BGA Blockchain Game Report – Q1 2021

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State of the Blockchain Game Sector

The first three months of 2021 have been a time of building and expanding for many of the gaming projects currently on the market and the ones that are still in development. A wide variety of projects moved away from Ethereum to sidechains and layer-2 solutions like Polygon and Immutable X, while the Wax blockchain has strengthened its position as a platform for games using NFTs. Game developers are clearly working to pave the way for a bigger, more mainstream audience.


  1. Key takeaways
  2. Gaming audience grows 148%
  3. Ten times more gaming activity
  4. 651% more value in gaming
  5. The most active games in Q1 2021
  6. Games with the biggest growth in Q1 2021
  7. Games, updates and user growth
  8. The rise of play-to-earn gaming
  9. Different levels of participation
  10. Why games start to boom now
  11. Welcome to the metaverse
  12. Leveling up
  • Gaming activity increased 148% to 73,512 unique active wallets per day
  • Wax, Polygon, and BSC increased their market share 
  • Transaction volume increased tenfold to more than 51 million transactions in the last week of March
  • Total transaction value increased 651% to more than $1.1 million per day
  • Alien Worlds became the biggest blockchain game on the market in terms of daily active wallets
  • Play-to-earn gaming expanding through the rise of NFTs and different user categories

Gaming audience grows 148%

The growing trend of blockchain gaming can’t be seen separately from the hype surrounding NFTs as game builders increasingly turn to DeFi mechanics to stimulate users and player rewards. However, in gaming users transact smaller amounts of value. As a result, the Ethereum blockchain, with its $20 gas fees, is not very suitable for gaming. 

Despite these bad conditions for gaming, the Ethereum blockchain almost doubled its active wallet count from 1,274 in the first week of the year, to an average of 2,398 daily active wallets during the last seven days of March. The gaming segment has seen tremendous growth with an average of 73,512 active wallets per day in the last week of March. That’s a 148% increase from the average 29,563 active wallets in the first week of the year.

Source: DappRadar

This hype surrounding blockchain gaming shows a lot more strength on blockchain solutions that offer free transactions. EOS doubled its active wallets, mainly driven by the virtual-property game Upland, while Hive saw a small increase thanks to their hit game Splinterlands. In addition, the hyper-casual games on the Thundercore platform also doubled their user count.

However, real growth was seen on Binance Smart Chain, Polygon, and Wax. Gaming on Binance Smart Chain is still in its infancy but still grew from basically nothing to 1,238 daily active wallets. In comparison, it took Matic nine months and a name change to make a bit of an impact in the blockchain gaming segment. They are now called Polygon. 

Polygon increased its active wallets for gaming dapps by 734% to an average of 2,294 wallets per day, while Wax saw its daily active gaming wallets increase 502% to 23,095 daily active wallets. 

Source: DappRadar

Polygon, Wax, and to a lesser extent Binance Smart Chain and EOS are reaping the rewards from Ethereum’s gas fee problems. No gamer wants to deal with high gas fees, as a result, these four blockchain solutions have jumped in. 

Projects like F1 Delta Time, MegaCryptoPolis, and Aavegotchi started on Ethereum, but have now moved to Polygon. At the same time, Wax is growing its gaming portfolio while connecting its blockchain to the wider DeFi ecosystem on Ethereum. 

Binance Smart Chain did things the other way around. They first moved strongly into DeFi, and are now looking at the gaming segment. Gala Games, My Neighbor Alice and Alien Worlds are among the projects that have announced to integrate Binance Smart Chain into their ecosystem. 

Game developers that want to tap into Ethereum directly, clearly need to wait for proper layer-2 solutions. Immutable X and their zk-rollups could be a solution to this and in recent weeks a number of gaming and NFT projects announced to integrate Immutable X as their preferred scaling solution. Immutable X promises free minting and NFT transfers, while all data remains on the Ethereum blockchain.

Ten times more gaming activity

There are plenty of blockchain-powered games that work perfectly without interacting with the blockchain all the time. Axie Infinity would be a fine example of this, as players need three Axies to start playing and that’s it. From that point forward you only interact with the blockchain to claim SLP rewards. On the other hand, a game like Alien Worlds taps in the blockchain every time the player makes a change or activates the mining activity. As a result, Alien Worlds registers a lot more on-chain activity. 

Axie Infinity is now moving its ecosystem to a sidechain called Ronin, creating a much more user-friendly environment for players. At the same time, other blockchain solutions like EOS, WAX, Binance Smart Chain, and Polygon are seeing an increased amount of activity, powered by their free-to-use blockchain solutions.

In the first week, the blockchain gaming market was responsible for 5,1 million transactions. That number increased tenfold to 51,01 million transactions in the last week of March. 

Source: DappRadar Industry Overview

651% More value in gaming

With the increase in daily active wallets and rise in on-chain activity, it only makes sense to see an increase in transaction volumes. Each of these games on the blockchain is fueled by a thriving economy where players battle for resources, trade items, and earn rewards. 

In the first week of the year, the blockchain gaming industry recorded an average transaction volume of $147,327 per day. Over the course of three months that number increased 651% to $1,107,674 per day on average. 

Source: DappRadar

On March 12th the volume peaked at 3,7 million dollars. This would bring the total average for March to 1,6 million dollars in transaction volume, against 0,36 million in January. 

This value increase can’t be seen separately from the increased retail and investment interest in the blockchain space. Game tokens are mixing with the DeFi ecosystem, bringing in more value and interest. The token price of Axie Infinity (AXS), MegaCryptoPolis (MEGA), Gala Games (GALA), F1 Delta Time (REVV), The Sandbox (SAND), and Aavegotchi (GHST) have all seen tremendous growth in the past 3 months. 

Source: DappRadar / Coingecko

The most active games in Q1 2021

The most active games of the first quarter are measured based on the activity at the peak during the last 7 days of March 2021. We look at unique active wallets only, measuring on-chain activity, like for example placing a bid, making a transaction, or winning an item. Some games allow users to play the game without any blockchain interactions, which means we don’t see that user activity on the blockchain.

Games with biggest growth in Q1 2021

Another important measurement for the gaming segment is actual growth. When we compare the first week of the year with the last seven days of March, which games have seen the most growth in terms of their unique active wallets.

Games, updates and user growth


Aavegotchi currently has an average of 1,589 unique active wallets per day. In January and for the biggest part of February, the DeFi game was shackled by Ethereum gas fees. The moment the project launched on the Polygon sidechain, users were freed from gas fee issues. As a result, the project’s user number skyrocketed to more than 3,000 users, only to stabilize around 1,500 daily active wallets.

Source: DappRadar

Alien Worlds

Alien Worlds launched on the Wax blockchain in the third week of December 2020. The game allows players to mine TLM tokens. In February the growth stabilized until the developers announced the ability for landowners to issue NFTs as mining rewards, which caused some renewed interest from gamers seeking free rewards. There was another growth spurt when Alien Worlds announced a $2 million investment round by Animoca Brands and an expansion to Binance Smart Chain in the last week of March.

Source: DappRadar


Until the middle of February, gamers could stake their NFTs on the WAX blockchain to receive AETHER as a reward. On February 15th they could finally put their acquired AETHER to use, causing an upwards peak in user activity. Players now had the ability to use their AETHER to find materials, which in turn can be used to find rarer materials, and so on. In March the developers introduced several new NFTs that could improve the mining rate.

Source: DappRadar

With each of these games, there’s a correlation between the ability to earn something and the number of players active in that game. When a game introduces improved ways to earn new tokens or NFTs, there’s an influx of new players. This underlines the importance of the play-to-earn business model as a motivation for user participation.

The rise of play-to-earn gaming

One thing all these games have in common is the ability for players to generate value through in-game activities. In Aavegotchi players can take care of their little pixelated ghosts and compete in rarity farming competitions for valuable prizes, in Alien Worlds players need to mine TLM tokens, and in the fantasy football game Sorare, players compete for money and NFT prizes. Each of the products that attract the highest amounts of active wallets are games that utilize the play-to-earn business model. 

Because all these games tap into blockchain technology, players can earn tokens or NFTs as rewards. These have real value and gamers can trade these for something else as they wish. 

The ability to transfer in-game items between games plus being able to sell and exchange them is something that should resonate with modern gamers. This audience is arguably spending billions on games only to never receive any tangible rewards for their time spent.

The play-to-earn business model is based on the concept that every gamer is a contributor to a wider economy, and they should be rewarded for that. In most cases, players will need to make an initial investment to start earning. For example, in Sorare they need some cards, in Axie Infinity some Axies and Aavegotchi they’ll need a ghost. Projects like Alien Worlds and R-Planet have a low entry bar, but at the lowest levels, players have the smallest chance to hit the jackpot. 

To participate at a more profitable level, players can first acquire some NFTs. The cost of entry can range from $10 to $20 in Alien Worlds, all the way up to hundreds of dollars for Sorare.  

Different levels of participation

Not everybody is capable of investing hundreds of thousands of dollars into a virtual world of games. Depending on the project there will always be players with different levels of participation. Some will adventure, others will farm resources, while there are also landowners or traders. Ultimately the landowners will need the farmers, and when the NFTs to become a farmer get expensive a new business option rises. 

In Axie Infinity we’re seeing the rise of businesses that allow people who can’t afford to buy three Axies to join a so-called scholarship. Currently, the cheapest Axie on the Axie Infinity Marketplace costs $168, and players need three of those to start earning SLP tokens. Scholarships will introduce new players into the play-to-earn economy, allowing them to start earning through play while the scholarship provider generates a passive income.

Source: Axie Infinity Marketplace (April 7th, 2021)

Yield Guild Games (YGG) is one of those businesses where currently more than 2,500 people participate in a shared play-to-earn economy across a variety of games. Their efforts have proven successful for citizens of a variety of countries, as they raised $1.3 million in early March to expand their operation. This is a clear indication that the play-to-earn business model, which is so closely connected to both DeFi and NFTs, will have a fundamental impact on how people value gaming in general. 

Why games start to boom now

There’s a clear demand for blockchain games and virtual worlds. However, developing a game with a blockchain-powered economy in mind requires time. Developing a game takes years, not months. In addition, it has become a lot easier to start playing a blockchain-powered game. 

Not every game requires the hassle with wallets and private keys, creating those elements in the background while the user simply logs in with their email address. On top of that, there’s now a variety of blockchain options that offer an alternative to the expensive Ethereum blockchain. 

  • Better user experiences for onboarding
  • Improved user experience through cheaper blockchain alternatives
  • The quality of games is increasing
  • Developing games takes a long time
  • Alternative sources of income during the pandemic

It’s a mix of these five trends that help the blockchain gaming industry to grow. However, while we see traditional finance investing in DeFi and cryptocurrencies, the involvement of the traditional gaming industry in the blockchain gaming industry is still very minimal. 

Capcom issued some NFT collectibles on the Wax blockchain, Bandai Namco invested in Genies, while Ubisoft has launched a fantasy football game called OneShot League. It will probably take a while before we see Assassin’s Creed and Call of Duty tapping into the blockchain. 

First, the blockchain gaming industry needs to develop its own killer app, similar to how Angry Birds ignited confidence in mobile gaming more than a decade ago. That killer app could cause a paradigm shift in gaming, and that will bring a wave of interest into the metaverse as the next frontier for gaming and businesses. 

Welcome to the Metaverse

NFTs give us the ability to collect and truly own, trade, sell or share digital assets. These assets can be anything from art to music, and from a game item to digital fashion. We can buy these NFTs using cryptocurrencies, of which ownership is stored on the blockchain. Gaming is just one location where we can put digital assets to use, as we’re slowly unlocking the true potential of the metaverse. 

The metaverse is a virtual environment where people can socialize, conduct business, have fun or make an impact on the world through governance voting. Don’t think of the metaverse as one program or one virtual world, but think of it as an internet of virtual worlds where users can connect their wallets to interact with services. If you’ve read or seen Ready Player One, you get an idea of what the metaverse could be. 

Technologically we aren’t there yet. But a variety of organizations is working on creating open standards for the metaverse. CryptoAvatars is selling one-of-a-kind avatar NFTs that users can use as their virtual identity in the metaverse. Owners can use their avatars in different applications, ranging from VR Chat to Somnium Space and Webaverse. At the same time, The Fabricant and Digitalax are working on creating an open standard for digital fashion NFTs, while Crucible is creating an application layer for an open metaverse with tools for builders and creators, and portable digital identities for users. 

The recent interest in NFTs has also increased attention for the metaverse. According to Google Trends, the search term recently hit its all-time high in terms of popularity. Even though the search traffic pales in comparison with search terms like NFT, crypto, or blockchain. 

Source: Google Trends (April 7th, 2021)

Leveling up

In the coming month’s several alternatives, sidechains, and layer-2 solutions will rise to prominence. In early April Enjin is launching Jumpnet, a sidechain solution for its entire ecosystem. At the same time, Reality Gaming Group is working on Doctor Who: Worlds Apart, which is also running on its own private Ethereum sidechain. Together with Axie Infinity’s Ronin sidechain, these solutions offer the same things: cheaper and faster transactions. 

Immutable will introduce their Immutable X layer-2 solution for the trading card game Gods Unchained. After that, the technology will be implemented into more NFT projects and games. At the same time, we can expect Binance Smart Chain to make more moves in the gaming space, while Polygon will continue its stellar growth. 

The Wax blockchain already offers free and fast transactions. However, they are connecting their blockchain to Ethereum by tapping into their DeFi ecosystem. While their hit game Alien Worlds has put their eyes on Binance Smart Chain. It’s safe to say that game projects are looking for solutions because the answer to their problems is definitely not on the Ethereum mainnet.

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