Crypto exchange Huobi's inquiry arm, Huobi Research, has identified a rising interest in blockchain gaming equally a direct impact from GameFi initiatives. GameFi implies the utilize of decentralized finance (DeFi) and blockchain gaming that incentivizes users based on a play-to-earn model.

According to Huobi Research, on-chain data suggests that GameFi initiatives take seen a steep increase since June 2022, owing to a sizable reduction in transaction costs and improved user experience.

Ways that GameFi reduces transaction fees. Source: Huobi Research

The enquiry shows that popular blockchain games such as CryptoKitties recorded a maximum of 140,000 daily active users and 180,000 daily transactions back in Nov 2022 simply lost over 90% user interaction inside a few months:

"Early blockchain games suffered from defects such every bit singular models, simplistic entertainment and poor experiences in general."
Changes in CryptoKitties daily active users and trading volume. Source: DappRadar, Huobi Inquiry

However, the blockchain gaming manufacture saw a comeback with integrating nonfungible tokens (NFT), DeFi and other play-to-earn elements. NFT-based pet game Axie Infinity made $9.72 meg in a single twenty-four hours in June, surpassing Tencent'due south tape at the time.

"DApp rankings bear witness that five of the acme 9 apps are GameFi apps. Every bit of early December [2021], GameFi's weekly active users have reached 9.21 million, a record high."

Based on the above findings, Huobi Inquiry ended that transaction costs are essential in new institutional economics. While the gaming industry had already implemented play-to-earn features, "the society tends to choose the system with the lowest transaction costs to operate."

The research also highlights three fundamental aspects of how GameFi differs from other existing gaming models — free trading of game materials, free trading and pricing of game currencies, and protection of holding rights. Moreover, GameFi developers have the reward to deploy private belongings rights via NFTs at a lower cost:

"This not only is a comparative reward that traditional game developers never had, simply also reflects the intrinsic value of blockchain engineering science in the gaming industry."