DappRadar x BGA Games Report #4 – Blockchain games continue to ascend despite collapsing markets

DappRadar x BGA Games Report #4 - Blockchain games continue to ascend despite collapsing markets
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Splinterlands still leads the way, as Otherside claims the virtual worlds throne

The crypto market is undergoing one of its most challenging periods amid the latest industry turmoil and an unfavorable macroeconomic situation. Despite the complex scenario that has seen even prominent altcoins lose up to 90% of their value, the game category has been a bright spot in the stormy period.

Game dapps registered an all-time high in activity with over 1.23 million daily Unique Active Wallets (UAW) interacting with blockchain games on average during April. The metric shows a 1% growth from the previous month despite the negative sentiment of the crypto market and an impressive 4,125% expansion from April 2021. 

Splinterlands, Alien Worlds, and Farmers World finish April as the most popular game dapps with over 100,000 daily UAW each. Moreover, investments keep piling up as the space has raised more than $4.5 billion this year, surpassing the amount of capital raised in 2021. At the same time, the rise of move-to-earn as a new Web3 paradigm adds a gamification element to routine activities.

Key takeaways

  • Despite the negative trend in the markets, blockchain games continue to perform well; all-time high in daily activity with 1.23M UAW interacting with blockchain games in April.
  • Splinterlands remains the leading blockchain game with an average of 350,000 daily UAW in April. 
  • Otherside became the most traded virtual world project to date with $723M in sales; the Yuga Labs metaverse project surpassed Decentraland and The Sandbox all-time trading volume in just two weeks.
  • Investments keep pouring into the space; $4.5 billion raised by blockchain games and infrastructure projects in 2022, surpassing the $4.1 billion raised last year.
  • The popularity of move-to-earn dapps is on the rise; the number of GST (STEPN’s utility token) unique holders grew 350% from the end of March.


Splinterlands records 200 days atop the game rankings

Splinterlands, the trading card game (TCG) running on the Hive blockchain, reaches seven straight months leading DappRadar’s game rankings. After launching in March 2021, Splinterlands is firmly established as the most popular blockchain game with over 350,000 daily UAW. That is 150,000 more daily UAW than the next game in line, Alien Worlds. 

Splinterlands is still going strong despite the current market crash. SPS, the project’s governance token, is traded for $0.07 at writing, losing 92% from October’s $0.90 price. Nonetheless, on-chain metrics show that the demand for the game is going strong. The number of daily UAW interacting with the game has grown 10% since February, while the game created almost 75 million transactions in April. 

Apart from the positive activity metrics, Splinterlands’ card market has remained active and has benefitted from the extra trading options on Wax, where these NFTs have generated over $6 million in all-time volume on the AtomicHub marketplace. Also, the in-game marketplace enables a renting system, one of the most intriguing aspects of blockchain games. 

In Splinterlands, the trading cards are NFTs that can be rented out to other players to improve their game strategy and thus, maximize their gains. Splinterlands market cap for the cards is estimated at $150 million.

Splinterlands has become one of the blockchain game referents. The TCG carries an entire ecosystem accounting for 97% of Hive’s activity, which is only partially matched by Ronin’s Axie Infinity and EOS’s Upland. Moreover, Splinterlands’ governance process will begin in the upcoming weeks. This phase will allow SPS holders to stake their tokens and vote in strategic decisions that will shape the future of the rising game’s community.

The World Asset Exchange, or Wax, is the leading blockchain in terms of gaming activity. Wax saw more than 375,000 daily UAW interact with any of its game dapps during April, driving 30% of the blockchain gaming activity. Two GameFi dapps are Wax’s main drivers – Alien Worlds and Farmers World, which attract over 100,000 daily UAW each, providing the carbon-neutral Proof-of-Stake (PoS) blockchain with a solid and established player base. 

Wax drives 30% of blockchain game activity

Alien Worlds, the space mining game dapp that rewards users with its native Trillium (TLM), leads the Wax gaming ecosystem. Last month, Alien Worlds attracted 192,000 daily UAW, lagging only Splinterlands in that metric. In perspective, Alien World’s run has been notable. The game’s daily activity has grown 2% from March this year and a stunning 1,370% from March 2021. 

Nonetheless, the hottest Wax game dapp of 2022 has been Farmers World. Besides Alien Worlds and Splinterlands, Wax’s Farmers World was the only game dapp to surpass 100,000 daily UAW in April.

Farmers World is a farming dapp where players harvest resources to enhance their in-game skills or sell them in a compatible marketplace. The GameFi dapp attracted 112,000 daily UAW on average in April, growing 12% from the previous month and almost doubling the amount of daily UAW since the end of 2021. Since mid-April, Farmers World has been outpacing Alien Worlds’ daily activity. In terms of NFT metrics, Farmers World is posting positive numbers, too, as the game’s NFTs have generated over $25 million in trades to complement the rising blockchain activity during 2022. 

In all, Wax boasts one of the top gaming blockchain ecosystems in the industry. The blockchain has proven to be more than capable of hosting games by processing up to 8,000 tps and has one of the most popular marketplaces in the Atomic Market. In fact, Atomic Market was the 9th largest marketplace by trading volume in April, with almost $14 million processed in 1.75 million trades. It is worth noting that Blockchain Brawlers, a play-to-earn dapp running on this chain, accounted for 45% of the marketplace’s monthly trading volume. 

Otherside changed the Virtual Worlds Status Quo

Yuga Labs, the team behind the popular NFT collection Bored Ape Yacht Club (BAYC), caused a stir in the crypto market once again with the drop of its virtual land Otherdeeds. The high demand for the coveted virtual plots congested the Ethereum network for hours, causing excessive gas fees that surpassed 2.5 ETH during the minting process and left 14,000 failed transactions worth $4.5 million that the team reimbursed over the last week. 

Despite the controversial drop, Otherside has shifted the status quo among virtual worlds, where Decentraland and The Sandbox were leading. In less than two weeks since minting, Otherside has generated over $700 million in trading volume, surpassing Decentraland ($508 million) and The Sandbox ($467 million) in all-time sales. In the same way, ApeCoin (APE), the native token of the BAYC ecosystem, has surpassed metaverse tokens like SAND, MANA, and AXS, becoming the largest metaverse token by market cap.

Otherside’s arrival presupposes a complete shift in the virtual worlds rankings. In April, the trading volume for virtual land NFTs was estimated at $60 million, 33% down from March. Lands in The Sandbox and NFT Worlds were the most traded with $14 million and $12 million, respectively. Decentraland and Metroverse, an Ethereum virtual world play-to-earn dapp, surpassed $5 million each. Otherside generated over 150,000 ETH ($420 million) in trades within the first hours of secondary market activity, outperforming the entire virtual real estate market by a tremendous margin.

Yuga Labs is looking to replicate its NFT success in the play-to-earn space. Even though projects like Decentraland, The Sandbox, and Enjin have been developing for years and have signed intriguing partnerships, Otherside will shift the entire virtual world market. This virtual world aims to become an ambitious interoperable play-to-earn metaverse platform fueled by APE and backed by Animoca Brands, a leading Web3 VC firm with vast gaming expertise that led a $450 million investment in Yuga last February. Also, it is worth noting that Yuga is taking 10% royalties on Otherside NFT trading, instead of the 5% associated with BAYC and child collections, giving Yuga more capital to invest into their virtual world project. Overall, Yuga Labs and its BAYC ecosystem are well positioned on the road to the metaverse.

$4.5 billion raised by blockchain games projects this year

Talking about investments, the amount of capital raised by blockchain games and infrastructure projects has already surpassed the total raised for 2021. In less than five months, VCs and other types of investors have poured a record $4.5 billion, surpassing already the $4.1 billion raised last year. The amount would reach $4.65 billion by considering Binance Labs and Animoca Brands’ $150 million investment to recoup Ronin’s bridge losses. However, the operation is not considered in the formula since the funds will not be used to enhance the gaming ecosystem but to help mitigate financial losses.

Notably, 37% of the capital raised has been invested in infrastructure-type projects like Immutable X (IMX), a leading Ethereum Layer-2 solution or the recent $725 million investment in the Flow blockchain announced this week by Dapper Labs. 

The increasing interest of VCs in the space has been noticed in previous reports. At this rate, investments will probably surpass $10 billion for the year, giving metaverse and game projects an ideal amount of capital to keep enhancing their products and building the industry’s future. Even though the bearish outlook of the crypto space might reduce the investment appetite in the short term.

The rise of move-to-earn

One of the most noticeable trends in the dapp industry over the last weeks is the rise of move-to-earn as a blockchain game paradigm. Move to earn dapps allow users to earn rewards in crypto for completing certain levels of daily physical activity. The gamification element in move-to-earn dapps serves as a bridge between routine activities and a way to monetize them via crypto. The concept was first introduced by Genopets in the summer of last year. However, STEPN, a Solana based dapp, is drawing most of the headlines. 

STEPN defines itself as a lifestyle dapp with GameFi elements that allow users to earn GST (Green Satoshi Tokens) by walking, jogging, or running. GST supply is unlimited, although the dapp’s tokenomics are well designed (plenty of burn mechanisms) to ensure the project’s long-term sustainability. To play and earn GST, runners must acquire an NFT sneaker to enable the gamification element that tracks physical activity through the GPS in mobile apps. GST can be swapped or used to level up the NFT sneaker. 

At the time of writing, there are over 380,000 GST unique holders, 350% more than from the end of March, showing the project’s rapid growth. Furthermore, STEPN sneakers have amassed over 38,300 SOL or $3.5 million in lifetime trades and will soon be available for rent, adding another monetization layer. 

Source: Solscan

STEPN is just one of many dapps to venture into the rising move-to-earn movement. Fitfi, Genopets, Dustland, Dotmoovs, Olive X, and a few other dapps are also pioneering the trend. Even though Stepn is currently the leading move-to-earn dapp, it remains one of the steepest entry-level barriers in the entire blockchain game industry (around $780 for an NFT sneaker at SOL’s current prices). 

Polygon established as a gaming network with over 100,000 daily blockchain players

Polygon fosters one of the rising blockchain gaming ecosystems in the industry. The Ethereum sidechain is just one of four blockchains that surpassed 100,000 daily gaming UAW in April. In fact, Polygon game dapps attracted 134,000 daily UAW last month, 23% less than in March but still 30% higher than February.

Polygon’s strength relies on the diverse game offering, where five Polygon-based games cracked the top 20 most played blockchain games in April. Pegaxy, the horse racing and breeding play-to-earn dapp, leads Polygon’s most played games with more than 30,000 daily UAW, 25% more than in March. The game presents a clear representation of play-to-earn by allowing players to earn tokens by playing, using them to enhance their Pegas NFTs, or trade them for another token, but most importantly, Pegaxy’s marketplace allows players to rent their Pegas, creating an economy that has shown self-sustainable potential since launching in January of this year. 

Besides Pegaxy, Polygon has a deep and diverse gaming ecosystem. The second iteration of the now-defunct GameFi dapp Sunflower Farmers, Sunflower Land attracted more than 150,000 UAW in April and 27,000 daily UAW, putting away all the concerns about the game’s original release. Sunflower Land launched its Beta version successfully two months after suffering an exploit that forced developers to shut down the game. 

Aavegotchi is another Polygon game with visible user growth in recent weeks. The activity inside the Gotchiverse, Aavegotchi’s virtual world, spiked 1,900% month-over-month after the launch of this metaverse platform on March 31. The pixelated ghost GameFi dapp attracted over 70,000 UAW in April as the game introduced new game mechanics and a new set of resources to be farmed inside the virtual world. These resources will allow players to enhance their in-game items and skills and decorate and customize land plots in the Gotchiverse.

On the other hand, tower defense play-to-earn dapp Crazy Defense Heroes suffers a significant 71% collapse in its blockchain activity. In April, CDH attracted almost 40,000 daily UAW on average, compared to the 135,000 registered during March. CDH’s April on-chain activity moves back to the levels seen in January when the game dapp attracted 41,000 daily UAW. It remains to be seen whether the Animoca Brands’ Tower Experiment can regain the growth levels flashed in February and March, although the engagement level sends a positive signal despite the TOWER token losing 92% of its value since November 2021.

Polygon has become one of the most important actors in blockchain games and the metaverse scenes. Apart from the flourishing gaming ecosystem, Polygon has just announced a collaboration with Meta, potentially for their Instagram NFT integration.

Sky Mavis commences road to recovery

The last weeks for the once leading gaming dapp have been all about recovery. On March 31, a hacker was able to exploit the Ronin’s Bridge, a platform that enables cross-chain asset transactions between Ethereum and the Ronin sidechain, stealing over $600 million in ETH and USDC, making it one of the largest crypto attacks in history.

Axie’s blockchain activity was already on decline after Sky Mavis announced the economic adjustments to the game’s earning ratios with the objective to help SLP sustainability in the long run. Still, Axie’s on-chain activity decreased 16% from March and has fallen 67% since the start of the year. At writing, Axie is the 15th most played game measured by daily unique interactions with over 18,000 daily UAW. 

Even though Sky Mavis has gone through brighter periods, the road to recovery has already begun. To recoup the losses of the bridge attack, Binance Labs, Animoca Brands, and other investors raised $150 million. In addition, Sky Mavis announced a $1 million bug bounty program to help robust the security aspects of their ecosystem.  

As for Axie Infinity, the game has relevant milestones on the horizon. The last “Classic” season is currently underway, paving the way for the next generation of Axie battles: Origin. Origin will bring new playing mechanics and new earning ratios that look to strengthen the ecosystem’s long-term sustainability. Also, the team has revealed their progress in respect to land staking in Lunacia, an important feature of the Axie ecosystem that looks to improve the project’s long-term outlook, which starts by increasing the ownership of AXS in the short term. 

Will Immutable-X breakout this year?

The Otherside drop showed us once again the need for a scaling and cost optimal solution, a situation even more important when talking about blockchain games. One of these scaling solutions is IMX, an Ethereum L2 network that allows users to transact basically gas free while still inheriting Ethereum secure infrastructure.

The activity on IMX has increased significantly this year. During Q1 2022, IMX produced 109% more transactions than in the entire 2021. Games like Gods Unchained have experienced a rise in their blockchain activity with the release of the Mortal Judgment card expansion propelling the game past 1,000 daily UAW on average during this year. In the last 30 days, the TCG has attracted almost 15,000 UAW. 

Source: Immutable-X

Besides Gods Unchained, NFT marketplace Token Trove and play-to-earn dapp Guilds of Guardians are also enjoying a positive streak. From an NFT perspective Book Games, an NFT collection part of the Vee Friends ecosystem led by Gary Vee generated almost $8 million in trading volume in April. 

As previously mentioned, IMX raised $200 million in March, giving the team capital to scale their solution further and also strengthen their infrastructure. In addition, Illuvium, one of the most anticipated blockchain games, opened its closed Beta to a handful of players and will host its first land sale in June, hinting that the project might see the light during this year. 

IMX is well-positioned as another scaling solution that may become a gaming juggernaut years from now. Apart from Gods Unchained, Guild of Guardians, Book Games, and Illuvium, the network will be home to Ember Sword, another expected MMORPG play-to-earn game.

Closing and road ahead

The crypto market is undergoing a severe downwards trend that has sent the price of most crypto tokens to all-time low levels. Nonetheless, even amid the negative sentiment that surrounds the markets, blockchain games continue to perform positively. The activity in game dapps reached an all-time high in April with 1.23 million daily UAW, while the investments from VCs and private investors reached $4.5 billion, surpassing the total investments raised in 2021.

In the same way, it is positive to see Splinterlands, Alien Worlds and Farmer Worlds established as the top three most played games, and still retaining their player base, one of the most important indicators for games that signals growth potential. 

To be fair, blockchain gaming is one of the most exciting categories in the industry. The upcoming Yuga Labs play-to-earn virtual world has altered the Web3 metaverse narrative completely, while the rise of move-to-earn dapps might bring the next important adoption wave. While cryptocurrencies collapse, blockchain games will keep building. 

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