The growth of NFTs has taken to the next level in terms of popularity and acceptance by both the crypto community and the general public. Non-fungible tokens (NFTs) that were initially considered a bubble are now extending their coverage through the cryptoverse.
According to a DappRadar report, the NFT market had its best year, generating more than $ 23 billion, with the floor market cap of the top 100 NFT collections rising to $ 16.7 billion as of December 17, even before the close. of the year.
The biggest movement for NFTs and the metaverse space was Facebook’s announcement to be renamed Meta on October 28 in an effort to expand its reach beyond social media and into the Metaverse. In fact, during the last week of October, it was revealed that over $ 106 million worth of Metaverse land had been sold in 7 days.
Within the cryptoverse, the NFT collectibles frenzy began in 2017 with the launch of the CryptoKitties game and subsequent demand for these digital cats. At its peak, blockchain gaming saw a peak of 140,000 daily users and 180,000 daily transactions in November 2017, but that traction quickly lost its way within months. Since then, the collectibles field has continued to have renowned collections like CryptoPunks, Bored Apes Yacht Club, and NBA Top Shots.
The initial interest in NFTs among the general public came from the digitization and tokenization of works of art by renowned artists like Beeple through auctions held by traditional art galleries like Christie’s. and Sotheby’s.
Since then, the reach of NFTs has widened to include art, music, games, sports, and Tweets – just about any digital or real asset – which can be tokenized while retaining their value. and by offering a unique property.
GameFi is a game changer
The decisive moment for the NFTs that have followed the Metaverse narrative comes via the GameFi protocols. GameFi is defined as the combination of gaming and decentralized finance (DeFi) within a single ecosystem. According to Huobi Research, the research arm of the cryptocurrency exchange, GameFi has rekindled interest in blockchain games.
The leading protocol in this regard in 2021 has been Axie Infinity, a game universe where players can collect Axies as pets in order to fight, raise, breed, and build kingdoms for their pets. The gaming ecosystem is powered by AXS and SLP, the ecosystem’s native tokens.
The Ethereum-based game was released in March 2018 and was developed by Vietnamese game developer Sky Mavis. Due to the hype that surrounded the game this year, the Axie Infinity Collection quickly became the most traded NFT collection ever in the short history of NFTs. The collection has recorded nearly $ 4 billion in all-time sales. Axie Infinity is one kilometer ahead of other blockchain games with the current volume of in-game trading.
The number of daily active users of the game rose from 20,000 users in March of this year to 2.5 million users in December of this year, marking a 125-fold increase in less than nine months – a remarkable achievement for a game that only got the hype this year. The game grossed $ 9.72 million in a single day in June, surpassing Tencent’s record held at the time. In the third quarter of 2021, gambling accounted for 19.5% of total NFT transaction volume during the same period and $ 2.08 billion of transaction volumes.
Although this game is based on Ethereum, blockchain-based games have spread across blockchain networks like Solana and the Binance Smart Chain. There have been several games that have gained popularity on blockchain networks like Splinterlands on Hive and Wax, Alien Worlds on Wax, Upland on EOS, and MOBOX based on the Binance Smart Chain.
The investment raised with the blockchain games domain has well exceeded $ 1 billion in 2021, led by the $ 930 million raised by games company Forte Labs.
Rejection of traditional games and regulations
Even though GameFi disrupted gaming with the introduction of blockchain technology, the mainstream gaming industry has not really received this innovation well. Steam / Valve banned all blockchain-based games from its platform earlier this year. In response, however, more than 26 companies and advocacy groups called on the company to overturn the ban.
Additionally, the South Korean government has now blocked the release of new play-to-earn (P2E) games and requested that existing blockchain games with a P2E model be removed from the Apple Store and Google Play Store. In contrast, Epic Games, the creator of Fortnite, said the company is open to blockchain-based games that support cryptocurrency and blockchain-based assets.
Even Elon Musk, the CEO of SpaceX and Tesla, recently said in an interview on Dec. 22 that he believes his company’s technology, Neuralink, is better than the Metaverse in the long run because he doesn’t see “someone. attaching a damn “screen to their face all day. Musk added, “In the long run, a sophisticated Neuralink could immerse you fully in virtual reality. I think we’re a long way from disappearing in the metaverse, it just seems a little out of fashion.
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Despite the decline of the traditional gaming industry and some regulators, GameFi has grown at an incredibly fast pace. The company behind the first Bitcoin-based ETF in the United States, ProShares, has announced plans to launch a Metaverse-focused ETF that will include companies like Apple, Meta, and Nvidia. The company has applied for an ETF with the United States Securities and Exchange Commission (SEC) under the name ProShares Metaverse Theme ETF, which will track the performance of the Solactive Metaverse Theme Index (SOMETAV).
Even one of the Big4 consulting firms, PricewaterhouseCoopers (PWC) Hong Kong, has dipped its toes into the metaverse. The company bought land in a Sandbox metaverse game. Even Italian luxury sports car maker Ferrari has hinted at NFTs after a deal with Swiss blockchain startup Velas Network.
Companies as such can use blockchain technology to build business models in the metaverse and achieve efficiency and cross-compatibility with the real world. If 2021 can be considered the year of DeFi and NFTs, it is almost certain that 2022 will be the year of GameFi and the Metaverse.