Game Token Battle Royale: The Survival Rules of GameFi

1. The Evolution of GameFi: From AAA Titles to TG Mini Games

Advantages and Disadvantages of Different Types of GameFi Projects

Since the rise of the GameFi sector in 2018, it has undergone a profound transformation. From the initially ambitious AAA blockchain game projects to the currently popular Telegram (TG) mini games, this evolution not only reflects the shift in market demand but also reflects a rethinking of user experience across the entire industry.

Early GameFi projects often aimed at large-scale AAA games, with development cycles ranging from 3 to 5 years and investment amounts reaching tens of millions or even hundreds of millions of dollars. These projects were like giant ships in the blockchain world, carrying the ambitions of developers and investors. However, the high barriers to entry for these games became a double-edged sword. Players not only needed to possess deep knowledge of cryptocurrencies but also required high-performance hardware. For example, projects like "Illuvium" and "Big Time," while integrating NFT and DeFi elements and showcasing extremely high-quality graphics, also kept many potential users at bay due to their complex mechanisms and high participation costs.

As the market developed, a new trend quietly emerged. TG mini games quickly gained popularity due to their simplicity and ease of access. These games have short development cycles and relatively low investment costs, allowing users to participate with just a regular smartphone. Games like "Dice Bot" and "Rock Paper Scissors Bot," although simple in form, can attract a large number of users in a short time, demonstrating remarkable vitality.

Analyzing the Change in User Demographics: From Cryptocurrency Enthusiasts to Traditional Gamers

This shift is not only reflected in the form of games but also in the change in user demographics. Early GameFi projects primarily attracted cryptocurrency enthusiasts and blockchain technology fans, many of whom were studios or professional players looking to "farm" profits. This explains why early AAA titles/single-player games were so popular, with "Axie Infinity" experiencing explosive growth in 2021 as a typical example.

However, with the launch of Bitcoin ETFs in 2024, more traditional users began to engage with the crypto space. Gaming has become the fastest way to connect Web2 and Web3 users. Traditional gamers, due to their existing gaming experience, find it easier to adapt to the GameFi ecosystem. Nevertheless, the learning curve remains a significant challenge. To address this, many projects have started adopting more user-friendly interfaces and simplified game mechanics to lower the entry barrier. For instance, the pixel-style MMO game "Pixels" offers a wallet-free gaming experience, allowing players to log in directly with their social media accounts, greatly simplifying the participation process.

This evolving trend indicates that GameFi is striving to find a balance between the innovation of blockchain technology and the playability of traditional games. It must not only meet the needs of cryptocurrency enthusiasts but also attract a broad audience of traditional gamers. This transformation is ongoing, and the key to survival in this "battle royale" lies in whether projects can truly understand and meet user needs.

2. The Evolution of GameFi: From "Play-to-Earn" to "Earn-to-Play"

The Rise and Fall of the "Play-to-Earn" Model: Early Success and Sustainability Challenges

The Play-to-Earn (P2E) model in the GameFi sector once sparked a frenzy in the Web3 world. This model allows players to earn real economic rewards through gaming, overturning the traditional model of one-way investment from players. The application of blockchain technology provides unprecedented transparency and security for P2E games, enabling achievements in the virtual world to translate into real-world value. The success of games like Axie Infinity showcases the immense potential of this model.

However, the P2E model also faces sustainability challenges. Firstly, the limitations of blockchain technology, particularly the difficulties in cross-chain communication, restrict the scalability of games. Most P2E games remain confined to a single blockchain, which hinders the expansion of their user base. Secondly, economic incentives may undermine the entertainment value of games, making them feel more like work than leisure activities, with economic returns becoming the primary motivation for playing rather than the enjoyment of the game itself.

Additionally, high entry costs and learning curves have become barriers to the widespread adoption of the P2E model. Data shows that the initial investment for some popular P2E games can reach hundreds of dollars, which is a significant hurdle for many potential players.

The Rise of the "Earn-to-Play" Concept: Reshaping the Balance Between Gaming Experience and Economic Incentives

Currently, the GameFi sector has explored a new direction, known as the "Earn-to-Play" or "Tap-to-Earn" model. This model attempts to rebalance the gaming experience and economic incentives, refocusing on the enjoyment of the game itself.

The core idea of the "Tap-to-Earn" model is that players first earn a certain amount of tokens or assets through simple tasks or activities, and then use these assets to participate in deeper gaming experiences. This approach lowers the entry barrier while retaining elements of economic incentive.

Taking Notcoin on the Ton chain as an example, this application attracted a large number of users. According to official data, the number of participants in mining reached around 36 million at that time. Users could utilize bots on Telegram to continuously tap their phone screens to earn more rewards.

Another advantage of the "Earn-to-Play" model is its sustainability. By lowering entry barriers and emphasizing gaming enjoyment, this model can attract a broader user base, not limited to cryptocurrency enthusiasts. An industry survey indicated that over 40% of new users in games adopting the "Earn-to-Play" model came from traditional gaming backgrounds, significantly expanding the market potential for GameFi.

However, the "Earn-to-Play" model also faces challenges. How to maintain economic incentives while avoiding inflation and token devaluation remains a question developers need to explore continuously. Some successful projects, like Sweatcoin, have achieved relatively stable token economies by strictly controlling token issuance and designing diverse consumption mechanisms.

Overall, the "Earn-to-Play" model represents an important transformation in the GameFi sector, attempting to find a better balance between gaming enjoyment and economic returns. With technological advancements and the emergence of more innovative projects, we have reason to believe that GameFi will continue to evolve, providing players with richer and more sustainable gaming experiences.

3. Challenges and Innovations in Economic Models

Liquidity Management Strategies: Avoiding the Death Spiral of Economic Models

In fact, the economic models of GameFi are quite simple. Most early GameFi projects adopted a straightforward "mining-withdrawal-sale" model. While this model can attract a large number of users in the short term, it often struggles to sustain itself and easily falls into an economic death spiral.

In this model, the interests of project parties and players often conflict. Some projects may take controversial measures, such as adjusting mining difficulty or increasing withdrawal thresholds, to maintain token prices, further exacerbating tensions with players. Meanwhile, some players view the game purely as a "money-making" tool, neglecting the entertainment value and long-term development of the game itself.

Exploring Sustainable Economic Models: Utility Tokens and In-Game Value Creation

To address the issues currently facing the GameFi sector, some projects have begun exploring new economic models. Among them, the PVP (Player vs. Player) model has received widespread attention. In this model, the platform takes on more of a content provider role, creating competitive environments for players without directly participating in the economic cycle. This model is particularly important during the seed user phase, as it helps projects quickly accumulate an initial user base while avoiding excessive interference in the economic system.

However, building a sustainable economic model still faces numerous challenges. The immaturity of the market and technology, combined with the prevalent short-term profit-seeking mentality among investors and players, makes it difficult for many projects to balance short-term attractiveness with long-term sustainability. While large AAA GameFi projects have the potential to create more complex and lasting economic systems, their high barriers to entry and long development cycles also limit their speed of adoption.

In contrast, smaller games, especially those operating on social platforms like Telegram, exhibit unique advantages. These games not only have low entry barriers but also quickly provide users with entertainment experiences and economic returns, making the act of "playing games" itself valuable. This model not only meets users' entertainment needs but also brings them economic benefits in a short time, thus achieving a balance between mental pleasure and material rewards.

From a technological perspective, the application of blockchain offers new possibilities for enhancing game security and fairness. Fully on-chain games, by utilizing blockchain technology and decentralized consensus mechanisms, significantly reduce the risks of fraud, cheating, and unauthorized modifications. This is crucial for building a fair and transparent gaming environment, especially attracting competitive gaming communities.

As the market evolves, we observe an interesting phenomenon: every bull and bear cycle sees a surge of GameFi projects, but very few can survive long-term and be remembered by players. The rise of Telegram games reflects, to some extent, the market's FOMO sentiment while providing Web2 users with a convenient entry point into the Web3 world. This trend may drive further segmentation in the GameFi sector, such as the differentiation between AAA titles and small casual games.

With the arrival of a bull market, capital's attention to the GameFi market is increasing. This presents both opportunities and challenges. On one hand, the influx of funds can drive technological innovation and improve game quality; on the other hand, maintaining the essence of games and user experience amidst capital pursuits will be an important issue for GameFi projects.

Looking ahead, innovation in GameFi economic models will continue. Project teams need to find a balance between attracting new users and retaining old ones, which may require designing more complex token economics and game mechanics. Additionally, how to meet users' demands for both entertainment and profit while avoiding the trap of becoming mere "money-making tools" will be key to the long-term sustainable development of GameFi projects.

4. Future Outlook: The Evolution Direction of GameFi

Can GameFi Become the "Super Mario" of the Crypto World or Fall to "Tetris"?

A key question regarding the future development direction of GameFi is: Can GameFi become the "Super Mario" of the crypto world, or will it fall to "Tetris"? This analogy is quite fitting, as Super Mario represents broad mainstream potential, while Tetris symbolizes a niche but enduring game type.

To achieve a breakthrough similar to Super Mario's mainstream success, the GameFi sector needs a truly "killer" game. This game should be able to attract a large number of users, not just because of its economic incentives, but also due to its outstanding gameplay and innovative design. For instance, if a game of similar quality to "Black Myth: Wukong" were to emerge in the GameFi space, it could likely lead to a rush of users, pushing the entire industry towards mainstream adoption.

Currently, GameFi has made some progress in the mini-game sector, especially on social platforms like Telegram. These games successfully combine entertainment with economic returns, allowing users to gain tangible benefits while enjoying mental pleasure. The success of this model provides important insights for the future development of GameFi: even small games can attract a large user base as long as they balance gameplay and economic incentives effectively.

Prospects for Integration with the Traditional Gaming Industry

However, for GameFi to achieve widespread adoption, it needs to deeply integrate with the traditional gaming industry. This integration may bring a series of challenges, the most prominent of which is taxation. If the play-to-earn model is widely adopted in traditional gaming, how to tax gaming profits will become a complex legal and policy issue. Especially now that Bitcoin and Ethereum ETFs have been approved, and blockchain is gradually entering a compliant world, governments may need to formulate new regulations to address this challenge, which will undoubtedly impact the trajectory of GameFi development.

Another trend worth noting is the differentiation within the GameFi sector. On one hand, we may see more mature AAA GameFi projects emerge. These games, with their high-quality graphics, rich narratives, and complex game mechanics, have the potential to attract a large number of traditional gamers. For example, if an open-world RPG game that incorporates blockchain technology is released and can provide a gaming experience comparable to traditional AAA titles, it could become a key factor in pushing GameFi into the mainstream.

On the other hand, small GameFi games aimed at ordinary users will continue to thrive. These games may focus more on social and casual elements, providing users with quick, simple, yet enjoyable gaming experiences. For instance, we may see more GameFi projects that incorporate social network features, allowing users to naturally engage in games and earn rewards through their daily social interactions.

In summary, the future development of GameFi will be diversified. It may not completely replicate the popular path of Super Mario, nor will it be confined to the niche status of Tetris. Instead, we may witness the gradual formation of an ecosystem that includes various types and scales of games. In this ecosystem, large AAA games and small social games coexist, with traditional gaming elements and blockchain technology deeply integrated, offering diverse choices for different types of users. The success of GameFi will depend on its ability to maintain innovation while continuously enhancing user experience and effectively addressing key challenges such as economic sustainability and legal compliance.