As with any new-found technology, the question of adoption on the part of the public, and being an early backer on the part of investors is always a very crucial one to make. When it comes to the blockchain ecosystem, adopters of new innovations have proven to be more conservative when compared with investors who continue to inject capital to back startups in the space.
We cannot necessarily say Blockchain technology is still in its infancy as Bitcoin (BTC), the world’s first and largest digital currency, backed by distributed ledger technology, celebrated its 13th anniversary back in January. In over a decade, as many as 79 million people have created a unique wallet on Blockchain.com, representing a 155% upsurge from the level it was back in 2018. The adoption of cryptocurrencies has seen more than 106 million individuals own at least a form of digital currency as of 2021.
While this number may seem impressive, it is just a tiny fraction of the world population, and by that comparison, we can say Blockchain and its accompanying technologies are yet to reach their breakthroughs on the mainstream side.
Narrowing Down the Adoption by Emerging Trends
While Bitcoin, Ethereum (ETH), and a host of other altcoins are the flagship assets known in the crypto space, there are a number of emerging innovations taking the center stage today. Some of these include Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Gaming (DeGames), all of which are evolving as part of Web3.0.
Compared to Bitcoin and the ownership of the mainstream cryptocurrencies, the adoption of these specialized offshoots of blockchain technology has been way more streamlined. According to DappRadar, the total number of Monthly Active Users (MAU) on OpenSea, one of the dominant platforms for trading NFTs, was pegged at 485.45k, all of whom conducted over $4.5 billion worth of trades in the trailing 30-days period.
This number represents only a fraction of the total crypto holders, and if we go further down the evolutionary chain, we would see that Decentralized Gaming has even the least number of users thus far.
DeGames have the prerequisite to stir massive adoption from a wide range of people, especially those in the gaming world. The concept behind decentralized gaming is that users get rewarded for playing games, a concept is generally known as Play-2-Earn (P2E). Much work has been done in this new niche, and only a handful of protocols, including Axie Infinity and The Sandbox, are some of the platforms that have made significant headways in the past.
However, the vision that is being conceived by a lot of innovators is not slowing down the rate at which they are designing and developing new gaming protocols, a trend that is being embraced not minding the ready market or consumers for the games being churned out.
Major confidence that is being considered for developing these games is that they will go mainstream one day as advocates believe top traditional gaming brands will soon venture into adopting decentralized gaming systems the way tech giants like Meta Platforms Inc and Twitter and now deepening their feet in metaverse and Web3.0 initiatives respectively.
As developers deepen their creativity in blockchain games, investors have been fueling this creativity, begging the question of whether this is what DeGames needs at this early stage.
Quit Funding and Pursue Users?
As reported by Yahoo Finance, as much as $33 billion was invested in blockchain and cryptocurrency-focused startups back in 2021, a trend that has trickled into this new year.
Besides trading platforms like FTX that scooped a significant fraction of the funding, gaming protocols account for those with the greatest backing.
Thus far this year, Corite, MetaDojo, and Galaxy Fight Club are amongst the gaming protocols that have received funding from Venture Capital (VC) firms this year, most of which were reported by CryptoMarketsBeat. Critics might be moved to say that these VCs are all but gambling as the chances that these gaming protocols will find their feet, amass the right users and bring significant returns is quite low.
With the uncertainty hanging in the balance, should gaming protocols not rather find the users who would appreciate their creativity and economic models first before funding? Would pursuing financing before being sure that the protocol will entice users and outrank the competition not be considered as a case of placing the cart before the horse?
With the obvious, a balance is expected to be cut between accruing funding and creating an enthusiastic community of users. Venture Capitalists need to know that the blockchain ecosystem is more or less in its discovery phase, and no matter the funding that is committed to gaming startups, not all will succeed. Having this fact clear will help in placing the priorities right as blockchain gaming evolves further.