Jul 22, 2024
15 min read
There’s a host of technologies emerging in today’s time and age, blockchain shining out among them alongside AI and the Internet of Things. They are not necessarily newcomers to the tech scene, but it’s certainly their time in the sun now that grassroots-level adoption is imminent. Blockchain has been largely popular for its contributions to a decentralised financial system since its inception in the shape and form we know it today in 2009. Over time, blockchain gaming has become increasingly popular, with thousands of games now integrated with blockchain technology and token-based interactions.
Fortune Market Insights shares that the global blockchain gaming market was worth $128.62 billion in 2022. Between 2023 and 2030, the market was projected to grow from $154.46 billion to $614.91 billion, at a CAGR of 21.8%.
These are numbers you definitely want to take note of, and for good reason too.
Blockchain or crypto gaming basically puts your average online game on the blockchain and adds real-world value to it. Nowadays, you can confidently express to your parents that you aspire to pursue a career in gaming and be taken seriously. The earnings are substantial in the blockchain gaming sector.
To provide a proper definition: blockchain gaming or web3 gaming involves online games Integrated with public blockchains. These games can incorporate both NFT and fungible token elements. NFTs are linked to items with value, such as land, in-game items, avatars, etc., retaining their value even outside of the game. Fungible tokens can act as reward tokens or in-game currencies.
Further, there are play-to-earn blockchain games gaining in popularity- there are reward systems that pay you crypto tokens when you accomplish particular tasks. As opposed to traditional in-game currency, these tokens have real-world value and can be traded on decentralised exchanges (DEXs), NFT marketplaces, and even centralised exchanges.
It’s to be noted that blockchain-based play-to-earn games are expected to become a $6,324.54 million market by 2031, as forecasted in 2023.
There’s a good reason many of us expect all online games to walk the blockchain route soon enough. It’s best explained through a direct comparison of traditional and blockchain gaming:
Blockchain gaming | Traditional gaming | |
In-game asset ownership |
In web3 gaming, you become the owner of all in-game assets in your
possession and can take them outside of the game as well (usually as
NFTs). |
You do not actually own any of the assets you are provided or win like armour or a particularly coveted character. |
Real-world value | Let us reiterate, in crypto gaming you can get paid in tokens that have value outside of the game. | As opposed to that, traditional gaming currency is only good for in-game purchases and has no real-world value. |
Decentralisation | There are usually DAOs (decentralised autonomous organisations) maintaining and running blockchain games, as well as making all in-game decisions and bringing any changes to the gameplay. This means all the assets are owned by the community and there is no singular entity that can take away your earnings and accomplishments at a whim. | Traditional games are more vulnerable to the wills of a centralised game maker. |
Interoperability | In web3 gaming, the blockchain-powered games can interact with other such games on the same chain or sometimes even inter-chain, with the right technology support. This means the market for the in-game assets have greater potential for expansion. | These games are not interoperable. |
Control of data | Along with control of in-game assets, you own all your private data too in blockchain gaming; the data is only shared when you choose to. | Again, not the case. |
Well, this explains why blockchain gaming has become one of the most hyped-up web3 and blockchain frontiers. You get the fun of gaming with the added perk of the possibility of making it a valid side-hustle.
There are several key components that make up a crypto gaming infrastructure. Let’s get familiar with them:
The native tokens and NFTs mentioned above add real-world value to blockchain gaming, bringing ownership and interconnectedness to empower users. Online gaming is not simply a fun activity anymore when you put it on the chain; it is an avenue that combines the passion for gaming with financial value.
Web3 gaming comes from a very simple base: the enhancement of the traditional gaming experience. This means that while the game rewards its dedicated user base, the play-to-earn model also creates new economic opportunities for non-gamers. Overall, there’s tangible meaning added to the hours players spend with their favourite games, crossing the otherwise wide divide between the physical and the digital worlds.
Speaking of the real-world value, the in-game NFTs are a core part of that value. Non-fungible tokens bring proof of ownership to the blockchain, assigning the users ownership over their assets with complete certainty. Players have full control over what happens to the NFTs, and they can trade the assets without requiring any intermediary to be involved.
No innovation is without its challenges, and the same is true for crypto gaming. The most pressing issues include:
There are quite a few prominent blockchain gaming platforms today. From Decentraland to The Sandbox, each one has its unique set of NFTs and other gaming benefits. Let’s take a look at a couple of them:
Known for its fairly wholesome gameplay, Axie Infinity brings little in-game creatures called ‘Axie’s that you can raise. You can form your Axie team and even battle monsters called Chimeras or battle it out with other players in the Arena. There are individual rewards for different activities.
To enter Axie Infinity, users need to purchase three Axie tokens- an essential step for participating in the game. The primary cryptocurrency in Axie Infinity is Axie Infinity Shards (AXS), which allows governance participation, voting rights, staking for passive income, and breeding Axies. AXS holders can stake their tokens to earn rewards and engage in game development decisions.
The tokenomics of AXS include a fixed maximum supply of 270 million tokens allocated for staking rewards, play-to-earn mechanisms, advisor allocations, and ecosystem funds. User engagement, game developments, and market conditions influence the value of AXS and play a crucial role in the game's economy and player rewards.
Moving away from the more traditional sort of gameplay, StepN is a lifestyle game where users purchase an NFT in the form of a shoe. These NFT shoes encourage users to accumulate reward tokens based on their physical activities, such as walking, jogging, and running. Users cannot earn rewards from their movements without owning the NFT shoe.
Despite the challenges demanding solutions, blockchain gaming is a fresh front for web3 enthusiasts, one that calls to the common man as well with a fun yet rewarding experience. Of course, it is not possible with current blockchain speeds for the entire game to be on chain. But the future of web3 gaming is bright, especially with the metaverse coming into the picture.
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The information provided in this blog is based on publicly available information and is intended solely for personal information, awareness, and educational purposes and should not be considered as financial advice or a recommendation for investment decisions. We have attempted to provide accurate and factual information, but we cannot guarantee that the data is timely, accurate, or complete. 1 Finance Private Limited or any of its representatives will not be liable or responsible for any losses or damages incurred by the Readers as a result of this blog. Readers of this blog should rely on their own investigations and take their own professional advice.
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