The 3rd Quarter of 2021 - GameFi, new blockchains and the problem of multi-chain interaction
2021 is coming to an end as we enter the final quarter of the year, with 2022 fast approaching. Despite some volatility in 2021, the world of Blockchain and cryptocurrencies is still on the rise, especially in the Decentralized Finance (DeFi) sector. In general, DeFi also encompasses the game, and the growing NFT space has seen the decentralized financialization of services, products, and digital art evolve into a mainstream phenomenon.
In this third quarter, we see a new trend in the DeFi field, which is GameFi. GameFi (short for Game Finance, which is a combination of Gaming and DeFi) has recently become one of the hot trends. the most prominent trend in the market and become a craze to help blockchain-based games become popular, attracting investors and players from the traditional game market.
Axie Infinity is the “new” craze of the Blockchain Game trend. In July, Axie Infinity recorded nearly $200 million in revenue, 16 times the revenue in June and helped cumulative revenue grow 1,050%. This same month, Axie's market capitalization increased from $315 million to nearly $2.4 billion. The explosion of this leading game has helped a series of other blockchain games in the market have a large growth in capitalization.
Currently, Ethereum is still the platform where most of the development activities of the DeFi ecosystem take place. However, over the past time, a series of new platforms full of potential for development have emerged, attracting money from Ethereum to flow through those platforms. Therefore, one of the essential needs of DeFi users is the ability to easily interact with many different blockchains.
In the early stages, most games were developed on the Ethereum blockchain. There are many successful projects and attract many players such as Axie Infinity, Decentraland, The Sandbox, Sorare, X World Games, etc. (Figure 2)
However, in Q3, Binance Smart Chain (BSC) became a bright spot when many new game projects chose to build on this platform. Games on BSC such as CryptoBlades, MyDefiPet, Faraland or Mobox have attracted a lot of attention recently (Figure 3).
A typical event at the end of July Binance Smart Chain saw a 3-4x increase in daily trading volume compared to the previous period, this is largely due to the development of GameFi projects. CryptoBlades, especially CryptoBlades 7 Day Transactions of CryptoBlades reached 9.23 million around mid-August, the highest ranking of all games, In addition, CryptoBlades also ranked 2nd in terms of number of users. for 30 days of all tokenized games, according to Dapp.
In addition to Ethereum, BSC, Polygon is also a name that attracts a lot of attention in the GameFi world when launching Polygon Studios to serve the Game & NFT ecosystem in Q2. Recently, there are many NFT game projects in progress. and will be developed on the Polygon network. Besides, WAX, Enjin or Flow are also blockchains that are attracting many game projects.
GameFi trends have contributed significantly to the overall growth of the NFT market. At the end of September, in-game NFT assets recorded a trading volume of 2.3 billion USD. Besides, the contributing factor The biggest contributors are digital collections, also known as NFT avatars.
NFTs have been predicted many times to become a major trend in the crypto market and that prediction actually came in Q3. August recorded a record high NFT trading volume, reaching $5.2 billion. . Followed by September, also achieved an impressive figure of 4 billion USD. As a result, in Q3, the total NFT trading volume reached more than 10.67 billion USD, a growth of 704% compared to the previous quarter. At the time of writing, NFT's Total trading volume shows no sign of cooling down, reaching $1.65 billion in just under three weeks of October.
Explosion of new ecosystems
In terms of the development of blockchain platforms besides Ethereum, Q1 saw the strong development of the Binance Smart Chain ecosystem, followed by Polygon in Q2. By Q3, a new series of blockchain platforms. recorded outstanding growth and became bright spots in the market.
The foundation tokens of many ecosystems had a very strong change in Q3 such as LUNA, AVAX, FTM, SOL, NEAR, these tokens continuously reached all-time highs.
After a long time of infrastructure development, new blockchain platforms are ready to receive the inflow of money. In Q3, many ecosystems announced support packages to develop the ecosystem in many ways, from building infrastructure to encouraging projects, as well as users participating in their ecosystem. self.
Notably, the most prominent names are Avalanche, Solana and Fantom with steady growth in both capitalization and TVL. These three platforms have almost completed the core pieces of the ecosystem ready to explode:
- Bridge assets (Bridge)
- Exchange (DEX/AMM)
- Lending protocol (Lending/Borrowing)
- Yield Farming products
With a relatively mature ecosystem and the addition of "opening the valve" with developer and user incentive programs, it has led to a tipping point for all three platforms.
Multi-chain interaction problem
Currently, Ethereum is still the platform where most of the development activities of the DeFi ecosystem take place. However, over the past time, a series of potential new platforms have emerged, attracting cash flows from Ethereum flows through those platforms, so one of the essential needs of DeFi users is the ability to easily interoperate with many different blockchains.
But in this complexity, a major obstacle has arisen. Blockchains simply cannot interact with each other. Ethereum, Binance Smart Chain, Solana, Terra, and dozens of other blockchains are effectively operating in isolation, due to the lack of built-in interoperability. This has had a dramatic effect in dividing the blockchain community, who often have to pick and choose which platforms to reach and support.
As it stands, to interact with services on multiple blockchains, users need to have at least a basic understanding of how the platform works, hold a wallet, and own at least some of its native assets. Understandably, very few individuals and businesses want to go through the hassle of being familiar with multiple platforms.
Therefore, the most necessary thing at the moment is to have a tool that can connect blockchains together. Fortunately, recently a wallet project that supports users to interact with many different platforms on just one application has just been invested $ 1.2 million by many different investors including Alameda Research - named xDEFI Wallet.