Could 2023 Be Polygon’s Year for GameFi?
Ethereum layer-2 scaling solution Polygon has surpassed Binance’s BNB Chain in terms of average daily transactions per week for the second time in 2022. The continued success comes on the back of Polygon’s increasing GameFi users, which have increased by 1.4% from May despite the broader market downturn.
Why is Polygon an Attractive Choice for GameFi Projects?
As a sidechain of Ethereum, Polygon’s EVM compatibility and low fees have attracted developers and users to its DeFi dapps. The solution, which enjoys Ethereum’s security and fast and cheap transactions, has been uniquely positioned to foster a GameFi ecosystem.
To achieve this goal, Polygon announced the creation of Polygon Studios, their gaming ecosystem back in July 2021. The new initiative was aimed to “cement Polygon’s existing lead position as the de-facto platform for NFTs & Gaming.”
Shortly after, reports revealed that Polygon games have seen a steep rise in unique users. According to DappRadar data, some Polygon-based games saw increases upwards of 1000%, with several Polygon games becoming very successful fast.
Arc8, Aavegotchi, Sunflower Land, and Pegaxy, are some of the most popular blockchain games that have chosen to grow their gaming communities with Polygon. Currently, there are well over 100 GameFi projects on Polygon, with the top three being Planet IX, Benji Bananas, and Arc8 by GAMEE.
Moreover, despite the recent market downturn, the number of gaming users on Polygon has continued to increase. According to a Delphi Digital report, the number of Polygon’s unique users within the gaming sector has increased by 1.4% from May. Likewise, the number of unique users on the Polygon network has trended higher, up 72%, with users peaking at 5.9 million during October.
However, relative to total Polygon network users, the percentage of gamers dropped by 16% to 23% in November. The total gaming transactions within the Polygon network have also dropped 40% since late May, from 429k to 255k.
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GameFi Market Continue Downtrend Amid FTX Saga
The GameFi market has continued its downtrend in the past month amid the recent collapse of FTX, once the third-largest crypto exchange in the world that filed for bankruptcy in early November.
The decreasing investment in the GameFi space continued, with the amount of investment and the number of funds reaching a historic low. According to a report by Footprint Analytics, GameFi funding plunged to $60 million in November, a decline of 69% month-over-month.
There were just nine rounds of fundraising in the GameFi industry in the past month. Most of those rounds were for a handful of developers with a record of publishing successful projects in Web3 or Web2, including Roboto Games and Tokyo-based development studio Thirdverse.
The trading volume in GameFi also took a brutal hit, dropping from $260 million in October to $100 million. Similarly, transactions per user dipped at the end of November but are still higher than six months ago.
All in all, monthly active users (MAU) for GameFi projects dropped from 2.2 million in October to 2 million, while new users declined by just over a hundred thousand. However, Polygon saw a sharp uptick in the number of new users thanks to several titles rising in popularity, including Benji Bananas and Planet IX.
The layer-2 solution has established itself as a potential winner in the GameFi space, landing partnerships with numerous high-profile companies like Meta, Reddit, Starbucks, and more. It remains to be seen if Polygon attracts more new users in 2023.
As of now, Polygon’s native token MATIC is trading at $0.8019, up by 1.04% over the past day. However, the token is down by more than 70% compared to its all-time high of $2.92 in late December 2021.
Do you think Polygon will be the go-to for gaming projects? Let us know in the comments below.