverse. Particulars are nonetheless obscure as of the start of 2023. Nevertheless, the plan consists of LEGO. This was by far probably the most vital fundraising milestone of the yr. 

GameFi Project Financing amount and Financing Times in 2022
GameFi Venture Financing quantity and Financing Occasions in 2022
  • Animoca grew to become probably the most influential establishment in Gamefi

The studio and investor solidified its place as probably the most lively chief in GameFi, having closed 61 rounds, greater than twice as many as the subsequent most lively investor. It was additionally the second-highest recipient of funding after Epic Video games, with $434M

Animoca is the corporate behind The Sandbox, Benji Bananas, Arc8, and Phantom Galaxies. 

 

 

Number of GameFi Projects by Investor
Variety of GameFi Initiatives by Investor

GameFi Customers in 2022

  • Wax had the best common of every day lively customers, adopted by Hive and BNB.

All through 2022, Splinterlands (Hive’s predominant title) and Alien Worlds (Wax’s) have been neck-and-neck for the variety of lively customers. Relying in your outlook, this may both point out the energy of Alien Worlds and Splinterlands or the prevalence of bots in these video games.

 

The Average Daily Active Users per Chain in 2022 Compared to the Growth Rate in 2011
The Common Day by day Energetic Customers per Chain in 2022 In comparison with the Development Fee in 2011
  • Polygon had probably the most appreciable progress, rising by 381% in lively customers among the many prime 5 chains

Polygon is an EVM L2 constructed to scale up Ethereum. Despite the fact that the venture goes again to 2017 and its token, MATIC, went dwell in 2019, the community had its breakout yr in 2022, exhibiting span efficiency in DeFi, NFTs, and GameFi. The video games with probably the most common month-to-month DAU in 2022 on Polygon have been Planet IX (70K) and Benji Bananas (25K). 

Initiatives Overview

  • GMT had the best common quantity of any GameFi token in 2022, at $541M

STEPN was the final breakout success of the bull market and was one of many solely revolutionary titles to succeed in headlines, introducing a mobile-app-based “Transfer-to-Earn” gameplay. Nevertheless, after a month of its NFT asset sneakers and tokens inflating to the sky, the sport entered the dying spiral, and costs collapsed. The sport continues to be the second most performed on Solana. 

GameFi Token Avg Volume (2022 vs 2021)
GameFi Token Avg Quantity (2022 vs 2021)
  • Whereas Solana has had a tough time within the aftermath of the FTX collapse, it has develop into the go-to chain for Transfer-to-Earn tasks

Except for STEPN, the “Stroll-to-Earn” title Walken can be constructed on Solana.  

 

Walken - users
Walken – customers

 

  • MANA had probably the most vital decline YoY, at -55.6%, of the highest 5 GameFi tokens 

This displays a lack of confidence in its recreation, Decentraland. Decentraland was one of many unique huge 3 GameFi and metaverse titles that gained widespread recognition for its in-game property’ exorbitant worth, apart from The Sandbox and Axie Infinity. 

  • Splinterlands and Alien Worlds had 383K and 228K common lively customers, respectively

They have been probably the most actively-played video games in 2022. As we beforehand talked about, each Splinterlands and Alien Worlds are card and text-based video games with no 3D world—making them surprisingly primitive for market leaders. 

Weekly / Monthly GameFi Stats
Weekly / Month-to-month GameFi Stats
  • Not one of the highly-awaited, so-called AAA blockchain video games, e.g. Illuvium and Phantom Galaxies, launched in 2022

As of the start of 2023, Illuvium’s Beta has already been launched and a full model is predicted to launch to the general public halfway into 2023. 

This piece is a joint report by Footprint Analytics

The Footprint Neighborhood is a spot the place information and crypto lovers worldwide assist one another perceive and achieve insights about Web3, the metaverse, DeFi, GameFi, or another space of the fledgling world of blockchain. Right here you’ll discover lively, numerous voices supporting one another and driving the group ahead.

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