Collins English Dictionary chose NFT as the Word of the Year in 2021. It is hardly a surprise: trading volumes of non-fungible tokens surged from $100 million in 2020 to $23 billion in 2021, according to DappRadar.
The fastest-growing sector of NFTs is blockchain games. This growth was catalysed by the massive inflow of users into GameFi — a new niche at the nexus of financial services and gaming in which a gamer gets opportunities to earn real money in-game. An opportunity that was not previously available, in comparison with the chance just to have a good time.
NFT games stand out from conventional online games because gamers are provided with opportunities to get rewards for completing gaming tasks and for selling gaming items and characters. The more time a user spends in a game, the higher the income. That is why this revolutionary model for the gaming industry has been dubbed Play-to-Earn.
It is no surprise that gaming enthusiasts started to turn out for gaming platforms. In the Philippines, where the economy took a big hit from the coronavirus pandemic, NFT games actually became a way for survival among impoverished people. The citizens of Philippine towns and villages bought and rented NFTs to enter the game 'Axie Infinity', and then started to earn upwards of $200 monthly from gaming.
First thousands, now millions of online gaming fans spend time on NFT gaming platforms as only playing the game itself can yield some profit in NFT games.
Users with experience in the world of cryptocurrencies and decentralisation quickly realised that the highest returns on investment will go to early birds who see the potential of the soon-to-be-popular blockchain game and invest in its tokens or NFTs.
But up to 2022, purchasing tokens of the NFT game was not an easy task. Having an intention was not enough, both for retail investors or an investor with billions. Now there are instruments that simplify and quicken the process of investing in NFT games.
Retail investors VS Venture funds — Which bird catches an early worm?
Regular users have several ways to earn money on the NFT game. Apart from playing a game, an investor can:
- Purchase gaming NFTs the price of which start at a couple of dollars and reach hundreds and tens of thousands after the inflow of users.
- Invest in the project that develops the blockchain game by purchasing its tokens. For example, 2000 tokens AXS of the game Axie Infinity during the public sale start at Binance Launchpad cost $200, and just in one year, the same tokens were valued at $250 000.
In theory, these ins are available for retail investors. In practice, the best deals are occupied by big investors and venture funds. They get access to early token sales of NFT games and to closed financial rounds.
For retail investors, the experience of purchasing tokens of NFT games is totally different. Not only do they have to first find a promising gaming project but they can only hope for a miracle to get allocation where their purchase request will have to win over thousands of the same ones.
For example, the debut AXS public sale by Axie Infinity held on Binance Launchpad in the form of a lottery. A chance to win the lottery ticket that gave a right to buy AXS tokens for $200 depended on how many BNB a participant had. Seven days before the token sale, Binance snapshotted users’ wallets. This snapshot served as a base to choose the lottery winners. Similar circles of hell await retail investors at other launchpads and IDOs.
This problem remained unnoticed over the last year since the NFT games sphere was still at the earliest stage of its development, although it was rapidly growing. By the end of 2021, it was evident that retail investors were disadvantaged by the current state of affairs. Decentralisation and P2E games were called upon to broaden the opportunities for the widest ranges of regular users. Yet the niche was once again occupied by big venture funds.
To solve this problem, projects such as Attarius Network started to appear. Attarius Network provides developers and gamers with a complete all-in-one ecosystem for creating, integrating and managing games and game assets. The project provides easy-to-go decentralized solutions for game developers and players - a new revolution in play-to-earn and NFT.
The project partnered with KILT Protocol initial developer BOTLabs GmbH. Among other partners: Harmony, Octopus NetworkHuman Guild, TwoFour54, ADgaming (blockhain gaming system from Abu Dhabi).
Another way to solve existing issues provide decentralised autonomous organisations that are governed by the community and build their activities with a goal to maximise benefits for all members.
One of such organisations Meta DAO Guild launches DAO Launchpad that aims to open the doors of venture investment to each and every user. DAO Launchpad is a sort of decentralised venture fund for investments in GameFi projects.
The participation in DAO Launchpad provides retail investors with opportunities to invest in the most promising GameFi projects at the earliest stages that were not accessible to them previously.
The governance over DAO Launchpad is in the hands of users, the fund participants. They choose promising gaming projects for investments by voting with the native tokens of the Meta DAO Guild project, MDGG.
NFT Games: Growth Trends
According to Ben Heidorn from the New York studio, Blockade Games will grow up to 100 million due to the distributions in African markets.
In those regions, high interest among consumers is apparent. Big investors are already there as well. The world’s leading venture funds like Andreessen Horowitz from the Silicon Valley multiplied their presence in the NFT sphere. While the media discussed digital art in the form of NFT and its perspectives, experienced investors inserted millions of dollars into startups that develop NFT games.
At the beginning of 2021, the investments ranged into millions, by the end of last year, the NFT games’ developers were attracting dozens and hundreds of million dollars per one round.
As Justin Kan, a cofounder of the video live streaming service Twitch that specialises in computer games, tweeted: “NFTs are a better business model for games… I think blockchain games will be the predominant business model in gaming in ten years”.