Cryptocurrency

GameFi app rekindles interest in blockchain games: Huobi Research Institute

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Huobi Research, the research department of the cryptocurrency exchange Huobi, has determined that the growing interest in blockchain games is a direct impact of the GameFi project. GameFi means using decentralized finance (DeFi) and blockchain games to motivate users based on the game earning model.

According to data from Huobi Research Institute, on-chain data shows that since June 2021, GameFi plans have increased sharply due to a significant reduction in transaction costs and an improvement in user experience.

GameFi reduces transaction costs.Source: Huobi Research Institute

This Research It shows that popular blockchain games such as CryptoKitties recorded up to 140,000 daily active users and 180,000 daily transactions in November 2017, but lost more than 90% of user interaction within a few months:

“Early blockchain games have defects such as single model, simple entertainment, and poor experience.”

CryptoKitties daily active users and changes in transaction volume.Source: DappRadar, Huobi Research Institute

However, with the integration of non-fungible tokens (NFT), DeFi and other game earning elements, the blockchain game industry is making a comeback. The NFT-based pet game Axie Infinity had a single-day revenue of USD 9.72 million in June, surpassing Tencent’s record at the time.

“The DApp ranking shows that five of the top nine apps are GameFi apps. As of early December [2021], GameFi’s weekly active users have reached 9.21 million, a record high. “

Based on the above findings, Huobi Research Institute concluded that transaction costs are indispensable in the new institutional economics. Although the game industry has realized the function of playing games to make money, “society tends to choose the system with the lowest transaction cost to operate.”

The study also emphasized three basic aspects of GameFi different from other existing game models-free trading of game materials, free trading and pricing of game currency, and property rights protection. In addition, GameFi developers have the advantage of deploying private property rights at a lower cost through NFT:

“This is not only a comparative advantage that traditional game developers have never had, but it also reflects the inherent value of blockchain technology in the game industry.”