The phrases GameFi 1.0, 2.0, and three.0 discuss with the iteration of GameFi titles as they transfer from earliest and least sustainable to extra subtle because the business evolves.

While tokenomics of various tasks are a major issue (e.g., the variety of cash throughout the sport), others, like funding and sport high quality, are additionally essential.

This report will spotlight the constructive developments and shortcomings of GameFi 1.0 to suggest what a future GameFi 3.0 would possibly look like.

It’s been greater than a yr since GameFi took off, and from a speedy upward climb in person numbers within the final quarter of 2021, it started to taper in early 2022, with a noticeable drop in February.

With the worldwide base of three billion avid gamers failing to flock to Web3 and the quick lifespan of most GameFi tasks, it’s essential to ask how this business can turn out to be extra sustainable going ahead.

Three Findings in GameFi Development

Projects that develop quick often sacrifice high quality

GameFi is a combined bag, and there’s no scarcity of fork tasks hoping to make a straightforward buck. Between 70% and 80% of GameFi tasks available in the market usually are not energetic, with a median of 200 customers per day for five consecutive days. Even although 80% or extra of the tasks launched in 2022 had been energetic inside 30 days of launch, the info signifies they’re failing to final lengthy.

Footprint Analytics - Days from Project Launch to Active
Footprint Analytics – Days from Project Launch to Active

Most tasks fail to stay energetic

Data exhibits that 60% of tasks die inside 30 days of being energetic, and few tasks have been energetic for greater than three months since final November.

Footprint Analytics - Days from Project  Active Launch to Inactive
Footprint Analytics – Days from Project  Active Launch to Inactive

Most video games go from launch to energetic rapidly however don’t keep energetic for lengthy.

Chains differ of their growth paths

The chart beneath exhibits how rapidly tasks attain energetic standing after launch. The X axis is the variety of days a challenge takes from launch to energetic standing, the Y axis is the variety of days spent in energetic standing, and the bubble measurement is the whole variety of customers.

With Splinterlands, HIVE stands out from the remainder, because it has been energetic since its launch and remains to be going sturdy, making it the bigger yellow bubble within the prime left nook.

Footprint Analytics - Project Lifecycle Layout
Footprint Analytics – Project Lifecycle Layout

Ethereum just isn’t GameFi-friendly when it comes to fuel charges and transaction effectivity, which makes it lower than superb for the GameFi area. Many tasks have lengthy preliminary climbing intervals, quick energetic time, and low complete customers. But it has a robust basis, and perhaps after fixing these issues, extra high quality video games will come on-line to present it a broader market share in GameFi.

On the opposite hand, BNB’s tasks usually tend to get away rapidly, have a medium length, and carry out comparatively properly when it comes to person numbers. Polygon is average, and ThunderCore exhibits a surprisingly lengthy length of exercise.

Footprint Analytics - Project Lifecycle Layout (Zoom in)
Footprint Analytics – Project Lifecycle Layout (Zoom in)

In addition to the bear market, GameFi’s structural issues have contributed to the present state of affairs. This report will try to uncover the causes of those issues and discover the doable future of GameFi.

Structural points with the GameFi 1.0

The Death Spiral in GameFi 1.0

GameFi 1.0, a class wherein Axie Infinity was dominant for a very long time, revolves round Play-to-Earn.

Despite variations in gameplay (e.g. staking, tower passing PVE, card battling PVP) or tokenomics (single token, twin token, token + NFT, token-standard, and so on.), these early titles are all Ponzi-like. They rely excessively on a gradual stream of incoming funds in an “external circulation” mannequin.

In this mannequin, previous gamers reinvest with the funds invested by new gamers, and new gamers preserve paying curiosity and short-term returns to previous gamers to create the phantasm that previous gamers are getting cash.

All the tokens minted by previous gamers have to be consumed by new gamers, or in any other case, gamers will preserve promoting, inflicting the token circulation pool to have solely sellers and no patrons. In this case, the token worth will enter a demise spiral.

 External circulation model
External circulation mannequin

As seen from Footprint Analytics information, after regular development from July to September 2021 and an explosive interval from October to November, incoming funds throughout the sector started to decelerate because of the common setting and the affect of particular person tasks.

Under such circumstances, the exterior circulation mannequin of GameFi 1.0 rapidly turned problematic, as out-of-game funds can not meet the fixed demand for in-game funds to generate curiosity, thus regularly reworking the constructive spiral right into a demise spiral.

Footprint Analytics - GameFi Token MarketCap
Footprint Analytics – GameFi Token MarketCap

Thus, most GameFi 1.0 tasks had, or will have, just one cycle, and as soon as the demise spiral begins, they can’t be revived. Different models, groups, backgrounds, operations, and environments affect the general challenge all through the method and might produce a wide range of cycle patterns.

The chilly GameFi winter was as a lot brought on by the business’s Ponzi-like character because the macroeconomic setting. The development charge of the general capital growth of tokens has not saved up with the demand for capital income throughout the video games, creating an inevitable bubble burst.

New Innovations

Some tasks started to innovate with financial models and noticed a burst of constructive exercise from February to March regardless of the poor setting.

Crabada on Avalanche and StarSharks on BSC are essentially the most outstanding amongst them. StarSharks used its assist from Binance within the early stage to maintain its reputation excessive, with “Genesis Mystery Boxes”—an in-game NFT—having a excessive worth even earlier than the sport was launched.

Unluckily, the sport’s launch coincided with the GameFi winter. Therefore, StarSharks had few gamers within the early phases.

However, StarSharks’ backing, financial mannequin, and sport high quality—in addition to its energetic group—allowed it to develop steadily all through Q1. It started to say no regularly after peaking in April.

Footprint Analytics - StarSharks Monthly New Users & Active Users
Footprint Analytics – StarSharks Monthly New Users & Active Users

III. Tokenomics of GameFi 1.0 tasks

Tokenomics can decide the life cycle of a challenge, as could be seen by taking a look at a number of completely different video games.

Axie Infinity

Axie Infinity, because the originator of P2E, had unmatched sources and a participant group originally of the bull market. Therefore, it was in a position to keep just a few months of upswing with solely the essential twin token mannequin and breeding system. However, it confronted a gradual decline afterwards but nonetheless retains some loyal customers.

Footprint Analytics - Axie Users & AXS Token Price
Footprint Analytics – Axie Users & AXS Token Price


BinaryX attracted many customers within the early phases as a result of it paid out quite a lot of APY and returned to early gamers in a short time.Now it has an inflation drawback with its tokens. Once there’s not sufficient income, it will instantly enter the damaging suggestions part and the variety of customers will drop quickly.

However, with the change and the challenge’s management over BNX, the value of the token has rebounded, however there are nonetheless only a few customers.

Footprint Analytics - Binary Users & BNX Token Price
Footprint Analytics – Binary Users & BNX Token Price


The single token mannequin of CryptoMines is pure Ponzi, and its lifecycle form is consultant of most degen tasks.

In the early stage of the challenge, with a really quick payback cycle to draw numerous funds, customers and market cap will have an enormous pull up. When the bubble blows to the essential level of market capital and feelings rapidly burst, the upper it rises the sooner it falls.

Footprint Analytics - CryptoMines Users & ETERNAL Token Price
Footprint Analytics – CryptoMines Users & ETERNAL Token Price

While the financial models, working models, and life types of the tasks fluctuate, each the blue-chip Axie Infinity, the degen CryptoMines, and the meta-universe idea The Sandbox all confronted bother in December 2021.

Footprint Analytics - MC of Axie & The Sandbox
Footprint Analytics – MC of Axie & The Sandbox


Based on the expertise of the previous above, StarSharks’ additionally makes use of the basic twin token mannequin, with SEA as the principle output and SSS because the governing token. This has allowed it to create a small increase within the winter, and its mannequin deserves to be explored much more.

In order to stop the demise spiral brought on by infinite inflation of the in-game token SEA like different twin token models, StarSharks turns the requirement to enter the sport into consuming SEA to purchase a blind field, thus shifting the strain from token dumping to the NFT pool. So SEA takes the grasp management impact, and 90% of the consumed tokens are straight burnt, so the circulation of tokens is even much less.

The governing token SSS is especially the empowerment of staking dividends, and its output just isn’t a lot within the case of its common empowerment function.

StarSharks Economic Models
StarSharks Economic Models

From Footprint Analytics, the variety of energetic customers has been rising evenly from January to March, indicating that the variety of SEAs consumed on the time additionally elevated equally.

However, from the start of March, the value of SEA began to development downward, reflecting the buildup of a number of months. The variety of SEA minted within the sport exhibits an accelerating development, and the output is bigger than the consumption, highlighted by the value decline.

As it turned out, StarSharks lit the fuse originally of April when the variety of customers started to fall off a cliff after the cancellation of each day duties and the rental market. So for the GameFi challenge, mannequin evaluation and information monitoring can provide some indication of the cycle the challenge is in.

Footprint Analytics - StarSharks Token Price vs Active Users
Footprint Analytics – StarSharks Token Price vs Active Users

StarSharks couldn’t escape the demise spiral, and the sport’s strengths and weaknesses can educate the GameFi area a number of classes.


    • GameFi quantity remains to be small, just a few hundred energetic customers can revitalize the challenge within the early phases.
    • The challenge mixed with the background narrative, which added to gamers’ expectations for the GameFi challenge in March to April, and gained the curiosity and belief of numerous customers.
    • The staff efficiently seized the turning level of the 2 intervals and adjusted the return cycle of short-term play-to-earn to the secure income, with the upkeep of the group and huge customers, to stabilize the unfold of the wealth creation impact.


      • Although the life cycle has been lengthened, it didn’t change the general construction.
      • The rhythm of the next new updates didn’t sustain in time, ensuing within the exodus of some worthwhile customers and destroying the stability.

IV. What are the probabilities for GameFi’s future?

While everybody was anticipating it, GameFi 1.0, which formally entered the second half of the yr, didn’t appear to have too vivid a efficiency in Q2. No matter from the variety of video games or the general sport capital, all of them present a gradual decline.

Footprint Analytics - Monthly Number of New Projects
Footprint Analytics – Monthly Number of New Projects

So, what sort of mannequin can enable GameFi to develop within the future?

High-quality AAA video games

3A video games discuss with video games with excessive growth prices and high quality. There isn’t any goal standards for 3A, so within the GameFi area, video games are typically rated primarily based on the power, background, the imaginative and prescient of the challenge and the sport demo. Currently, acknowledged 3A video games embody BigTime, Illuvium, StarTerra, Sidus, Shrapnel, and Phantom Galaxies.

These 3A video games have the apparent benefit of usually gaining big consideration early within the challenge, however there are nonetheless varied points that gamers criticize.

  • The growth course of is simply too gradual.
  • Content and movie high quality are solely barely higher than Web3, removed from the extent of conventional video games.
  • IDO and INO usually are not sufficient to empower sport belongings.
  • Roadmap is ambiguous or not absolutely applied.

Some of the tasks which have issued tokens have adopted the general GameFi market downhill within the first half of the yr.

Footprint Analytics - Monthly Number of New Projects
Footprint Analytics – Monthly Number of New Projects
BigTime often hosts parties or competitions within the game
BigTime usually hosts events or competitions throughout the sport
Illuvium was still able to sell all of its 2W lands in a very short time at the beginning of June
Illuvium was nonetheless in a position to promote all of its 2W lands in a really quick time originally of June

In the future, there will be a time when 3A video games will blossom, with MOBA, RPG, SLG creating completely different scenes and completely different content material in accordance with their very own positioning. Instead of pondering an excessive amount of about P2E, the sport will use fascinating gameplay and content material to draw customers to expertise the sport and benefit from the distinctive options enabled by blockchain. Maybe customers have to attend for some time, perhaps subsequent yr Q2, Q3, and even longer, however that is the route of the market.

Narrative-based X2E merchandise

StepN launched the Move-to-Earn development. It has additionally created the “X2E” subcategory, which encompasses varied actions that is perhaps compensated through video games’ tokenomic models. E.g., Learn-to-Earn, Sleep-to-Earn, Watch-to-Earn, and Sing-to-Earn.

As seen by Footprint Analytics, whereas different models of X2E are nonetheless within the early conceptual phases, M2E’s StepN led the wave in May, and different imitators are popping up in every single place.

Footprint Analytics - X-to-earn Token Price
Footprint Analytics – X-to-earn Token Price

However, aside from Genopets, which is a sport within the mode of Pokémon, different X2E tasks akin to StepN, SNKRZ, Melody, FitR are extra like Web3 merchandise with profit-making attributes, so this piece must focus extra on the social attributes dropped at customers.

As an enormous meta-universe scene, SocialFi can be all the time what gamers are searching for. An enormous world chat, leaderboard comparability, sport exercise competitors, and guild battle content material can all give gamers significant experiences exterior of incomes.

An evolving finance mannequin

Most blockchain video games nonetheless revolve round P2E, and the twin token mannequin is essentially the most secure, confirmed system accessible. Therefore, the future GameFi mannequin can nonetheless use this mannequin, however it additionally requires a DAO vault and an NFT market.

It is essential to notice that the NFT market should be the challenge’s personal, in order that at the least tax income is the principle supply of revenue for the challenge at this stage, fairly than relying solely on the cash of late-entry gamers.

Since NFTs will be an integral a part of GameFi, challenge house owners can attempt to make NFT props the principle output of the sport, whether or not it’s ERC-721, ERC-1155 or a brand new evolvable protocol like EIP-3664.

The second most essential factor is the framework design of the sport mannequin, which is said to the sustainability of the challenge. A easy cycle of token and NFT between enhancing character attributes like GameFi 1.0 could be too skinny. This mannequin is extra like a Ponzi framework, the place the late-entry cash retains contributing to the front-entry cash, and the challenge developer throws the token strain to the NFT, which will fall right into a demise spiral when the NFT pool overflows.

W-labs GameFi economic model design ideas
W-labs GameFi financial mannequin design concepts

Enriching the sport’s ecosystem and increasing its lifecycle requires extra extensions to the unique mannequin each horizontally and vertically. When the ability of the sport’s personal inner circulation is giant sufficient, it will generate the centrifugal drive that may eliminate the inertia of being caught within the demise spiral.

Horizontal extensions

Horizontal extensions embody including token and NFT output and consumption eventualities. For instance, setting the gear life mechanism and restore standards; or stratifying the free and P2E gamers to set completely different sport play kinds.

Vertical Extensions

Vertical extension could be break up into 2 buildings: upward and downward. The upward extension is used to unravel the issue that gamers have too few roles to select from. 99% of gamers depend on the only mode of minting and taking part in to make earnings, so extra eventualities could be added. For instance, add superior dungeons, PVE, PVP, and these eventualities must be differentiated to present extra empowerment by advantages and consensus.

The downward extension is completely different from the upward extension, which lengthens the life cycle by considerably rising the variety of props and gameplay. Such as rising the items of props, gems and thus rising the enchanting, melting perform, downward framework can draw loads from the normal sport play.


GameFi 1.0 has gone by a cycle that confirms that Web2 and Web3 gamers nonetheless have very completely different attributes. Ponzinomics can entice visitors originally of a challenge, however it’s not possible to rely solely on the exterior circulation mannequin, and if the challenge can’t discover its personal inner circulation to soak up the earlier bubble it will be arduous to flee from the demise spiral.

Most present GameFi tasks are nonetheless not playable and don’t mirror the benefits of blockchain when it comes to expertise. Therefore, a transitional GameFi mannequin can solely be constructed from the angle of Web3 customers and financial models. The lifecycle of the tasks just isn’t lengthy, and the event of chains just isn’t superb. Some chains have many video games however poor quantity, whereas others have a sizzling sport however an unbalanced on-chain ecosystem.

The future of GameFi must discover a method to enhance content material, gameplay and tokenomics.

August 2022, Footprint Analytics × W Labs, Data Source: Footprint × W Labs GameFi Report Dashboard

Posted In: Analysis, GameFi

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