2022. The year of GameFi

Just as 2020 was the year of DeFi, 2021 was the year of the breakthrough for NFTs and Play to Earn games. This year 2022, GameFi will continue to grow, and we need to keep a close eye on how this growth is happening.

What to expect in 2022

According to a study by the Blockchain Gaming Alliance, of which BELOBABA is a member, in Q3 alone NFT games generated $2.3 billion in revenue. No wonder that 2021 saw significant investment in the sector. Animoca Brands recently raised nearly $300 million.

But even with these numbers, GameFi is in an incipient phase and during this 2022 we will see if it is the year of consolidation. Not only in the number and type of games that will arrive, but also in the attractive possibility of earning money by playing games.

For this growth, the adoption of the metaverse will be key. Will this be the year in which your avatar will be interacting with others virtually in the metaverse?

During 2021 we have already seen the incursions of large companies in the metaverse, no need to remember the rebranding of Facebook to Meta and what it meant in the market. And what about sports or fashion brands, such as Adidas or Nike.

GameFi is set to be the big beneficiary of growth of the metaverse and we are already seeing games that combine NFTs and their use in the metaverse, allowing players to get the best of both worlds.

Along these lines, Axie Infinity announced a new metaverse with land purchases in their game, new gameplay, and ways to earn SLP – their token in the game.

Other games, like Axie, will try to take advantage of the popularity of the metaverse to increase their base and expand their markets. Once again, the fact that people appreciate games and the opportunity to make money means that GameFi’s own projects have a solid foundation to grow.

Another important point for 2022 will be the “gamification” of DeFi, as Defi Kingdoms has done on the Harmony network. Thanks to the success of this game, which we discuss below, the protocols will gamify their User Interface and Experience to try to imitate the success of this game.

GameFi projects to watch in 2022

Along these lines, we think that the following games are and will be the most important in 2022:

  • Axie Infinity. It needs no introduction, it is one of the biggest and fastest growing games. According to DappRadar, in the last 30 days, it has had a volume of $698.07 Million.
  • Defi Kingdoms. This game is challenging Axie Infinity and, according to DappRadar, it is the game with the highest volume in the last 30 days of $1.68 Billion.

This game has managed to mix GameFi with DeFi, which has attracted a lot of interest from users.

  • Illuvium. It is one of the most expected games for this 2022. The delay of the release of Illuvium 0 and the general downturn of the market have made it not a good start for 2022, but it will undoubtedly be one of the titles of 2022.
  • The Sandbox. It is undoubtedly the great example of the fusion between GameFi and the metaverse, and much is expected from this community where Voxel assets and experiences are created, shared and monetized.

We don’t want to stop talking about one of the games we are collaborating with, Outer Ring. This game will be released in June but you can already find playable demos of it.

One of the challenges of GameFi could be to overtake the traditional gaming market, which is expected to grow to $200 billion by 2023. Although it still has a long way to go to reach the traditional gaming ecosystem, Play to Earn games are the perfect option for wider adoption of the crypto ecosystem.

Growing Difficulties to Overcome

Although there is a lot of potential in GameFi, it is necessary to overcome some challenges.

The first is the ability to establish a market for NFTs and other game assets. Most of these assets tend to fetch good prices, as well as enjoy high liquidity, when the cryptocurrency market is strong. Once a downturn occurs, activity tends to drop immediately and so do their tokens.

GameFi projects have to look for something that will keep people playing even when the market is in a downtrend, if they are not able to improve their gameplay and given the competition in the number of games, they will disappear.

At the same time, simplicity should be a goal of GameFi projects. One of the areas where DeFi has failed so far has been with a proper user interface. 

Many projects remain difficult to use and users do not understand how they work. GameFi projects need to get better at designing their platforms, to make them more usable and players can feel more comfortable and attracted to them.

And another important point to take into account is the congestion of the networks on which these games run.

We have a clear example of this point with what happened last week with the congestion suffered by the Polygon network as a result of the Sunflower Farmers game.

Sunflower Farmers, a money-making game released in late 2021, has caused gas rates to increase by 16 times on Polygon’s network. As a result, Polygon users have complained about congestion issues on social media channels. In the last week, Sunflower Farmers has become the biggest gas guzzler on the network, consuming 42% of all transaction fees on Polygon.

This increase in gas fees has created problems for other dApps that have postponed launches, such as Double Protocol.

The increase in gas rates has occurred since the game rewards players for each action in the game. In addition, tokenomics makes the rewards smaller and smaller, which has made players perform the greatest number of actions to get these rewards.

This type of game mechanics, makes it very attractive to bot creators, who can automate these actions and collapse the network.

According to DappRadar, the increase of users in the last month has been 125,752%, with a total number of 475.72K users.

The good news for users of the Polygon network is that it has not been inactive at any time, something that has happened with other networks such as Solana.

Situations like this can continue to occur on all networks, since many of the games have a single objective, which is to attract the maximum number of players with a very aggressive tokenomics model, but doubtful sustainability over time.

For this reason, one of the great points of blockchain trilemma is scalability of networks. This will be a very important point during 2022.

From Belobaba, and specifically from the Gaming area, we see a year full of news at the level of projects, alliances, big publishers making important moves in the GameFi sector. The first esports tournaments with GameFi games and much more.

From our side, we will have many news that we will be explaining through our networks, articles, etc. I hope you like them!