Are You Crypto Gaming in the Bear Market?

Let's talk about the state of crypto games
also referred to as web3 games. Blockchain games gamify play to earn games
in this current crypto winter. Delphi Digital quotes
the market cap of game fi At $6.15 billion on September 30th. While checking the top gaming tokens
on CoinMarketCap returns A valuation of $6.6
billion on November 18th. Regardless, there are only a handful
of gaming tokens in the top 100. So the crypto gaming sector, at least
those with tokens, has been suffering too. Things are looking better
as far as online activity is concerned. According to DappRadar, a full 40%
of all online activity comes from gaming In Q3 2022, which is more than double
the number that DEFI has. This is further amplified
by the CMC in Naavik Gaming Report, Which shows that the unique active wallets
or UAW, although currently stagnating, Is any slow upwards long term
trend broken down by blockchains. Most demand for games is on wax over
if we look at the supply of games. Most games are actually built on the BNB
chain, according to Binance Research. However, only
33% of crypto games are live, With many still in the development
beta or alpha stages and actually Looking further
into where players are actually playing. Most crypto games are unsurprisingly
on web browsers or mobile. Finally, the popular genres of crypto
games are action, Followed by some adventure collectibles
strategy and RPGs. But which games are players
actually playing? Yet again, it's
not easy to precisely define which games Are the most popular in, particularly
how many players are playing them. But Binance Research lists
the top five games With the most active users
in September of 2022. There is Gameta a web3 gaming platform
that brings Web2 games Into the blockchain. Alien Worlds,
a Metaverse Game Set in space. Benji Bananas a hyper casual mobile game
where players collect bananas. Solitaire Blitz a casual card game. Splinterland a card collection game. Gameta has seen a stellar rise
catapulting itself to the top spot

With almost 2 million unique,
active users in September. However,
the most popular games are not necessarily The most valuable ones, Although you can argue about
which of those are actually crypto games And which are metaverse and
whether those two aren't in fact the same. Here's the top five by market
capitalization we have The Otherside A metaverse by Yuga Labs,
the team behind Board Ape Yacht Club And Cryptopunks the Sandbox,
a popular metaverse game Which allows users to create
and play games. Decentraland a leading virtual world with
different districts and user owned plots. Axie. Infinity a play to earn pioneer
step in the move to earn pioneer. Interestingly,
the most played games are nowhere near The top five games by market cap
when it comes to valuations. Even though Metaverse is Are in the early stages of development
and have relatively lower active users, Trading volumes for Metaverse,
virtual land and NFTs are down over 90%. Even if some of the bubble has popped,
the market is still giving these projects Plenty of breathing space
considering their stage of development. But the two real games on this list, Axie
and STEPN , are worth a second look. Given how popular
they were at their peak of their powers. Axie Infinity experienced a meteoric rise. At its peak, The token was worth over $150,
and its market cap was over $10 billion. However, with the onset of the crypto
winter these days, access trades below $10 And at a much more modest market
cap of $900 million. Furthermore,
these CMC and Naavik Gaming Report Now posits
that the unsustainable play to earn model Is in demise, with games
moving to free to own or to model Daily unique active wallets for Axie
were down 86% in Q3 compared to Q2. Still, the team had its first
AxieCon conference this year Where they introduced their Land
Project Kingdoms gameplay Alongside other gaming features
like socializing, a token gameplay Delegations, non land owner,
gameplay dungeons and more.

Step in conquered the move to earn market
in a flash one step and created The move to earn marketing. But just like Axie, in this case,
the game is still popular, But the monthly active user count is down
significantly, and that may be due To the rise
of a formidable competitor in Sweatcoin. We cover the details of SweetCoin
previously, which has over 1.3 Million active users and over 1.5
million transactions thus far. Unsurprisingly,
the trend is down after the initial hype And SWEAT is suffering
from the same kind of selling Pressure of most gaming or fitness
tokens are suffering from. But it's probably not the last iteration
of Move to earn games that we've seen. The crypto games industry
in 2022 is projected To outperform the amount in 2021
by a solid 100%. Most of these investments are seed
rounds and pre-series, where crypto Gaming attracts
the most money out of any sector. And according to the block research, 35%
of seed rounds And pre-series investments
go to NFTs and gaming And that is almost triple
the amount that DeFi gets. Meanwhile, Delphi Digital shared A few noteworthy funding deals
in its September gaming insights overview. Metaverse Go, a web3 gaming platform
raised $4.2 million in a seed round. Revolving games raised $25 million across
two rounds to build Battlestar Galactica. Animoca brands raised $110 million,
bringing up its valuation to $5.5 billion. Hadean supported by EAA raised $30 million
to build a metaverse infrastructure Immortal game, raised $15.5
million to build each has focused game Featuring
NFT Vulcan Forged raise $8 million To expand its Web3 gaming platform
and build a metaverse game. GameFi’s Achilles Heel
Building a Sustainable Token Model. There's no two ways to go about this. Crypto games
definitely has not figured out The Tokenomics model
for sustainable games. Access is down more than 90%,
and so are all the guild tokens That promise to build an entire field
of employment around play to earn. But what's going wrong?

And why is it so difficult to build
a sustainable token model in a game? Well, Nate Eliason has a fantastic essay
on this called Crypto Gaming is Broken. How Do We Fix It? And if you're really interested in crypto Games, you should actually read
the entire piece for the lazy types. Here are Nate's arguments summarized. Number
one NFT set a bad precedent for games. NFTs are all about their floor price
and the number going up And that is the wrong frame for the games
to be in. Number two,
DeFi is set in a bad precedent for games. Gaming shouldn't be focused
on making a passive yield from staking. Number three,
most earnings are unsustainable. Many games actually have
poor economic designs where more Earnings increase earnings
and thus increase selling pressure. Number
four costs are actually too high for game Lifecycles, considering how long a game's
popularity last. At best, a few years. What?
Three games are ridiculously overpriced. Number five. Much of the work is bullshit. Play to earn is just clicking to actually Click a few useless buttons
without meaning or any fun involved. Number six and too much power
for people and capital versus time. If you can afford buying a valuable NFT, You can make your initial investment
back quickly. And this is unfair. Number seven to play to earn it
sets the wrong expectations for players. It shouldn't be play to earn,
but play and earn. But what about the possible solutions? While the block research suggests
that not all Web3 games Need to have a token to begin
with, for example, hyper casual games Think of Candy Crush
don't benefit from adding a token Because their only hook is to make players
come back to keep their streak. But without long term incentives,

The token will always be inflationary
and thus sold immediately. Nate also gives several suggestions
on how to fix Web3 gaming summarized Like this number one
significantly reduce the cost to entry. Regular games cost 60 to $80,
but web3 games have NFT collections Worth thousands. Number two Create limitations
on the power of new capital. Games
should actually have barriers for the rich To not have an unfair advantage
or starting advantage. Number three Prioritize rewarding play,
not clicking. Earnings should actually come From playing the game
and not just by clicking buttons to earn. Number four Get rid of Staking. Staking is a DeFi element
that has no place in games. Number five is build a fun game. Games should actually be fun, you know. Number six is separate the external
and internal economy as much as possible. Players should actually have
to check the price of the token To actually decide what to do in the game. Number seven obscure
the aura why earning mechanisms are fine, But they should not be predictable. Number eight Reframe expectations around
play and earn. Players
should actually expect to play first And then earn second,
not the other way around. Number nine is not limiting
play time based limitation Should not stop the players
from playing a fun game. Of course, there is a whole long tail
of design mechanisms like how many tokens To include and which tokens
sink to built into the game. But armed with these suggestions,
developers already have a long laundry List of things to improve efficiency
in Naavik Blockchain Gaming Report Also echoes
some of the most aforementioned points, Adding that the crypto gaming sector has
seen the transition from the unsustainable Play to earn model across
various stages to the free to own or To a model afterwards dramatically lowers
barriers to entry by offering NFTs For free and not getting game access
with sometimes absorb only high

NFT purchase prices. Naavik actually believes
that this could be an important catalyst In accelerating
the mass adoption of crypto games. So the old the crypto gaming is dead,
long live the new crypto gaming or Something like that. Gaming is still one of the most promising
verticals for blockchains To actually break into the mainstream. You'll models were nice to experiment with But were never going to work out
for the long run. And to be fair, a lot of new games do
look promising, but have a long way to go Before they can actually compete
with legacy games. Many traditional gamers
or gaming companies remain hostile to NFT And crypto gaming concept. They see it as a quick cash
grab by companies and a way of blockchain Encroaching on someone else's turf
without actually improving anything. And so far
they've actually been right about that. Still keep an eye on the gaming space
because it's not going anywhere Anytime soon.

Coinbase
OUR TAKE

Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

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