GameFi tokens show signs of returning narrative with 700% volume growth

GameFi tokens are showing signs of returning as potential gainers, with increased trading volumes. GameFi, an extension of play-to-earn, was among the struggling narratives in the past months. 

GameFi is returning among narratives making short-term gains. A selection of older gaming tokens is showing 700% growth in volumes and positive price action. GameFi tokens are showing signs of re-awakening after games on Telegram also gained popularity. 

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For the past week, Dune Analytics data shows a basket of GameFi tokens grew its volumes by 733%, while marking an average 18% weekly return. The tokens included older markers of Web3 gaming, and include Apecoin (APE), Axie Infinity (AXS), Decentraland (MANA) and The Sandbox (SAND). 

The recent trend of reawakening coincided with the Origins S9 Final Era tournament, with rewards and incentives for a week of playing. AXS held above $6 as more players returned to the Axie Infinity universe. 

The recent GameFi narrative is still relatively small, but may be linked to growing demand for meme tokens, as well as a general shift of liquidity. 

However, the GameFi sector may have to rebuild itself from scratch, as most tokens from the peak market of 2021 have not returned to previous highs. The exact composition for a new gaming index remains uncertain, and in 2024, a new set of winners and losers is emerging. 

5/ Axie Games and Products 🎮

As players discovered and rediscovered Axie, we were shipped updates to Axie experiences.

DAU increased across the board as axie supply decreased.

This was the result of our Part Evolution release last December. pic.twitter.com/lszYwGfHF8

— Axie Infinity (@AxieInfinity) July 22, 2024

Is Web3 gaming making a return?

Web3 and gaming are still categories that are not clear-cut and some are still carrying legacy tokens alongside new, more active assets. 

The GameFi blue chip index is now down to $0.50, a level even lower than the 2023 bear market and period of stagnation. Trading has also shifted to bigger representatives of the space, such as Gala Games (GALA), due to the availability of highly active Binance pairings. 

One of the reasons for the drop is that some of the gaming tokens have a low float and a series of token unlocks. Illuvium (ILV) was one of those tokens, pressured over time to a price of $75. 

Web3 games in their previous form are not making a direct comeback, but new approaches such as mini apps, clickers and Telegram games are trying to offer more sustainable models. Axie Infinity (AXS) is also one of the platforms that grew its user base from 14K active daily users to more than 56K active daily users. Grassroots games like Sunflower Land retain more than 10K daily users. 

At the same time, Animoca Brands is not stopping its activity, expanding to 540 projects through seed investment or other types of support. In the past year, Animoca Brands added 75 startups to its portfolio, but the most notable expansion were partnerships with Toncoin and games on the Telegram chat app.

Gaming revives from 2023 period of stagnation

The overall gaming token sector has recovered from the 2023 bear market, and has a total valuation of $21B. The tokens are still down from the 2024 peak above $34B, but have successfully recovered from recent lows of $16B. 

The gaming space is also showing direct signs of growth, hinging on Ronin-based activity. Web3 gamers generate more than $27M in daily turnover, with an estimated 3.9M active daily gamers across multiple blockchains. Polygon remains one of the go-to chains for gaming, due to its early connection as a L2 to the Ethereum ecosystem.

Newly launching games are also making up the most of activity, while leaving previous top projects behind. The Web3 gaming space may turn out to be more active, diverging from the data of legacy projects. However, some games only rally for the short term, as in the case of Treasure Ship Game. 

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Other games, like Alien Worlds, have proven to be long-time runners, with more than 89K active daily users and a long track record. MetaOasis turned out to be the most active game on Solana. The most successful games in 2024 offer a mix of low fees and newly minted tokens with a chance for price growth. Top chains also include BNB Chain, as well as Flow, WAX, Hive, and Klaytn. The growth of Web3 gaming is adding to the performance of L2 tokens.

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Cryptopolitan reporting by Hristina Vasileva