It is true that the blockchain and the crypto industry as a whole suffered a lot in 2022. When compared year on year, the figures dropped dramatically. But Gamefi is one part of blockchain technology that continues to get investment, traction, and a big jump in the number of unique wallets that are active. The upward trajectory for the blockchain gaming sector was witnessed in Q4 of 2022. Also, it stays the same in the first month of 2023, but the question is whether or not the hype and traction keep going in this direction. On the other hand, we think that Defi applications and projects will take a big hit and keep getting worse until 2023.
By the beginning of 2023, the blockchain gaming industry will have more than twice as many unique active wallets as Defi.
Blockchain Games Leading the Way
Blockchain gaming is a new area where people get paid for the time they spend playing video games. The rewards have a value in the real world and can’t be used, so they can be traded for money. So, the main difference between traditional gaming and blockchain gaming lies in the model of business. In developing countries, particularly in Southeast Asia, the blockchain gaming industry has grown rapidly. It is the business model of “play to earn” or “play and own” that stands out. This is a big part of why these games still do well even though the Defi industry is still having trouble.
Also, some of the best minds and developers in the industry continue to work together to make AAA blockchain games. The introduction of AAA games, along with strong collaborations between artists, influential figures, and game developers, will result in mass adoption. There is a lot of activity going on in blockchain gaming when we look at the number of unique active wallets. However, Defi failed to bounce back after some of the unfortunate incidents that happened last year.
Defi Domain Struggles to Bounce Back
The year 2022 was filled with ups and downs. The war in Ukraine, the Terra Luna Crash, the Ethereum Merge, and then the FTX Crash were all big events that had a big impact on the crypto and blockchain industries. There were many Defi apps that had to head toward the exit. The blockchain gaming industry, on the other hand, aided decentralized apps in gaining some positives.
If we analyze the events of 2022, the decentralized space saw a gradual decline. The Terra Luna event impacted the space heavily, and the rest was done by the FTX collapse. The total value locked in Defi dropped dramatically. At the start of 2022, the TVL was almost $150 billion, which took a nosedive after the events and stood at almost $40 billion. The Terra Luna Crash saw Defi, as well as UAWs, decrease considerably. But UAWs improved at the end of the year, while Defi continued to suffer.
As early as January 2022, careful speculation was made by DappRadar’s executive about Defi apps. The executive told BeInCrypto that as many as 80% of Defi apps could exit the industry if the bear trend continues throughout the year, which it did.
Blockchain Games and Rising UAWs
Blockchain games sure did see a bit of a decline after the Terra Luna crash, but they didn’t deviate much from their trend. It still accounts for an average of 1.15 million daily UAW, showing a lot of activity in the blockchain gaming space.
Dapp Radar’s Pedro Herrera said, “While [decentralized finance] and overall blockchain activity have been on the downside, the game of Unique Active Wallets (UAW) continues to rise, reaching almost 1 million daily wallets.”
When we compare the number of unique active wallets between Gamefi and Defi, gaming has more than twice as many as Defi. At the end of 2022, Defi had approximately 2.0 million UAWs, while Gaming had 5.0 million. Some of the top blockchain games that attracted new wallets in 2022 are: Splinterlands, which topped the chart with over 300,000 UAW over a week; Alien Worlds; Benji Bananas; Farmers World; Planet IX; Upland; and more.
Key takeaways DappRadar
- The dapp (decentralized application) industry experienced a 50% increase in unique active wallets (dUAW) in 2022, rising from an average of 1.58 million daily dUAW in 2021 to 2.37 million in 2022 on average. However, the industry has been on a downward trend due to various events, including the war in Ukraine, the collapse of Terra Luna and the FTX situation. Despite these challenges, the dapp industry has demonstrated its resilience and maturity, while adoption of blockchain technology by consumers and businesses suggests that the future of the industry is bright.
- In 2022, the DeFi industry faced challenges including the collapse of the Terra Luna platform and a decline in cryptocurrency prices, leading to a significant drop in the Total Value Locked (TVL) of 73.97% falling to $55 billion in December. Amidst these difficulties, the DeFi sector continued to expand and innovate, with smart contract financial apps and traditional financial institutions piloting or transacting using DeFi protocols.
- Ethereum remains the dominant DeFi protocol with $32.12 billion in TVL, a 74.56% reduction. BNB Chain has reclaimed its position as the second-largest DeFi ecosystem, with a 62.50% decrease, reaching $6.5 billion. Layer-2 solutions appeared to be the least affected by the crypto turbulence, with Arbitrum falling 12.07% to $1.74 billion. Optimism’s TVL increased by 127.60%, hitting $669 million.
- On-chain metrics for the NFT market this year seemed to be positive, as the NFT trading volume in 2022 increased by just 0.41% in comparison with 2021, with an average ETH price of $2,015. Looking further, the number of unique traders count increased by 876.89% compared to the previous year, reaching 10.6 million. The sales count is on the same upward trend, with an overall of 10.16% increase this year, reaching 68.35 million.
- The NFT blue-chip collections have remained the most traded collections this year, and continue focusing on their roadmap. Azuki became the first NFT brand to appear on an F1 racing car. VeeFriends closed a $50 million seed round in July, while PROOF’s Moonbirds raised another $50 million in August to scale the brand further.
- Yuga Labs continued to expand, acquiring CryptoPunks, Meebits and the NFT startup WENEW Labs. Its NFT collections dominated the NFT market cap in Q4, representing 55% of the top 100 most valuable NFT collections, which amount to $15 billion.
- This year saw the entry of new participants into the NFT marketplaces industry. X2Y2 climbed the charts, becoming in a year one of the top 10 NFT marketplace by trading volume, making more than $1.5 billion in trading volume. On the same trend, Blur, which was launched in October, reached in two months the last place in the top 10 NFT Marketplaces by trading volume, in 2022, with more than $205 million in trading volume. However, Opensea has not lost its dominance and, even if sales volumes have dropped in the past month, still accounted for 73.1% of the whole NFT organic trading volume.
- Blockchain games in 2022 account for 49% of all dapp activity, with on average 1.15 million daily unique active wallets, and 7.4 billion in transactions count. Splinterlands remains the most popular game with 217,914 monthly unique active wallets in 2022, an 85.78% growth. Alien Worlds was second with 178,118 monthly unique active wallets, down 3.67%.
- In 2022, there were 312 crypto attacks, resulting in losses of $48.74 billion, the highest for any year. The Terra Luna scandal was the most significant of these attacks, causing losses of $40 billion. Excluding this event, the median loss per hack was $283k and total losses per month were $728 million. Centralized platforms were the most commonly targeted, with losses totaling $44.71 billion. The BNB and ETH chains were the most hacked, with rug pulls being the most common type of attack.
- In 2022, there were significant developments in the regulatory landscape for cryptocurrencies and other digital assets, with the introduction of the first White House bill for crypto regulations and the MiCA regulation in Europe. These rules and laws aimed to establish a comprehensive framework for the regulation of cryptocurrencies and other digital assets, and demonstrated a recognition of the growing importance of blockchain technology.
However, the question remains if this trend will continue this year for blockchain games. With the number of AAA games under development and some launching this year, the trend may as well continue to ride the bull. Keep visiting us for more on blockchain gaming news, and check out game reviews on our YouTube. One of the most promising MMORPG AAA blockchain games under works is Mirandus.