GameFi Overview

According to Newzoo’s 2021 Global Gaming Market Report, the number of global gamers grew by 5.3% from 2020 to 2021, and now exceeds 3 billion. In the same year, total global gaming revenue grew 1.4% year-over-year to 2021 and currently stands at $180.3 billion. In addition, GlobalData researchers have predicted that gaming industry revenue will reach $300 billion by 2025.

For years, game players have paid the tech giants of a $180 billion industry - Sony, Nintendo, Tencent, Microsoft a fortune to play their games. However, they do not own their gaming assets, or in-game items like equipment, weapons, artifacts, and often see their hard work vanish into nothing once the game is over. Consequently, those virtual items have no real value other than being used for entertainment purposes. This is exactly the problem that a new economic model Play-to-Earn (P2E) on which all GameFi projects are based, is solving.

GameFi is the combination of three important parts of blockchain technology – decentralised finance (DeFi), non-fungible tokens (NFT), and blockchain-based games. It is essentially the gamification of different parts of the market creating ways for gamers to get rewards that can either be monetised or stored. What makes GameFi truly special, is the potential of financial freedom. Instead of gaming and letting the game developers take all your earnings, blockchain incentivises users by paying them for their time and effort through Tokens and NFTs, which give the financial power back to the users, giving them more reason to continue playing the game and attracting new joiners to the decentralised world.

Gamers in some countries are actually making a living off of play-to-earn games these days. For instance, Filipino gamers made serious profits from playing the Axie Infinity game during the Pandemic, earning above the minimum wage of the Philippines in 2021. Even gamers who are playing just for fun are making back money when their gaming NFTs see a rise in floor price.

According to Footprint Analytics, the number of GameFi projects began to soar after July, exceeding 1,000 as of 24th February 2022, with Ethereum accounting for 36.63%, followed by BSC 31.1%, and other blockchains accounting for less than 10%.

The top 10 GameFi projects in terms of volume, according to Footprint analytic, were:

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