GameFi apps have rekindled interest in blockchain games: Huobi Research

The research arm of the Huobi crypto exchange, Huobi Research, has identified a growing interest in blockchain games as a direct impact o...


The research arm of the Huobi crypto exchange, Huobi Research, has identified a growing interest in blockchain games as a direct impact of GameFi initiatives. GameFi involves the use of decentralized finance (DeFi) and blockchain gaming which entices users based on a game model to win.

On-chain data suggests, according to Huobi Research, that GameFi initiatives have seen a big increase since June 2021, due to a dramatic reduction in transaction costs and a better user experience.

Ways GameFi Reduces Transaction Fees. Source: Huobi Research

the to research shows that popular blockchain games such as CryptoKitties registered a peak of 140,000 daily active users and 180,000 daily transactions in November 2017, but lost over 90% user interaction in just a few months:

“Early blockchain games suffered from flaws such as singular designs, simplistic entertainment, and bad experiences in general.”

Changes in daily active CryptoKitties users and trading volume. Source: DappRadar, Huobi Research

However, the blockchain gaming industry has seen a comeback with the integration of non-fungible tokens (NFTs), DeFi, and other game-winning elements. NFT-based pet game Axie Infinity grossed $ 9.72 million in a single day in June, breaking Tencent’s record at the time.

“The DApp ranking shows that five of the top nine apps are GameFi apps. From the beginning of December [2021], GameFi’s weekly active users reached a record 9.21 million.

Based on the above results, Huobi Research concluded that transaction costs are essential in the new institutional economy. While the gaming industry had previously implemented game-winning features, “the company tends to choose the system with the lowest transaction costs to work.”

The research also highlights three fundamental aspects of the difference between GameFi and other existing gaming models: the free trade of gaming materials, the free trade and pricing of game currencies, and the protection of property rights. In addition, GameFi developers have the advantage of deploying private property rights through NFTs at a lower cost:

“This is not only a comparative advantage that mainstream game developers have never had, but also reflects the intrinsic value of blockchain technology in the gaming industry.”