The emergence of GameFi, the amalgamation of decentralized finance (DeFi) and play-to-earn (P2E) blockchain gaming, has ushered in a new era of gaming and tokenization within the metaverse. This ecosystem incentivizes higher engagement, loyalty, and active governance by granting ownership of in-game assets to players and driving the economies of gaming communities.

The potential for the future development and value of blockchain games is evident in the remarkable success of Axie Infinity, a prime example of GameFi. Axie Infinity has witnessed its user base peak at over 2 million daily active users (DAU) and has generated more than $2 billion in sales and distribution revenue. This exemplifies the impact and influence of games on people’s lives, as Luca from 7 O’clock Capital states, “Games have influenced our past and will continue to influence our lives in the future.”

While the total market capitalization of all GameFi tokens experienced a 15% decline in the first quarter due to market trends, the total number of GameFi users remained relatively stable at around 1.2 million people, consistent with the fourth quarter of 2021.

In terms of funding, the first quarter of this year saw a substantial increase of 194.19% in funding for the entire GameFi market compared to the previous year. However, there was a 40.78% decrease in funding compared to the previous month. Notably, indie games, typically developed by individuals or small groups, outperformed other GameFi projects in terms of scope and funding.

Seed rounds garnered the most funding in the first quarter, and strategic rounds received the highest overall funding, with Polygon and Animoca Brands being the most notable recipients and investors, respectively. This data highlights the stability of the GameFi market and the significant attention from venture capitalists towards new projects, thereby creating more opportunities within the GameFi landscape.

In parallel with the growth of GameFi, the NFT market has experienced tremendous growth and innovation. Starting from February 2021, the number of NFTs surged, with global monthly transaction volume surpassing $200 million. By July of the same year, this volume had exceeded $17 billion, signaling an exponential rise in the market.

Several blue-chip NFT projects, such as PUNK, BAYC, and Doodles, have emerged during this period, astonishing the industry with the rapid growth rate of the NFT market. However, after a year and a half, the monthly transaction volume showed a rapid downward trend, causing concerns among NFT investors regarding liquidity.

Despite these concerns, the market capitalization of the NFT industry skyrocketed from $70 million in January to $22.4 billion, primarily driven by the emergence of projects in the NFT primary market and record-breaking total sales. Yoko from 7 O’clock Capital asserts, “As new assets are tokenized on the blockchain, the number of transactions will continue to increase over time.” This suggests that the NFT market is poised for sustained growth as untapped potential assets are tokenized.

Nevertheless, the current NFT market remains relatively small in comparison to the total crypto market value of over $940 billion. It is essential to recognize that the current NFT innovations, such as digital art, games, virtual lands, and digital collections, represent only the tip of the iceberg in terms of the possibilities and applications of NFTs. This indicates an unlimited future market, requiring the industry to overcome current limitations and strive for diversified innovation.

Addressing the issue of poor liquidity in NFT financialization has become a priority, and the industry has begun exploring solutions. Lending, a significant aspect of both