CoinMarketCap and Naavik 2022 Blockchain Gaming Report — Part 2: Popping The P2E Bubble
CMC Research

CoinMarketCap and Naavik 2022 Blockchain Gaming Report — Part 2: Popping The P2E Bubble

Created 1yr ago, last updated 1yr ago

The second of this four-part series breaks down the extensive CoinMarketcap and Naavik 2022 Blockchain Gaming Report, looking at the decline of current play-to-earn games.

CoinMarketCap and Naavik 2022 Blockchain Gaming Report — Part 2: Popping The P2E Bubble

Table of Contents

Part 1 of this four-part series covered the mass adoption of blockchain games mentioned in the CoinMarketCap and Naavik Blockchain Gaming Report. Part 2 looks at how the speculation bubble in play-to-earn games is popping.

Decline of Play-to-Earn Games

This section started with the unraveling of play-to-earn games’ token valuations since the start of 2022:
With the exception of STEPN, which was released in March, prominent games like Axie Infinity, Pegaxy and Crabada are down more than 80% from their all-time highs. Besides the dwindling market capitalization, user numbers are decreasing as well. Axie Infinity's daily active users (DAUs) peaked in November 2021, before undergoing a steep fall:

STEPN’s active users:

Both have seen a meteoric rise and an equally steep fall in user interest.

The same has happened to trade volumes. The monthly traded volume of AXS is down over 95%, as is STEPN's count of monthly shoes/sneakers minted. Sales of virtual land NFTs in Yuga Labs’ Otherside, The Sandbox and Decentraland have also seen a similar collapse in interest.

Blockchain Gaming Eras

The first-era blockchain games were defined by CryptoKitties, released in 2017, which showed the potential of player ownership through NFTs, but lacked playability due to the limitations of the Ethereum network.
The second generation was defined by Sky Mavis and Axie Infinity — but the play-to-earn model had a flawed economic design. However, this second era of blockchain games built on top of the first by utilizing scalability solutions to produce playable games. However, the focus on sustainable yield earning over fun ultimately led to the demise of these play-to-earn games.

More importantly, the report highlighted:

“The next era of crypto games, to (over)simplify, will build off of the previous two eras — using various scalability solutions and sidestepping the most significant economic flaws while prioritizing fun”
Below are three case studies of projects taking the right approach, according to Naavik:


Splinterlands has been announcing a new profile picture project, pre-sales for a new card set, the release of a new podcast, developing two new games, and hosting its first-ever Splinterfest convention. The team is developing its ecosystem at a rapid pace, while delivering long-term utility to its community.
For example, the new card set was sold for the governance token, SPS, instead of the utility token, DEC, and profits went to the DAO instead of the company. Splinterlands is doing well by accruing value to the token holders instead of the developers, and evidently its token price has not suffered a significant drawdown compared to the other P2E projects.


Sorare is an Ethereum-based fantasy sports game, which according to the report, “has a sustainable and arguably very profitable model, which is still rare among blockchain games.” While fantasy sports has been around for a long time, Sorare managed to raise a substantial amount, closing a $680M Series B round led by Softbank in September 2021, at a $4.3B valuation.

Unlike rivals like NBA Top Shot, Sorare is a full-fledged fantasy game. It boasts 500,000 users and 150,000 on-chain card holders, with 30,000 of them transacting monthly. Thanks to its free-to-play model (with the ability to buy or win better cards), Sorare has been able to attract significant interest to its product.

That has allowed the company to build out its staff to 170 employees and 50 job openings, with collaborations with the NBA and the PGA Tour coming.

Dark Forest

Dark Forest, a massive multiplayer strategy game, explores the zero-knowledge proof technology that is to power the next generation of Ethereum scaling solutions. Primarily, the technical achievements of this game stands out — it runs completely on-chain and utilizes secret information that is central to the zero-knowledge approach.

This has a real impact on its gameplay: the "fog of war" that is central to its strategy-focused play is real in Dark Forest. Players can make moves that are verified on the blockchain but remain hidden from their opponents. This is through the implementation of zk-SNARKs, one of the first in blockchain games.

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
1 person liked this article