The crypto ecosystem has come a long way since Bitcoin’s debut in 2009; many trends have marked this evolution, with the latest niche being blockchain gaming. According to the 2021 DappRadar blockchain game report, the number of unique active wallets (UAW) interacting with on-chain games stood at 1.4 million, accounting for 49% of the total crypto industry usage. An increase of over 4,000% compared to 2020.
So, what’s behind this paradigm shift and sudden interest in blockchain games? There are many factors, but the most fundamental one has been the introduction of Non-fungible tokens (NFTs) and Web 3.0 ecosystems. Unlike the pioneer crypto assets (BTC, ETH & Altcoins), blockchain gaming infrastructures make sense to more people outside the crypto community. This is because of the underlying value proposition and ease of integration.
Before the launch of blockchain-oriented games, the crypto market was mainly focused on payment systems and decentralized finance (DeFi), both of which face some opposition from stakeholders in traditional finance. However, the narrative is gradually changing, thanks to blockchain games. This cryptocurrency niche has proven to be a stronger magnet; after all, most people have played an online game at some point in their lives.
Well, things get more interesting on the Web 3.0 and NFT gaming ecosystems. Contrary to the games hosted on Web 2.0, crypto-focused games introduce the aspect of decentralized gaming communities. Web 3.0 games are governed through decentralized autonomous organizations (DAOs), allowing the gamers to vote on the ecosystem development. These on-chain games have also become popular, giving early participants incentives.
A New Dawn for the Crypto Ecosystem
Following the developments in the crypto ecosystem, it is evident that tides are changing in favor of blockchain games. That said, there are several facets of this burgeoning niche. The next section of this article will highlight some of the blockchain gaming ecosystems that are setting the stage for the future of cryptocurrencies.
Play-to-Earn games rose in popularity following the Axie Infinity boom; this dapp is a product of Vietnamese studio Sky Mavis. Ideally, play-to-earn games such as Axie Infinity present on-chain gamers with an opportunity to earn ecosystem rewards for completing various tasks (PvP battles and mini-games).
For instance, players on Axie Infinity can earn rewards in the form of AXS (the platform’s governance token) or SLP (an Axie Infinity native token). These token rewards have several use cases, including swapping for other crypto assets, in-game mechanics (breeding), and leveraging the DeFi ecosystem to earn a passive income.
The gaming incentives on Axie Infinity and other play-to-earn games have attracted players across the globe, with developing economies like the Philippines leading in adoption. Today, Axie Infinity touts over 2.5 million monthly active users (MAU), a surge of over 12,400% within the past year.
Gamified Decentralized Exchanges (DEXs)
Decentralized Exchanges (DEX) are another popular trend; they emerged as an alternative to centralized exchanges, which have been a hurdle in onboarding users to the crypto market. Unlike their predecessors, DEXs are run through pre-coded smart contracts, eliminating the middleman. Innovators have since leveled up the game by introducing gamified DEX ecosystems such as AdaSwap, a pioneer Cardano-built DEX.
The AdaSwap DEX features an automated market maker (AMM) platform, enabling Cardano users to swap native tokens. However, the most interesting feature is the AdaSwap NFT marketplace; it sets this DEX apart by introducing gamification. Apart from NFT trading, AdaSwap will launch its own NFT Graffiti series. Users will trade these digital collectibles on the AdaSwap app while accessing other DeFi opportunities on Cardano.
The AdaSwap ecosystem also includes a native governance token ASW that has already launched following two successful private seed sales. With this token, AdaSwap users can leverage other ecosystem incentives such as free transactions and staking opportunities designed to attract liquidity providers.
The metaverse is closely linked to NFTs, a concept that has taken the crypto community by a wave. So, what’s in it for the gaming industry? By definition, the metaverse is a futuristic iteration of the internet built on emerging technologies like blockchain and virtual reality (VR). People can replicate real-world activities on the metaverse and participate virtually in featured activities (games, metaverse conferences, or virtual tours).
As far as innovation goes, some of the popular metaverse platforms include The Sandbox and Decentraland. These virtual worlds comprise digital plots, now going for a dime; last year, virtual land sales totaled over $500 million; the figure is expected to double as more games are integrated with the existing metaverse ecosystems.
Besides the NFT-designed land parcels, metaverse platforms such as The Sandbox offer incentives for players participating in the virtual world. Players also can develop their games on The Sandbox metaverse, powered by the underlying smart contract infrastructure.
While the crypto market has existed for over a decade, users have only recently started reaping the benefits of decentralized applications (DApps). NFTs and the metaverse have been a huge factor in this adoption spike. It is no surprise that even big corporations like Adidas, CocaCola, and Samsung are gamifying their products by joining metaverse ecosystems. Going by these trends, the next era of crypto adoption will likely be marked by gaming incentives on DEXs and the NFT market.