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Investors Poured $2.5B Into Crypto Games in Q1 2022: Report

Hype for crypto gaming goes hand in hand with metaverse speculation. A DappRadar report now suggests 2022 will see more growth for the niche.

3 min read
Blockchain games. Image: Shutterstock

A new report by DappRadar and the Blockchain Game Alliance (BGA) suggests that 2022 will be a benchmark year for crypto games developers.

The report reveals that $2.5 billion in investments was raised in Q1 alone this year, adding that developers could see this figure balloon to $10 billion by the end of the year. 

Compared to previous years, these figures also suggest the niche has become a key sector for investors. In 2021, for example, just $4 billion was raised throughout the whole year. 

The investment trend is also supported by growing interest from crypto enthusiasts.

Blockchain gaming attracted 1.22 million unique active wallets (UAW) last month and currently accounts for 52% of the blockchain industry’s activity. 

According to the report, blockchain gaming activity has grown a whopping 2,000% from Q1 last year. 

Cooling interest in the metaverse

There has also been a slight cooling off in metaverse speculation after a “hype cycle” sparked by Facebook’s rebranding to Meta in Q4 last year. 

Trading volume in metaverse projects has since declined 12% to $430 million in Q1 this year. 

The average price of virtual land in Decentraland and The Sandbox—two of the biggest metaverse projects—sank 40% from Q4 2021 to Q1 2022, while trading volume on each platform dropped 20% and 60%, respectively.

Finally, the report also examined the effects of the $622 million Ronin hack, an attack that depleted money from the Ethereum sidechain treasury of open-world blockchain game Axie Infinity and its developer Sky Mavis. 

Despite the hack, the report suggests that Axie Infinity’s blockchain activity had already been in decline from the start of 2022. 

In January, Axie had over 55,000 unique active wallets. This figure declined throughout February and bottomed out at 20,000 UAW just after mid-march. Meanwhile, the Ronin exploit happened on March 23 but wasn’t detected until March 29. 

Unique active wallets on Ronin from October 2021 to the end of March 2022. Source: DappRadar.

The general decline in activity and NFT trading volume on Axie is attributed to changes to SLP token issuance made by Sky Mavis to make Axie’s economy sustainable. 

However, the developers previously said that activity and volume were in decline before the changes were made and that they restricted the in-game supply of SLP to curb the token’s inflation.

Nevertheless, Axie is still one of the top crypto games based on daily usage, attracting over 1.5 million daily active users. 

As for recuperating funds from the hack, Binance led a recent $150 million funding round to reimburse victims of the Ronin bridge exploit and patch the bridge’s vulnerabilities.

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