Crypto exchange Huobi’s research arm, Huobi Research, has identified a rising interest in blockchain gaming as a direct impact from GameFi initiatives. GameFi implies the use of decentralized finance (DeFi) and blockchain gaming that incentivizes users based on a play-to-earn model.
According to Huobi Research, on-chain data suggests that GameFi initiatives have seen a steep increase since June 2021, owing to a sizable reduction in transaction costs and improved user experience.
The research shows that popular blockchain games such as CryptoKitties recorded a maximum of 140,000 daily active users and 180,000 daily transactions back in November 2017 but lost over 90% user interaction within a few months:
“Early blockchain games suffered from defects such as singular models, simplistic entertainment and poor experiences in general.”
However, the blockchain gaming industry saw a comeback with integrating nonfungible tokens (NFT), DeFi and other play-to-earn elements. NFT-based pet game Axie Infinity made $9.72 million in a single day in June, surpassing Tencent’s record at the time.
“DApp rankings show that five of the top nine apps are GameFi apps. As of early December , GameFi’s weekly active users have reached 9.21 million, a record high.”
Based on the above findings, Huobi Research concluded that transaction costs are essential in new institutional economics. While the gaming industry had…