GameFi Drives Mass Crypto Adoption ⋆ ZyCrypto
   
GameFi, coined from “gaming” and “finance”, has enabled blockchain-based gaming activities that provide players with monetary or financial rewards for completing game-related tasks. Under the play-to-earn (P2E) model, players can collect in-game assets that can then be traded on secondary markets. The in-game assets include reward and management tokens, Non-Fungible Tokens (NFTs), virtual land and avatars, to name a few.
GameFi is a rapidly growing sector in the crypto space. The NFT boom in 2021 also fueled the growth of the GameFi market. According to TripleA data, in 2020 the crypto gaming industry was reported to have an estimated 320 million crypto owners and generated revenues of $321 million. Nearly 42 million people were reported to own crypto, of which 38% were millennials between the ages of 21 and 36.
55% of millennial gamers owned crypto compared to 5% of all Millenials. Of the players who owned crypto, 80% were interested in purchasing games using crypto, while 67% were hoping for more opportunities for using crypto in games. The gaming market is estimated to grow from USD 222 billion in 2022 to USD 349 billion by 2027.
One of the most popular NFT blockchain-based games, Axie Infinity, recorded a peak of 2.7 million daily active users in November 2021. However, the growth of the GameFi market has come with challenges. In March 2022, a security breach on the Ronin Network resulted in hackers stealing around $600 million, including funds from Axie Infinity players. Other challenges include the high entry costs incurred by players and the exposure to risk from high price volatility. Lack of market regulation remains a concern for the GameFi market.
Models such as Free-To-Play (F2P) are being integrated into GameFi to reduce the high cost of entry for players. GameFi developers are interested in scalable and cheaper blockchains, thus increasing crypto adoption. The F2P model also allows players to gain experience before moving to the P2E models. According to the 2021 Blockchain Game Alliance (BGA) Blockchain Game Report, venture capitalists invested over $4 billion in blockchain-based games and infrastructure in the year, 5,000% higher than in 2020.
   
As the GameFi market continues to grow and attract more investment, it has already caught the eye of governments around the world for both regulation and taxation. GameFi is poised to drive mass crypto adoption and remain an integral part of the crypto ecosystem.
