3 posts tagged with "gaming"

Web3 gaming leaders are converging on a radical vision: gaming's $150 billion economy will grow to trillions by restoring digital property rights to 3 billion players—but their paths to get there diverge in fascinating ways. From Animoca Brands' democratic ownership thesis to Immutable's cooperative economics, these pioneers are architecting fundamentally new relationships between players, creators, and platforms that challenge decades of extractive gaming business models.

This comprehensive analysis examines how Yat Siu (Animoca Brands), Jeffrey Zirlin (Sky Mavis), Sebastien Borget (The Sandbox), Robbie Ferguson (Immutable), and Mackenzie Hom (Metaplex Foundation) envision gaming's transformation through blockchain technology, digital ownership, and community-driven economies. Despite coming from different technical infrastructures and regional markets, their perspectives reveal both striking consensus on core problems and creative divergence on solutions—offering a multi-dimensional view of gaming's inevitable evolution.

The foundational crisis all five leaders identify​

Every leader interviewed begins from the same damning diagnosis: traditional gaming systematically extracts value from players while denying them ownership. Ferguson captures this starkly: "Players spend $150BN every year on in-game items and own$0 of it." Borget experienced this firsthand when The Sandbox's original mobile version achieved 40 million downloads and 70 million player creations, yet "app store and Google Play limitations prevented us from sharing revenue, leading creators to leave over time."

This extraction goes beyond simple business models to what Siu frames as a fundamental denial of digital property rights. "Digital property rights can provide the basis for a fairer society," he argues, drawing parallels to 19th-century land reforms. "Property rights and capitalism are the foundation that allows for democracy to happen... Web3 can save the capitalist narrative by turning users into stakeholders and co-owners." His framing elevates gaming economics to questions of democratic participation and human rights.

Zirlin brings practitioner perspective from Axie Infinity's explosive growth and subsequent challenges. His key insight: "Web3 gamers are traders, they're speculators, that's part of their persona." Unlike traditional gamers, this audience analyzes ROI, understands tokenomics, and sees games as part of broader financial activity. "Teams that don't understand that and just think that they're normal gamers, they're going to have a hard time," he warns. This recognition fundamentally reshapes what "player-first design" means in Web3 contexts.

Ferguson defines the breakthrough as "cooperative ownership"—"the first time the system is trying to align the incentives of players and publishers." He notes bitterly that "everyone hated free-to-play when it first came out... and quite frankly, why shouldn't they because it's often been at their expense. But web3 gaming is steered by passionate CEOs and founders who are enormously driven to prevent players from continuously getting ripped off."

From play-to-earn hype to sustainable gaming economies​

The most significant evolution across all five leaders involves moving beyond pure "play-to-earn" speculation toward sustainable, engagement-based models. Zirlin, whose Axie Infinity pioneered the category, offers the most candid reflection on what went wrong and what's being corrected.

The Axie lessons and aftermath​

Zirlin's admission cuts to the heart of first-generation play-to-earn failures: "When I think about my childhood, I think about my relationship with Charmander. Actually, the thing that got me so addicted to Pokemon was I really needed to level up my Charmander to Charmeleon to Charizard... That's actually what got me into it—that same experience, that same emotion is really needed in the Axie universe. It's actually to be honest, the thing that we didn't have last cycle. That was the hole in the ship that prevented us from reaching the grand line."

Early Axie focused heavily on earning mechanics but lacked emotional progression systems that create genuine attachment to digital creatures. When token prices collapsed and earnings evaporated, nothing retained players who had joined purely for income. Zirlin now advocates "risk-to-earn" models like competitive tournaments where players pay entry fees and prize pools distribute to winners—creating sustainable, player-funded economies rather than inflationary token systems.

His strategic framing now treats Web3 gaming as "a seasonal business where it's like during the bull market, it's kind of like the holiday season" for user acquisition, while bear markets focus on product development and community building. This cyclical thinking represents sophisticated adaptation to crypto's volatility rather than fighting it.

Terminology shifts signal philosophical evolution​

Siu has moved deliberately from "play-to-earn" to "play-and-earn": "Earning is something you have the option to do but is not the sole reason to play a game. In terms of value, whatever you earn in a game need not simply be financial in nature, but could also be reputational, social, and/or cultural." This reframing acknowledges that financial incentives alone create extractive player behavior rather than vibrant communities.

Hom's Token 2049 statement crystallizes the industry consensus: "Pure speculation >> loyalty and contribution based rewards." The ">>" notation signals an irreversible transition—speculation may have bootstrapped initial attention, but sustainable Web3 gaming requires rewarding genuine engagement, skill development, and community contribution rather than purely extractive mechanics.

Borget emphasizes that games must prioritize fun regardless of blockchain features: "No matter the platform or technology behind a game, it must be enjoyable to play. The core measure of a game's success is often linked to how long users engage with it and whether they are willing to make in-game purchases." The Sandbox's LiveOps seasonal model—running regular in-game events, quests, and mission-based rewards—demonstrates this philosophy in practice.

Ferguson sets the quality bar explicitly: "The games we work with have to be fundamental quality games that you would want to play outside of web3. That's a really important bar." Web3 features can add value and new monetization, but cannot salvage poor gameplay.

Digital ownership reimagined: From assets to economies​

All five leaders champion digital ownership through NFTs and blockchain technology, but their conceptions differ in sophistication and emphasis.

Property rights as economic and democratic foundation​

Siu's vision is the most philosophically ambitious. He seeks Web3 gaming's "Torrens moment"—referencing Sir Richard Torrens who created government-backed land title registries in the 19th century. "Digital property rights and capitalism are the foundation that allows for democracy to happen," he argues, positioning blockchain as providing similar transformative proof of ownership for digital assets.

His economic thesis: "You could say we're living in a $100 billion virtual economy—what happens if you turn that$100 billion economy into an ownership one? We think it will be worth trillions." The logic: ownership enables capital formation, financialization through DeFi (loans against NFTs, fractionalization, lending), and most critically, users treating virtual assets with the same care and investment as physical property.

The paradigm inversion: Assets over ecosystems​

Siu articulates perhaps the most radical reframing of gaming architecture: "In traditional gaming, all of a game's assets benefit only the game, and engagement benefits only the ecosystem. Our view is exactly the opposite: we think that it's all about the assets, and that the ecosystem is at the service of the assets and their owners."

This inversion suggests games should be designed to add value to assets players already own rather than assets existing solely to serve game mechanics. "The content is the platform as opposed to the platform delivering the content," Siu explains. In this model, players accumulate valuable digital property across games, with each new experience designed to make those assets more useful or valuable—similar to how new apps add utility to smartphones you already own.

Ferguson validates this from infrastructure perspective: "We have brand new monetization mechanisms, secondary marketplaces, royalties. But you also will take the size of gaming from $150 billion to trillions of dollars." His example: Magic: The Gathering has "$20 billion of cards out there in the world, physical cards, but every year they can't monetize any of the secondary trading." Blockchain enables perpetual royalties—taking "2% of every transaction in perpetuity, no matter where they trade"—transforming business models fundamentally.

Creator economies and revenue sharing​

Borget's vision centers on creator empowerment through true ownership and monetization. The Sandbox's three-pillar approach (VoxEdit for 3D creation, Game Maker for no-code game creation, LAND virtual real estate) enables what he calls "create-to-earn" models alongside play-to-earn.

India has emerged as The Sandbox's largest creator market with 66,000 creators (versus 59,989 in the US), demonstrating Web3's global democratization. "We've proven that India is not like just the tech workforce of the world," Borget notes. "We've shown that blockchain projects can be successful... in the content and entertainment side."

His core philosophy: "We've brought this ecosystem into being, but experiences and assets that players make and share are what drives it." This positions platforms as facilitators rather than gatekeepers—a fundamental role inversion from Web2 where platforms extract most value while creators receive minimal revenue share.

Infrastructure as the invisible enabler​

All leaders acknowledge that blockchain technology must become invisible to players for mass adoption. Ferguson captures the UX crisis: "If you ask someone to sign up, and write down 24 seed words, you are losing 99.99% of your customers."

The passport breakthrough​

Ferguson describes the "magic moment" from Guild of Guardians' launch: "There are so many comments around people saying, 'I hated web3 gaming. I never got it.' There was literally a tweet here, which is, 'My brother has never tried web3 gaming before. He never wanted to write down his seed words. But he's been playing Guild of Guardians, he's created a passport account, and he's completely addicted.'"

Immutable Passport (2.5+ million signups by Q3 2024) offers passwordless sign-on with non-custodial wallets, solving the onboarding friction that killed previous Web3 gaming attempts. Ferguson's infrastructure-first approach—building Immutable X (ZK-rollup handling 9,000+ transactions per second) and Immutable zkEVM (first EVM-compatible chain specifically for games)—demonstrates commitment to solving scalability before hype.

Cost reduction as enabling innovation​

Hom's strategic work at Metaplex addresses the economic viability challenge. Metaplex's compressed NFTs enable **minting 100,000 NFTs for just $100** (less than$0.001 per mint), compared to Ethereum's prohibitive costs. This 1,000x+ cost reduction makes gaming-scale asset creation economically viable—enabling not just expensive rare items but abundant consumables, currency, and environmental objects.

Metaplex Core's single-account design further reduces costs by 85%, with NFT minting costing 0.0029 SOL versus 0.022 SOL for legacy standards. The February 2025 Execute feature introduces Asset Signers—allowing NFTs to autonomously sign transactions, enabling AI-driven NPCs and agents within game economies.

Zirlin's Ronin blockchain demonstrates the value of gaming-specific infrastructure. "We realized that, hey, we're the only ones who really understand the Web3 gaming users and nobody is out there building the blockchain, the wallet, the marketplace that really works for Web3 games," he explains. Ronin reached 1.6 million daily active users in 2024—proving purpose-built infrastructure can achieve scale.

The simplicity paradox​

Borget identifies a crucial 2024 insight: "The most popular web3 applications are the simplest ones, proving that you do not always need to build triple-A games to match the demand of users." TON's 900 million user base powering hypercasual mini-games demonstrates that accessible experiences with clear ownership value can onboard users faster than complex AAA titles requiring years of development.

This doesn't negate the need for high-quality games, but suggests the path to mass adoption may run through simple, immediately enjoyable experiences that teach blockchain concepts implicitly rather than requiring upfront crypto expertise.

Decentralization and the open metaverse vision​

Four of five leaders (excluding Hom, who has limited public statements on this) explicitly advocate for open, interoperable metaverse architectures rather than closed proprietary systems.

The walled garden threat​

Borget frames this as an existential battle: "We strongly advocate for the core of the open metaverse to be decentralization, interoperability and creator-generated content." He explicitly rejects Meta's closed metaverse approach, stating "this diversity of ownership means that no single party can control the metaverse."

Siu co-founded the Open Metaverse Alliance (OMA3) to establish open standards: "What we want to prevent is that people are going to create sort of an API-based, permission-based, metaverse alliance where people give access to each other and then they can turn it off whenever they want to, almost like sort of a trade war style. It's supposed to be that the end user actually has most of the agency. It's their assets. You can't take it away from them."

Ferguson's position from his 2021 London Real interview: "The most important fight of our lives is to keep the Metaverse open." Even acknowledging Meta's entry as "a fundamental core admission of the value that digital ownership provides," he insists on open infrastructure rather than proprietary ecosystems.

Interoperability as value multiplier​

The technical vision involves assets that work across multiple games and platforms. Siu offers a flexible interpretation: "Nobody said that an asset has to exist in the same way—who said that a Formula One car has to be a car in a medieval game, it could be a shield, or be whatever. This is a digital world, why do you have to restrict yourself to the traditional thing."

Borget emphasizes: "It's important to us that the content you own or create in The Sandbox can be transferred to other open metaverses, and vice versa." The Sandbox's partnerships with 400+ brands create network effects where popular IP becomes more valuable as it achieves utility across multiple virtual worlds.

Progressive decentralization through DAOs​

All leaders describe gradual transitions from centralized founding teams to community governance. Borget: "Since the original whitepaper, it's been part of our plan to progressively decentralize Sandbox over five years... progressively, we want to give more power, freedom and autonomy to the players and creators who are contributing to the success and the growth of the platform."

The Sandbox DAO launched May 2024 with 16 community-submitted improvement proposals voted upon. Siu sees DAOs as civilizational transformation: "We think DAOs are the future of most organizations, big and small. It's the next evolution of business, allowing it to integrate the community into the organization... DAOs are going to reinvigorate democratic ideals because we will be able to iterate on democratic concepts at the speed of digital."

Metaplex's MPLX token governance and movement toward immutable protocols (no entity can modify standards) demonstrates infrastructure-layer decentralization—ensuring game developers building on these foundations can trust long-term stability independent of any single organization's decisions.

Regional strategies and market insights​

The leaders reveal divergent geographic focuses reflecting their different market positions.

Asia-first versus global approaches​

Borget explicitly built The Sandbox as "a metaverse of culture" with regional localization from the start. "Unlike some Western companies that prioritize the U.S. first, we... embed small, regionally-focused teams in each country." His Asian focus stems from early fundraising: "We pitched over 100 investors before securing seed funding from Animoca Brands, True Global Ventures, Square Enix and HashKey—all based in Asia. That was our first indicator that Asia had a stronger appetite for blockchain gaming than the West."

His cultural analysis: "Technology is ingrained into the culture and the daily habits of people in Korea, Japan, China and other Asian markets." He contrasts this with Western resistance to new technology adoption, particularly among older generations: "older generations already invested in stocks, real estate, digital payments and transportation systems. There's no resistance to adopting new technology."

Zirlin maintains deep ties to the Philippines, which powered Axie's initial growth. "The Philippines is the beating heart of web3 gaming," he declares. "In the last day, 82,000 Filipinos have played Pixels... for all of the doubters, these are real people, these are Filipinos." His respect for the community that survived through Axie earnings during COVID reflects genuine appreciation beyond extractive player relationships.

Ferguson's strategy involves building the largest gaming ecosystem regardless of geography, though with notable Korean partnerships (NetMarble's MARBLEX, MapleStory Universe) and emphasis on Ethereum security and Western institutional investors.

Siu, operating through Animoca's 540+ portfolio companies, takes the most globally distributed approach while championing Hong Kong as a Web3 hub. His appointment to Hong Kong's Task Force on Promoting Web3 Development signals governmental recognition of Web3's strategic importance.

Timeline of evolution: Bear markets build foundations​

Examining how thinking evolved from 2023-2025 reveals pattern recognition around market cycles and sustainable building.

2023: Cleanup year and foundation strengthening​

Siu framed 2023 as "a cleanup year... a degree of purging, particularly of bad actors." The market crash eliminated unsustainable projects: "When you go through these cycles, there's a maturation, because we've also had a lot of Web3 gaming companies shut down. And the ones who shut down really probably didn't have any business being around in the first place."

Zirlin focused on product improvements and emotional engagement systems. Axie Evolution launched, allowing NFTs to upgrade through gameplay—creating the progression mechanics he identified as missing from the original success.

Borget used the bear market to refine no-code creation tools and strengthen brand partnerships: "many brands and celebrities are looking for novel ways to engage with their audience through UGC-driven entertainment. They see that value regardless of Web3 market conditions."

2024: Infrastructure maturity and quality games launching​

Ferguson described 2024 as infrastructure breakthrough year with Immutable Passport scaling to 2.5 million users and zkEVM processing 150 million transactions. Guild of Guardians launched to 4.9/5 ratings and 1+ million downloads, proving Web3 gaming could achieve mainstream quality.

Zirlin called 2024 "a year of building and foundation setting for web3 games." Ronin welcomed high-quality titles (Forgotten Runiverse, Lumiterra, Pixel Heroes Adventures, Fableborne) and shifted from competitive to collaborative: "While the bear market was very much a competitive environment, in '24 we began to see the web3 gaming sector unify and focus on points of collaboration."

Borget launched The Sandbox DAO in May 2024, marked Alpha Season 4's success (580,000+ unique players across 10 weeks playing an average of two hours), and announced the Voxel Games Program enabling developers to build cross-platform experiences using Unity, Unreal, or HTML5 while connecting to Sandbox assets.

Hom moderated the major gaming panel at Token 2049 Singapore alongside industry leaders, positioning Metaplex's role in gaming infrastructure evolution.

2025: Regulatory clarity and mass adoption predictions​

All leaders express optimism for 2025 as breakthrough year. Ferguson: "Web3 gaming is poised for a breakthrough, with top-quality games, many years in development set to launch in the next 12 months. These titles are projected to attract hundreds of thousands, and in some cases, millions of active users."

Zirlin's New Year's resolution: "It's time for unity. With gaming season + Open Ronin on the horizon, we're now entering an era where web3 gaming will be working together and winning together." The merger of Ronin's ecosystem and opening to more developers signals confidence in sustainable growth.

Siu predicts: "By the end of the next year... substantial progress will be made around the world in establishing regulations governing digital asset ownership. This will empower users by providing them with explicit rights over their digital property."

Borget plans to expand from one major season per year to four seasonal events in 2025, scaling engagement while maintaining quality: "My New Year's resolution for 2025 is to focus on improving what we're already doing best. The Sandbox is a lifetime journey."

Key challenges identified across leaders​

Despite optimism, all five acknowledge significant obstacles requiring solutions.

Cross-chain fragmentation and liquidity​

Borget identifies a critical infrastructure problem: "Web3 gaming has never been as big as it is today... yet it is more fragmented than it has ever been." Games exist across Ethereum/Polygon (Sandbox), Ronin (Axie, Pixels), Avalanche (Off The Grid), Immutable, and Solana with "very little permeability of their audience from one game to another." His 2025 prediction: "more cross-chain solutions will appear that will address this issue and ensure users can swiftly move assets and liquidity across any of these ecosystems."

Ferguson has focused on this through Immutable's global orderbook vision: "creating a world where users will be able to trade any digital asset on any wallet, rollup, marketplace, and game."

Platform restrictions and regulatory uncertainty​

Siu notes that "leading platforms like Apple, Facebook, and Google currently restrict the use of NFTs in games," limiting utility and hindering growth. These gatekeepers control mobile distribution—the largest gaming market—creating existential risk for Web3 gaming business models.

Ferguson sees regulatory clarity as 2025 opportunity: "With the likelihood of regulatory clarity around many aspects of web3 in the US and across major markets, teams across gaming and broader web3 could benefit and unleash new and exciting innovations."

Reputation and Sybil attacks​

Siu addresses the identity and trust crisis: "The genesis of Moca ID came from issues we faced with KYC wallets being sold to third parties who shouldn't have passed KYC. Sometimes up to 70 or 80% of wallets were mixtures of farming or people just hoping for good luck. This is a problem that plagues our industry."

Animoca's Moca ID attempts to solve this with reputation systems: "creating a reputation stat that indicates how you've behaved in the Web3 space. Think of it almost like a Certificate of Good Standing in Web3."

Developer support gaps​

Borget criticizes blockchain networks for failing to support game developers: "In contrast [to console platforms like PlayStation and Xbox], blockchain networks have not yet assumed a similar role." The expected network effects "where value and users flow freely across games on a shared chain—have not fully materialized. As a result, many web3 games lack the visibility and user acquisition support needed to grow."

This represents a call to action for Layer 1 and Layer 2 networks to provide marketing, distribution, and user acquisition support similar to traditional platform holders.

Sustainable tokenomics remains unsolved​

Despite progress beyond pure speculation, Ferguson acknowledges: "Web3 monetization is still evolving." Models showing promise include The Sandbox's LiveOps events, tournament-based "risk-to-earn," hybrid Web2/Web3 monetization combining battle passes with tradeable assets, and tokens used for user acquisition rather than primary revenue.

Zirlin frames the question directly: "Right now, if you look at which tokens are performing well, it's tokens that are able to have buybacks, and buybacks are typically a function of are you able to generate revenue? So then the question becomes what revenue models are working for Web3 Games?" This remains an open question requiring more experimentation.

Unique perspectives: Where leaders diverge​

While consensus exists on core problems and directional solutions, each leader brings distinctive philosophy.

Yat Siu: Democratic ownership and financial literacy​

Siu uniquely frames Web3 gaming as political and civilizational transformation. His Axie Infinity case study: "Most of those people don't have a university degree... nor do they have a strong education in financial education—however, they were completely able to grasp the use of a crypto wallet... helping them survive basically the Covid crisis at the time."

His conclusion: Gaming teaches financial literacy faster than traditional education while demonstrating that Web3 provides more accessible financial infrastructure than legacy banking. "Opening up a physical bank account" is harder than learning MetaMask, he argues—suggesting Web3 gaming could bank the unbanked globally.

His prediction: By 2030, billions using Web3 will think like investors or owners rather than passive consumers, fundamentally altering social contracts between platforms and users.

Jeffrey Zirlin: Web3 as seasonal business with trader-gamers​

Zirlin's recognition that "Web3 gamers are traders, they're speculators" fundamentally changes design priorities. Rather than hiding economic gameplay, successful Web3 games should embrace it—providing transparent tokenomics, market mechanics as core features, and respecting players' financial sophistication.

His seasonal business framework offers strategic clarity: use bull markets for aggressive user acquisition and token launches; use bear markets for product development and community cultivation. This acceptance of cyclicality rather than fighting it represents mature adaptation to crypto's inherent volatility.

His Philippines-centric perspective maintains humanity in often-abstract discussions of gaming economies, remembering actual people whose lives improved through earning opportunities.

Sebastien Borget: Cultural metaverse and creation democratization​

Borget's vision centers accessibility and cultural diversity. His "digital Legos" metaphor—emphasizing that "anyone knows how to use it without reading the user manual"—guides design decisions prioritizing simplicity over technical complexity.

His insight that "the simplest [Web3 applications] are the most popular" in 2024 challenges assumptions that only AAA-quality games can succeed. The Sandbox's no-code Game Maker reflects this philosophy, enabling 66,000 Indian creators without technical blockchain expertise to build experiences.

His commitment to "metaverse of culture" with regional localization distinguishes The Sandbox from Western-centric platforms, suggesting virtual worlds must reflect diverse cultural values and aesthetics to achieve global adoption.

Robbie Ferguson: Cooperative ownership and quality bar​

Ferguson's "cooperative ownership" framing most clearly articulates the economic realignment Web3 enables. Rather than zero-sum extraction where publishers profit at player expense, blockchain creates positive-sum economies where both benefit from ecosystem growth.

His quality bar—that games "have to be fundamental quality games that you would want to play outside of web3"—sets the highest standard among the five leaders. He refuses to accept that Web3 features can compensate for poor gameplay, positioning blockchain as enhancement rather than excuse.

His infrastructure obsession (Immutable X, zkEVM, Passport) demonstrates belief that technology must work flawlessly before mass adoption. Building for years through bear markets to solve scalability and UX before seeking mainstream attention reflects patient, foundational thinking.

Mackenzie Hom: Contribution over speculation​

While Hom has the most limited public presence, her Token 2049 statement captures essential evolution: "Pure speculation >> loyalty and contribution based rewards." This positions Metaplex's strategic focus on infrastructure enabling sustainable reward systems rather than extractive token mechanics.

Her work on Solana gaming infrastructure (Metaplex Core reducing costs 85%, compressed NFTs enabling billions of assets for minimal cost, Asset Signers for autonomous NPCs) demonstrates belief that technical capabilities unlock new design possibilities. Solana's 400ms block times and sub-penny transactions enable real-time gameplay impossible on higher-latency chains.

Implementations and exemplar games​

The leaders' visions manifest in specific games and platforms demonstrating new models.

The Sandbox: Creator economy at scale​

With 6.3+ million user accounts, 400+ brand partnerships, and 1,500+ user-generated games, The Sandbox exemplifies Borget's creator empowerment vision. Alpha Season 4 achieved 580,000+ unique players spending average two hours playing, demonstrating sustainable engagement beyond speculation.

The DAO governance with 16 community-submitted proposals voted upon realizes progressive decentralization. The Sandbox's achievement of 66,000 creators in India alone validates the global creator economy thesis.

Axie Infinity: Play-to-earn evolution and emotional design​

Zirlin's incorporation of Axie Evolution system (allowing NFTs to upgrade through gameplay) addresses his identified missing piece—emotional progression creating attachment. The multi-game universe (Origins card battler, Classic returned with new rewards, Homeland land-based farming) diversifies beyond single gameplay loop.

Ronin's achievement of 1.6 million daily active users and success stories (Pixels growing from 5,000 to 1.4 million DAU after migrating to Ronin, Apeiron from 8,000 to 80,000 DAU) validate gaming-specific blockchain infrastructure.

Immutable ecosystem: Quality and cooperative ownership​

Guild of Guardians' 4.9/5 rating, 1+ million downloads, and testimonials from players who "hated Web3 gaming" but became "completely addicted" demonstrate Ferguson's thesis that invisible blockchain enhances rather than defines experience.

The ecosystem's 330+ games and 71% year-over-year growth in new game announcements (fastest in industry per Game7 report) shows developer momentum toward Immutable's infrastructure-first approach.

Gods Unchained's 25+ million cards in existence—more NFTs than every other Ethereum blockchain game combined—proves trading card games as natural Web3 fit with digital ownership.

Animoca Brands: Portfolio approach and property rights​

Siu's 540+ Web3-related investments including OpenSea, Yuga Labs, Axie Infinity, Dapper Labs, Sky Mavis, Polygon create an ecosystem rather than single product. This network approach enables cross-portfolio value creation and the MoCA Portfolio Token offering index exposure.

Mocaverse's Moca ID reputation system addresses Sybil attacks and trust issues, while Open Campus education initiatives expand digital ownership beyond gaming into $5 trillion education market.

Metaplex: Infrastructure enabling abundance​

Metaplex's achievement of 99%+ of Solana NFT mints using their protocols and powering $9.2 billion in economic activity** across 980+ million transactions demonstrates infrastructure dominance. The ability to mint **100,000 compressed NFTs for$100 enables gaming-scale asset creation previously economically impossible.

Major games leveraging Metaplex (Nyan Heroes, Star Atlas, Honeyland, Aurory, DeFi Land) validate Solana as gaming blockchain with speed and cost advantages.

Common themes synthesized: The convergence​

Despite different technical stacks, regional focuses, and specific implementations, the five leaders converge on core principles:

1. Digital ownership is inevitable and transformative - Not optional feature but fundamental restructuring of player-platform relationships

2. Speculation must evolve to sustainable engagement - Pure token speculation created boom-bust cycles; sustainable models reward genuine contribution

3. Quality games are non-negotiable - Web3 features cannot save poor gameplay; blockchain should enhance already-excellent experiences

4. Infrastructure must be invisible - Mass adoption requires removing blockchain complexity from user experience

5. Creators must be empowered and compensated - Platforms should facilitate rather than extract; creators deserve ownership and revenue share

6. Interoperability and openness create more value than closed systems - Network effects and composability multiply value beyond proprietary walled gardens

7. Community governance through progressive decentralization - Long-term vision involves shifting control from founding teams to DAOs and token holders

8. Gaming will onboard billions to Web3 - Gaming provides most natural entry point for mainstream blockchain adoption

9. Patient building through market cycles - Bear markets for development, bull markets for distribution; focus on foundations not hype

10. The opportunity is measured in trillions - Converting $150B gaming economy to ownership-based model creates multi-trillion dollar opportunity

Looking forward: The decade ahead​

The leaders project Web3 gaming's trajectory with remarkable consistency despite their different vantage points.

Ferguson predicts: "Everyone is still massively underestimating how big web3 gaming is going to be." He sees Web3 gaming reaching $100 billion in the next decade while growing the overall gaming market to trillions through new monetization and engagement models.

Siu's 2030 predictions: (1) Billions using Web3 with better financial literacy, (2) People expecting value for their data and engagement, (3) DAOs becoming bigger than traditional organizations through token networks.

Zirlin frames 2025 as "gaming season" with regulatory clarity enabling innovation: "Innovation when it comes to the web3 game economy is set to explode in 2025. Regulatory clarity is set to unleash more experiments when it comes to novel mechanics for distributing tokens."

Borget sees AI integration as next frontier: "I'm interested in the evolution of AI-powered virtual agents, moving beyond static NPCs to fully interactive, AI-driven characters that enhance immersion in gaming." His implementation of AI for chat moderation, motion capture, and planned intelligent NPCs positions The Sandbox at the convergence of AI and Web3.

The consensus: One breakout 100+ million player Web3 game will trigger mass adoption, proving the model works at scale and forcing traditional publishers to adapt. Ferguson: "The answer to skeptics is not debate. It's building an exceptional game that 100 million people play without knowing that they're even touching NFTs, but experience far more value because of it."

Conclusion​

These five leaders are architecting nothing less than gaming's fundamental restructuring from extractive to cooperative economics. Their convergence on digital ownership, player empowerment, and sustainable engagement models—despite coming from different technical infrastructures and regional markets—suggests inevitable rather than speculative transformation.

The evolution from 2023's cleanup through 2024's infrastructure maturity to 2025's anticipated breakthrough follows a pattern of patient foundation-building during bear markets followed by scaled deployment during bull cycles. Their collective $300+ million in funding, 3+ billion in company valuations, 10+ million users across their platforms, and 1,000+ games in development represent not speculative positioning but years of grinding toward product-market fit.

The most compelling aspect: These leaders openly acknowledge challenges (fragmentation, platform restrictions, sustainable tokenomics, Sybil attacks, developer support gaps) rather than claiming problems are solved. This intellectual honesty, combined with demonstrated traction (Ronin's 1.6M DAU, Immutable's 2.5M Passport users, Sandbox's 580K Season 4 players, Metaplex's $9.2B economic activity), suggests the vision is grounded in reality rather than hype.

Gaming's $150 billion economy built on extraction and zero-sum mechanics faces competition from a model offering ownership, cooperative economics, creator empowerment, and genuine digital property rights. The leaders profiled here aren't predicting this transformation—they're building it, one game, one player, one community at a time. Whether it takes five years or fifteen, the direction appears set: gaming's future runs through true digital ownership, and these five leaders are charting the course.

The GameFi market reached $18-19 billion in 2024 with projections to hit $95-200 billion by 2034, yet faces a brutal reality check: 93% of projects fail and 60% of users abandon games within 30 days. This paradox defines the current state—massive growth potential colliding with fundamental sustainability challenges. The industry is pivoting from speculative "play-to-earn" models that attracted mercenary users toward "play-and-earn" experiences prioritizing entertainment value with blockchain benefits as secondary. Success in 2025 requires understanding five distinct user personas, designing for multiple "jobs to be done" beyond just earning, implementing sustainable tokenomics that don't rely on infinite user growth, and learning from both the successes of Axie Infinity's $4+ billion in NFT sales and the failures of its 95% user collapse. The winners will be products that abstract blockchain complexity, deliver AAA-quality gameplay, and build genuine communities rather than speculation farms.

Target user personas: Who's actually playing GameFi​

The GameFi audience spans from Filipino pedicab drivers earning rent money to wealthy crypto investors treating games as asset portfolios. Understanding these personas is critical for product-market fit.

The Income Seeker represents 35-40% of users​

This persona dominates Southeast Asia—particularly the Philippines, Vietnam, and Indonesia—where 40% of Axie Infinity's peak users originated. These are 20-35 year olds from below-minimum-wage households who view GameFi as legitimate employment, not entertainment. They invest 6-10 hours daily treating gameplay as a full-time job, often entering through scholarship programs where guilds provide NFTs in exchange for 30-75% of earnings. During Axie's peak, Filipino players earned $400-1,200 monthly compared to $200 minimum wage, enabling life-changing outcomes like paying university fees and buying groceries. However, this persona is extremely vulnerable to token volatility—when SLP crashed 99% from peak, earnings fell below minimum wage and retention collapsed. Their pain points center on high entry costs ($400-1,000+ for starter NFTs at peak), complex crypto-to-fiat conversion, and unsustainable tokenomics. For product managers, this persona requires free-to-play or scholarship models, mobile-first design, local language support, and transparent earning projections. The scholarship model pioneered by Yield Guild Games (30,000+ scholarships) democratizes access but raises exploitation concerns given the 10-30% commission structure.

The Gamer-Investor accounts for 25-30% of users​

These are 25-40 year old professionals from developed markets—US, South Korea, Japan—with middle to upper-middle class incomes and college education. They're experienced core gamers seeking both entertainment value and financial returns, comfortable navigating DeFi ecosystems across 3.8 Layer 1 chains and 3.6 Layer 2 chains on average. Unlike Income Seekers, they directly purchase premium NFTs ($1,000-10,000+ single investments) and diversify portfolios across 3-5 games. They invest 2-4 hours daily and often act as guild owners rather than scholars, managing others' gameplay. Their primary frustration is poor gameplay quality in most GameFi titles—they want AAA production values matching traditional games, not "spreadsheets with graphics." This persona is critical for sustainability because they provide capital inflows and longer-term engagement. Product managers should focus on compelling gameplay mechanics, high production values, sophisticated tokenomics transparency, and governance participation through DAOs. They're willing to pay premium prices but demand quality and won't tolerate pay-to-win dynamics, which ranks as the top reason players quit traditional games.

The Casual Dabbler makes up 20-25% of users​

Global and primarily mobile-first, these 18-35 year old students and young professionals are motivated by curiosity, FOMO, and the "why not earn while playing?" value proposition. They invest only 30 minutes to 2 hours daily with inconsistent engagement patterns. This persona increasingly discovers GameFi through Telegram mini-apps like Hamster Kombat (239 million users in 3 months) and Notcoin ($1.6 billion market cap), which offer zero-friction onboarding without wallet setup. However, they exhibit the highest churn rate—60%+ abandon within 30 days—because poor UX/UI (cited by 53% as biggest challenge), complex wallet setup (deters 11%), and repetitive gameplay drive them away. The discovery method matters: 60% learn about GameFi from friends and family, making viral mechanics essential. For product managers, this persona demands simplified onboarding (hosted wallets, no crypto knowledge required), social features for friend recruitment, and genuinely entertaining gameplay that works as a standalone experience. The trap is designing purely for token farming, which attracts this persona temporarily but fails to retain them beyond airdrops—Hamster Kombat lost 86% of users post-airdrop (300M to 41M).

The Crypto Native comprises 10-15% of users​

These 22-45 year old crypto professionals, developers, and traders from global crypto hubs possess expert-level blockchain knowledge and variable gaming backgrounds. They view GameFi as an asset class and technological experiment rather than primary entertainment, seeking alpha opportunities, early adoption status, and governance participation. This persona trades high-frequency, provides liquidity, stakes governance tokens, and participates in DAOs (25% actively engage in governance). They're sophisticated enough to analyze smart contract code and tokenomics sustainability, making them the harshest critics of unsustainable models. Their investment approach focuses on high-value NFTs, land sales, and governance tokens rather than grinding for small rewards. Product managers should engage this persona for credibility and capital but recognize they're often early exiters—flipping positions before mainstream adoption. They value innovative tokenomics, transparent on-chain data, and utility beyond speculation. Major pain points include unsustainable token emissions, regulatory uncertainty, bot manipulation, and rug pulls. This persona is essential for initial liquidity and word-of-mouth but represents too small an audience (4.5 million crypto gamers vs 3 billion total gamers) to build a mass-market product around exclusively.

The Community Builder represents 5-10% of users​

Guild owners, scholarship managers, content creators, and influencers—these 25-40 year olds with middle incomes invest 4-8 hours daily managing operations rather than playing directly. They built the infrastructure enabling Income Seekers to participate, managing anywhere from 10 to 1,000+ players and earning through 10-30% commissions on scholar earnings. At Axie's 2021 peak, successful guild leaders earned $20,000+ monthly. They create educational content, strategy guides, and market analysis while using rudimentary tools (often Google Sheets for scholar management). This persona is critical for user acquisition and education—Yield Guild Games managed 5,000+ scholars with 60,000 on waitlist—but faces sustainability challenges as token prices affect entire guild economics. Their pain points include lack of guild CRM tools, performance tracking difficulty, regulatory uncertainty around taxation, and the sustainability concerns of the scholar economy model (criticized as digital-age "gold farming"). Product managers should build tools specifically for this persona—guild dashboards, automated payouts, performance analytics—and recognize they serve as distribution channels, onboarding infrastructure, and community evangelists.

Jobs to be done: What users hire GameFi products for​

GameFi products are hired to do multiple jobs simultaneously across functional, emotional, and social dimensions. Understanding these layered motivations explains why users adopt, engage with, and ultimately abandon these products.

Functional jobs: Practical problems being solved​

The primary functional job for Southeast Asian users is generating income when traditional employment is unavailable or insufficient. During COVID-19 lockdowns, Axie Infinity players in the Philippines earned $155-$600 monthly compared to $200 minimum wage, with earnings enabling concrete outcomes like paying for mothers' medication and children's school fees. One 26-year-old line cook made $29 weekly playing, and professional players bought houses. This represents a genuine economic opportunity in markets with 60%+ unbanked populations and minimum daily wages of $7-25 USD. However, the job extends beyond primary income to supplementary earnings—content moderators playing 2 hours daily earned $155-$195 monthly (nearly half their salary) for grocery money and electricity bills. For developed market users, the functional job shifts to investment and wealth accumulation through asset appreciation. Early Axie adopters bought teams for $5 in 2020; by 2021 prices reached $50,000+ for starter teams. Virtual land in Decentraland and The Sandbox sold for substantial amounts, and the guild model emerged where "managers" own multiple teams and rent to "scholars" for 10-30% commission. The portfolio diversification job involves gaining crypto asset exposure through engaging activity rather than pure speculation, accessing DeFi features (staking, yield farming) embedded in gameplay. GameFi competes with traditional employment (offering flexible hours, work-from-home, no commute), traditional gaming (offering real money earnings), cryptocurrency trading (offering more engaging skill-based earnings), and gig economy work (offering more enjoyable activity for comparable pay).

Emotional jobs: Feelings and experiences being sought​

Achievement and mastery drive engagement as users seek to feel accomplished through challenging gameplay and visible progress. Academic research shows "advancement" and "achievement" as top gaming motivations, satisfied through breeding optimal Axies, winning battles, climbing leaderboards, and progression systems creating dopamine-driven engagement. One study found 72.1% of players experienced mood uplift during play. However, the grinding nature creates tension—players describe initial happiness followed by "sleepiness and stress of the game." Escapism and stress relief became particularly important during COVID lockdowns, with one player noting being "protected from virus, play cute game, earn money." Academic research confirms escapism as a major motivation, though studies show gamers with escapism motivation had higher psychological issue risk when external problems persisted. The excitement and entertainment job represents the 2024 industry shift from pure "play-to-earn" to "play-and-earn," with criticism that early GameFi projects prioritized "blockchain gimmicks over genuine gameplay quality." AAA titles launching in 2024-2025 (Shrapnel, Off The Grid) focus on compelling narratives and graphics, recognizing players want fun first. Perhaps most importantly, GameFi provides hope and optimism about financial futures. Players express being "relentlessly optimistic" about achieving goals, with GameFi offering a bottom-up voluntary alternative to Universal Basic Income. The sense of autonomy and control over financial destiny—rather than dependence on employers or government—emerges through player ownership of assets via NFTs (versus traditional games where developers control everything) and decentralized governance through DAO voting rights.

Social jobs: Identity and social needs being met​

Community belonging proves as important as financial returns. Discord servers reach 100,000+ members, guild systems like Yield Guild Games manage 8,000 scholars with 60,000 waitlists, and scholarship models create mentor-mentee relationships. The social element drives viral growth—Telegram mini-apps leveraging existing social graphs achieved 35 million (Notcoin) and 239 million (Hamster Kombat) users. Community-driven development is expected in 50%+ of GameFi projects by 2024. Early adopter and innovator status attracts participants wanting to be seen as tech-savvy and ahead of mainstream trends. Web3 gaming attracts "tech enthusiasts" and "crypto natives" beyond traditional gamers, with first-mover advantage in token accumulation creating status hierarchies. The wealth display and "flex culture" job manifests through rare NFT Axies with "limited-edition body parts that will never be released again" serving as status symbols, X-integrated leaderboards letting "players flex their rank to mainstream audience," and virtual real estate ownership demonstrating wealth. Stories of buying houses and land shared virally reinforce this job. For Income Seekers, the provider and family support role proves especially powerful—an 18-year-old breadwinner supporting family after father's COVID death, players paying children's school fees and parents' medication. One quote captures it: "It's food on the table." The helper and mentor status job emerges through scholarship models where successful players provide Axie NFTs to those who can't afford entry, with community managers organizing and training new players. Finally, GameFi enables gamer identity reinforcement by bridging traditional gaming culture with financial responsibility, legitimizing gaming as a career path and reducing stigma of gaming as "waste of time."

Progress users are trying to make in their lives​

Users aren't hiring "blockchain games"—they're hiring solutions to make specific life progress. Financial progress involves moving from "barely surviving paycheck to paycheck" to "building savings and supporting family comfortably," from "dependent on unstable job market" to "multiple income streams with more control," and from "unable to afford children's education" to "paying school fees and buying digital devices." Social progress means shifting from "gaming seen as waste of time" to "gaming as legitimate income source and career," from "isolated during pandemic" to "connected to global community with shared interests," and from "consumer in gaming ecosystem" to "stakeholder with ownership and governance rights." Emotional progress involves transforming from "hopeless about financial future" to "optimistic about wealth accumulation possibilities," from "time spent gaming feels guilty" to "productive use of gaming skills," and from "passive entertainment consumer" to "active creator and earner in digital economy." Identity progress encompasses moving from "just a player" to "investor, community leader, entrepreneur," from "late to crypto" to "early adopter in emerging technology," and from "separated from family (migrant worker)" to "at home while earning comparable income." Understanding these progress paths—rather than just product features—is essential for product-market fit.

Monetization models: How GameFi companies make money​

GameFi monetization has evolved significantly from the unsustainable 2021 boom toward diversified revenue streams and balanced tokenomics. Successful projects in 2024-2025 demonstrate multiple revenue sources rather than relying solely on token speculation.

Play-to-earn mechanics have transformed toward sustainability​

The original play-to-earn model rewarded players with cryptocurrency tokens for achievements, which could be traded for fiat currency. Axie Infinity pioneered the dual-token system with AXS (governance, capped supply) and SLP (utility, inflationary), where players earned SLP through battles and quests then burned it for breeding. At peak in 2021, players earned $400-1,200+ monthly, but the model collapsed as SLP crashed 99% due to hyperinflation and unsustainable token emissions requiring constant new player influx. The 2024 resurgence shows how sustainability is achieved: Axie now generates $3.2M+ annually in treasury revenue (averaging $330K monthly) with 162,828 monthly active users through diversified sources—4.25% marketplace fees on all NFT transactions, breeding fees paid in AXS/SLP, and Part Evolution fees (75,477 AXS earned). Critically, the SLP Stability Fund created 0.57% annualized deflation in 2024, with more tokens burned than minted for the first time. STEPN's move-to-earn model with GST (unlimited supply, in-game rewards) and GMT (6 billion fixed supply, governance) demonstrated the failure mode—GST reached $8-9 at peak but collapsed due to hyperinflation from oversupply and Chinese market restrictions. The 2023-2024 evolution emphasizes "play-and-own" over "play-to-earn," stake-to-play models where players stake tokens to access features, and fun-first design where games must be enjoyable independent of earning potential. Balanced token sinks—requiring spending for upgrades, breeding, repairs, crafting—prove essential for sustainability.

NFT sales generate revenue through primary and secondary markets​

Primary NFT sales include public launches, thematic partnerships, and land drops. The Sandbox's primary LAND sales drove 17.3% quarter-over-quarter growth in Q3 2024, with LAND buyer activity surging 94.11% quarter-over-quarter in Q4 2024. The platform's market cap reached $2.27 billion at December 2024 peak, with only 166,464 LAND parcels ever existing (creating scarcity). The Sandbox's Beta launch generated $1.3M+ in transactions in one day. Axie Infinity's Wings of Nightmare collection in November 2024 drove $4M treasury growth, while breeding mechanics create deflationary pressure (116,079 Axies released for materials, net reduction of 28.5K Axies in 2024). Secondary market royalties provide ongoing revenue through automated smart contracts using the ERC-2981 standard. The Sandbox implements a 5% total fee on secondary sales, split 2.5% to the platform and 2.5% to the original NFT creator, providing continuous creator income. However, marketplace dynamics shifted in 2024 as major platforms (Magic Eden, LooksRare, X2Y2) made royalties optional, reducing creator income significantly from 2022-2024 peaks. OpenSea maintains enforced royalties for new collections using filter registry, while Blur honors 0.5% minimum fees on immutable collections. The lands segment holds over 25% of NFT market revenue (2024's dominant category), with total NFT segments accounting for 77.1% of GameFi usage. This marketplace fragmentation around royalty enforcement creates strategic considerations for which platforms to prioritize.

In-game token economics balance emissions with sinks​

Dual-token models dominate successful projects. Axie Infinity's AXS (governance) has fixed supply, staking rewards, governance voting rights, and requirements for breeding/upgrades, while SLP (utility) has unlimited supply earned through gameplay but is burned for breeding and activities, managed by SLP Stability Fund to control inflation. AXS joined Coinbase 50 Index in 2024 as a top gaming token. The Sandbox uses a single-token model (3 billion SAND capped supply, full dilution expected 2026) with multiple utilities: purchasing LAND and assets, staking for passive yields, governance voting, transaction medium, and premium content access. The platform implements 5% fees on all transactions split between platform and creators, with 50% distribution to Foundation (staking rewards, creator funds, P2E prizes) and 50% to Company. Token sinks are critical for sustainability, with effective burn mechanisms including repairs and maintenance (sneaker durability in STEPN), leveling and upgrades (Part Evolution in Axie burned 75,477 AXS), breeding/minting NFT creation costs (StarSharks burns 90% of utility tokens from blind box sales), crafting and combining (Gem/Catalyst systems in The Sandbox), land development (staking DEC in Splinterlands for upgrades), and continuous marketplace fee burns. Splinterlands' 2024 innovation requiring DEC staking for land upgrades creates strong demand. Best practices emerging for 2024-2025 include ensuring token sinks exceed faucets (emissions), time-locked rewards (Illuvium's sILV prevents immediate dumping), seasonal mechanics forcing regular purchases, NFT durability limiting earning potential, and negative-sum PvP where players willingly consume tokens for entertainment.

Transaction fees and marketplace commissions provide predictable revenue​

Platform fees vary by game. Axie Infinity charges 4.25% on all in-game purchases (land, NFT trading, breeding) as Sky Mavis's primary monetization source, plus variable breeding costs requiring both AXS and SLP tokens. The Sandbox implements 5% on all marketplace transactions, split 50-50 between platform (2.5%) and NFT creators (2.5%), plus premium NFT sales, subscriptions, and services. Gas fee mitigation became essential as 80% of GameFi platforms incorporated Layer 2 solutions by 2024. Ronin Network (Axie's custom sidechain) provides minimal gas fees through 27 validator nodes, while Polygon integration (The Sandbox) reduced fees significantly. TON blockchain enables minimal fees for Telegram mini-apps (Hamster Kombat, Notcoin), though the trade-off matters—Manta Pacific's Celestia integration reduced gas fees but decreased revenue by 70.2% quarter-over-quarter in Q3 2024 (lower fees increase user activity but reduce protocol revenue). Smart contract fees automate royalty payments (ERC-2981 standard), breeding contract fees, staking/unstaking fees, and land upgrade fees. Marketplace commissions vary: OpenSea charges 2.5% platform fee plus creator royalties (if enforced), Blur charges 0.5% minimum on immutable collections using aggressive zero-fee trading for user acquisition, Magic Eden evolved from enforced to optional royalties with 25% of protocol fees distributed to creators as compromise, while The Sandbox's internal marketplace maintains 5% with 2.5% automatic creator royalty.

Diversified revenue streams reduce reliance on speculation​

Land sales dominate with over 25% of NFT market revenue in 2024, representing the fastest-growing digital asset class. The Sandbox's 166,464 capped LAND parcels create scarcity, with developed land enabling creators to earn 95% of SAND revenue while maintaining 2.5% on secondary sales. Corporate interest from JPMorgan, Samsung, Gucci, and Nike established virtual presence, with high-traffic zones commanding premium prices and prime locations generating $5,000+/month in rental income. Breeding fees create token sinks while balancing new NFT supply—Axie's breeding requires AXS + SLP with costs increasing each generation, while Part Evolution requires Axie sacrifices generating 75,477 AXS in treasury revenue. Battle passes and seasonal content drive engagement and revenue. Axie's Bounty Board system (April 2024) and Coinbase Learn and Earn partnership (June 2024) drove 691% increase in Monthly Active Accounts and 80% increase in Origins DAU, while competitive seasons offer AXS prize pools (Season 9: 24,300 AXS total). The Sandbox's Alpha Season 4 in Q4 2024 reached 580,778 unique players, 49 million quests completed, and 1.4 million hours of gameplay, distributing 600,000 SAND to 404 unique creators and running Builders' Challenge with 1.5M SAND prize pool. Sponsorships and partnerships generate significant revenue—The Sandbox has 800+ brand partnerships including Atari, Adidas, Gucci, and Ralph Lauren, with virtual fashion shows and corporate metaverse lounges. Revenue models include licensing fees, sponsored events, and virtual advertising billboards in high-traffic zones.

The scholarship guild model represents a unique revenue stream where guilds own NFTs and lend to players unable to afford entry. Yield Guild Games provided 30,000+ scholarships with standard revenue-sharing of 70% scholar, 20% manager, 10% guild (though some guilds use 50-50 splits). MetaGaming Guild expanded Pixels scholarship from 100 to 1,500 slots using a 70-30 model (70% to scholars hitting 2,000 BERRY daily quota), while GuildFi aggregates scholarships from multiple sources. Guild monetization includes passive income from NFT lending, token appreciation from guild tokens (YGG, GF, etc.), management fees (10-30% of player earnings), and investment returns from early game backing. At 2021 peak, guild leaders earned $20,000+ monthly, enabling life-changing impact in developing nations where scholarship players earn $20/day versus previous $5/day in traditional work.

Major players: Leading projects, platforms, and infrastructure​

The GameFi ecosystem consolidated around proven platforms and experienced significant evolution from speculative 2021 peaks toward quality-focused 2024-2025 landscape.

Top games span casual to AAA experiences​

Lumiterra leads with 300,000+ daily active unique wallets on Ronin (July 2025), ranking #1 by onchain activity through MMORPG mechanics and MegaDrop campaign. Axie Infinity stabilized around 100,000 daily active unique wallets after pioneering play-to-earn, generating $4+ billion cumulative NFT sales despite losing 95% of users from peak. The dual-token AXS/SLP model and scholarship program defined the industry, though unsustainable tokenomics caused the collapse before 2024 resurgence with improved sustainability. Alien Worlds maintains ~100,000 daily active unique wallets on WAX blockchain through mining-focused metaverse with strong retention, while Boxing Star X by Delabs reaches ~100,000 daily active unique wallets through Telegram Mini-App integration on TON/Kaia chains showing strong growth since April 2025. MapleStory N by Nexon represents traditional gaming entering Web3 with 50,000-80,000 daily active unique wallets on Avalanche's Henesys chain as the biggest 2025 blockchain launch bringing AAA IP credibility. Pixels peaked at 260,000+ daily users at launch with $731M market cap and $1.4B trading volume in February 2024, utilizing dual tokens (PIXEL + BERRY) after migrating from Polygon to Ronin and bringing 87K addresses to the platform. The Sandbox built 5+ million user wallets and 800+ brand partnerships (Atari, Snoop Dogg, Gucci) using SAND token as the leading metaverse platform for user-generated content and virtual real estate. Guild of Guardians on Immutable reached 1+ million pre-registrations and top 10 on iOS/Android stores, driving Immutable's 274% daily unique active wallets increase in May 2024.

The Telegram phenomenon disrupted traditional onboarding with Hamster Kombat reaching 239 MILLION users in 3 months through tap-to-earn mechanics on TON blockchain, though losing 86% post-airdrop (300M to 41M) highlights retention challenges. Notcoin achieved $1.6+ billion market cap as #2 gaming token by market cap with zero crypto onboarding friction, while Catizen built multi-million user base with successful token airdrop. Other notable games include Illuvium (AAA RPG, highly anticipated), Gala Games (multi-game platform), Decentraland (metaverse pioneer with MANA token), Gods Unchained (leading trading card game on Immutable), Off The Grid (console/PC shooter on Gunz chain), Splinterlands (established TCG with 6-year track record on Hive), and Heroes of Mavia (2.6+ million users with 3-token system on Ronin).

Blockchain platforms compete on speed, cost, and developer tools​

Ronin Network by Sky Mavis holds #1 gaming blockchain position in 2024 with 836K daily unique active wallets peak, hosting Axie Infinity, Pixels, Lumiterra, and Heroes of Mavia. Purpose-built for gaming with sub-second transactions, low fees, and proven scale, Ronin serves as a migration magnet. Immutable (X + zkEVM) achieved fastest growth at 71% year-over-year, surpassing Ronin in late 2024 with 250,000+ monthly active users, 5.5 million Passport signups, $40M total value locked, 250+ games (most in industry), 181 new games in 2024, and 1.1 million daily transactions (414% quarter-over-quarter growth). The dual solution—Immutable X on StarkWare and zkEVM on Polygon—offers zero gas fees for NFTs, EVM compatibility, best developer tools, and major partnerships (Ubisoft, NetMarble). Polygon Network maintains 550K daily unique active wallets, 220M+ addresses, and 2.48B transactions with Ethereum security, massive ecosystem, corporate partnerships, and multiple scaling solutions providing strong metaverse presence. Solana captures approximately 50% of GameFi application fees in Q1 2025 through highest throughput, lowest costs, fast finality, and trading-focused ecosystem. BNB Chain (+ opBNB) replaced Ethereum as volume leader, with opBNB providing $0.0001 gas fees (lowest) and 97 TPS average (highest), offering cost-effectiveness and strong Asian market presence. TON (The Open Network) integrated with Telegram's 700M+ users enabling Hamster Kombat, Notcoin, and Catizen with zero-friction onboarding, social integration, and viral growth potential. Other platforms include Ethereum (20-30% trading share, Layer 2 foundation), Avalanche (customizable subnets, Henesys chain), NEAR (human-readable accounts), and Gunz (Off The Grid dedicated chain).

Traditional gaming giants and VCs shape the future​

Animoca Brands dominates as #1 most active investor with portfolio of 400+ companies, $880M raised over 22 rounds (latest $110M from Temasek, Boyu, GGV), key investments in Axie, Sandbox, OpenSea, Dapper Labs, and Yield Guild Games, plus Animoca Ventures $800M-$1B fund with 38+ investments in 2024 (most active in space). GameFi Ventures based in Hong Kong manages portfolio of 21 companies focusing on seed rounds and co-investing with Animoca, while Andreessen Horowitz (a16z) deployed $40M to CCP Games from multi-billion crypto fund. Other major VCs include Bitkraft (gaming/esports focus), Hashed (South Korea, Asian market), NGC Ventures ($100M Fund III, 246 portfolio companies), Paradigm (infrastructure focus), Infinity Ventures Crypto ($70M fund), Makers Fund, and Kingsway Capital.

Ubisoft leads traditional gaming entry with Champions Tactics: Grimoria Chronicles (October 2024 on Oasys) and Might & Magic: Fates (2025 on Immutable), featuring partnerships with Immutable, Animoca, Oasys, and Starknet. The studio sold 10K Warlords and 75K Champions NFTs (sold out) with potential to leverage 138 million players. Square Enix launched Symbiogenesis (Arbitrum/Polygon, 1,500 NFTs) and Final Fantasy VII NFTs, pursuing "blockchain entertainment/Web3" strategy through Animoca Brands Japan partnership. Nexon delivered MapleStory N as major 2025 launch with 50K-80K daily users, while Epic Games shifted policy to welcome P2E games in late 2024, hosting Gods Unchained and Striker Manager 3. CCP Games (EVE Online) raised $40M (a16z lead) for new AAA EVE Web3 game. Additional activity includes Konami (Project Zircon, Castlevania), NetMarble (Immutable partnership, MARBLEX), Sony PlayStation (exploring Web3), Sega, Bandai Namco (research phase), and The Pokémon Company (exploring). Industry data shows 29 of 40 largest gaming companies exploring Web3.

Infrastructure providers enable ecosystem growth​

Immutable Passport leads with 5.5 million signups (industry leading), providing seamless Web3 onboarding and game integration, while MetaMask serves 100M+ users as most popular Ethereum wallet with new Stablecoin Earn feature. Others include Trust Wallet, Coinbase Wallet, Phantom (Solana), and WalletConnect. Enjin SDK provides dedicated NFT blockchain with Unity integration, ENJ token (36.2% staking APY), and comprehensive tools (Wallet, Platform, Marketplace, Beam) plus Efinity Matrixchain for cross-chain functionality. ChainSafe Gaming (web3.unity) offers open-source Unity SDK with C#, C++, Blueprints support as premier Unity-blockchain tool with AAA studio adoption. Venly provides multi-chain wallet API and Unity/Unreal plugins with cross-platform toolkit. Others include Moralis Unity SDK, Stardust (API), Halliday, GameSwift (complete platform), Alchemy (infrastructure), and Thirdweb (smart contracts). Game engines include Unity (most popular for Web3 with SDKs from Enjin, ChainSafe, Moralis, Venly), Unreal Engine (AAA graphics, Epic Games now accepts Web3, Web3.js integration), and Godot (open-source, flexible blockchain integration).

DappRadar serves as industry standard tracking 35+ blockchains, 2,000+ games with real-time rankings as primary discovery platform. Footprint Analytics indexes 20+ blockchains, 2,000+ games with deep on-chain analysis and bot detection (developing), used by CoinMarketCap and DeGame. Nansen provides on-chain intelligence with wallet profiling and regular GameFi reports. DeGame covers 3,106 projects across 55+ blockchains with player-focused discovery. Others include Messari, CryptoSlam, and GameFi.org. Middleware and launchpads include EnjinStarter (80+ successful IDOs, $6 minimum stake, multi-chain support), GameFi.org Launchpad (IDO platform with KYC integrated), and Polygon Studios/Immutable Platform (complete development suites).

Market dynamics and strategic considerations​

The GameFi market in 2024-2025 represents a critical inflection point, transitioning from speculative hype toward sustainable product-market fit with clear opportunities and severe challenges requiring strategic navigation.

The shift toward quality and sustainability defines success​

The pure play-to-earn model collapsed spectacularly—Axie Infinity's 95% user decline, SLP's 99% crash, and the industry's 93% project failure rate proved that attracting mercenary users seeking quick profits creates unsustainable token economies with hyperinflation and Ponzi-scheme dynamics. The 2024-2025 evolution prioritizes "play-and-earn" and "play-to-own" models where gameplay quality comes first with earning as secondary benefit, entertainment value matters over financial speculation, and long-term engagement trumps extraction mechanics. This shift responds to data showing the top reason players quit is games becoming "too pay-to-win" and that 53% cite poor UX/UI as the biggest barrier. The emerging "Web2.5 mullet" strategy—mainstream free-to-play mechanics and UX on surface with blockchain features abstracted away or hidden, listed in traditional app stores (Apple, Google now allowing certain Web3 games), and onboarding requiring zero crypto knowledge—enables mainstream adoption. AAA quality games with 2-5 year development cycles, indie games with compelling gameplay loops, and traditional gaming studios entering space (Ubisoft, Epic Games, Animoca) represent the maturation of production values to compete with traditional gaming's 3.09 billion players worldwide versus only 4.5 million daily active Web3 gamers.

Massive opportunities exist in underserved segments​

True Web2 gamers represent the biggest opportunity—3.09B gamers worldwide versus 4.5M daily active Web3 gamers, with 52% not knowing what blockchain games are and 32% having heard of them but never played. The strategy requires abstracting blockchain away completely, marketing as normal games, and onboarding without requiring crypto knowledge or wallets initially. Mobile-first markets offer untapped potential with 73% of global gaming audience on mobile, Southeast Asia and Latin America being smartphone-first with lower entry barriers, and lower-cost blockchains (Solana, Polygon, opBNB) enabling mobile accessibility. The content creator economy remains underutilized—creator-owned economies with fair royalties, NFT-based asset creation and trading, user-generated content with blockchain ownership, and platforms that enforce creator royalties unlike OpenSea controversies. Subscription and hybrid monetization models address over-reliance on token mints and marketplace fees, with subscription models (à la Coinsub) providing predictable revenue, blending free-to-play + in-app purchases + blockchain rewards, and targeting "whale economy" with staking and premium memberships. Emerging niches include fully on-chain games (all logic and state on blockchain enabled by account abstraction wallets and better infrastructure like Dojo on Starknet and MUD on OP Stack with backing from a16z and Jump Crypto), AI-powered GameFi (50% of new projects expected to leverage AI for personalized experiences, dynamic NPCs, procedural content generation), and genre-specific opportunities in RPGs (best suited for Web3 due to character progression, economies, item ownership) and strategy games (complex economies benefit from blockchain transparency).

Retention crisis and tokenomics failures demand solutions​

The 60-90% churn within 30 days defines the existential crisis, with 99% drop-off threshold marking failure per CoinGecko and Hamster Kombat's 86% loss (300M to 41M users) after airdrop exemplifying the problem. Root causes include lack of long-term incentives beyond token speculation, poor gameplay mechanics, unsustainable tokenomics with inflation eroding value, bots and mercenary behavior, and airdrop farming without genuine engagement. Solution pathways require dynamic loot distribution, staking-based rewards, skill-based progression, player-controlled economies via DAOs, and immersive storytelling with compelling game loops. Common tokenomics pitfalls include hyperinflation (excessive token minting crashes value), death spirals (declining players → lower demand → price crash → more players leave), pay-to-win concerns (top reason players quit traditional games), Ponzi dynamics (early adopters profit, late entrants lose), and unsustainable supply (DeFi Kingdoms' JEWEL supply expanded 500% to 500M by mid-2024). Best practices emphasize single-token economies (not dual tokens), fixed supply with deflationary mechanisms, token sinks exceeding token faucets (incentivize keeping assets in-game), tying tokens to narratives/characters/utility not just speculation, and controlling inflation through burning, staking, and crafting requirements.

UX complexity and security vulnerabilities create barriers​

Barriers identified in 2024 Blockchain Game Alliance survey show 53% cite poor UX/UI as biggest challenge, 33% cite poor gameplay experiences, and 11% are deterred by wallet setup complexity. Technical literacy requirements include wallets, private keys, gas fees, and DEX navigation. Solutions demand hosted/custodial wallets managed by game (users don't see private keys initially), gasless transactions through Layer 2 solutions, fiat onramps, Web2-style login (email/social), and progressive disclosure of Web3 features. Security risks include smart contract vulnerabilities (immutable code means bugs can't be easily fixed), phishing attacks and private key theft, bridge exploits (Ronin Network $600M hack in 2022), and rug pulls with fraud (decentralized means less oversight). Mitigation requires comprehensive smart contract audits (Beosin, CertiK), bug bounty programs, insurance protocols, user education on wallet security, and multi-sig requirements for treasury. The regulatory landscape remains unclear—CyberKongz litigation classified ERC-20 tokens as securities, China bans GameFi entirely, South Korea bans converting game currency to cash (2004 law), Japan has restrictions, US has bipartisan proposals with mid-2023 legislation expected, and at least 20 countries predicted to have GameFi frameworks by end 2024. Implications require extensive disclosure and KYC, may restrict US participation, necessitate legal teams from day one, demand token design considering securities law, and navigate gambling regulations in some jurisdictions.

Product managers must prioritize execution and community​

Web3 product management demands 95/5 execution over vision split (versus Web2's 70/30) because the market moves too fast for long-term strategic planning, vision lives in whitepapers (done by technical architects), speed of iteration matters most, and market conditions change weekly. This means quick specs over Telegram with developers, launch/measure/iterate rapidly, build hype on Twitter/Discord in real-time, QA carefully but ship fast, and remember smart contract audits are critical (can't patch easily). Product managers must wear many hats with ultra-versatile skill sets including user research (Discord, Twitter listening), data analysis (Dune Analytics, on-chain metrics), UX/UI design (sketch flows, tokenomics), partnership/BD (protocol integrations, guilds), marketing (blogs, Twitter, memes), community management (AMAs, Discord moderation), growth hacking (airdrops, quests, referrals), tokenomics design, and understanding regulatory landscape. Teams are small with roles not unbundled like Web2.

Community-first mindset proves essential—success equals thriving community not just revenue metrics, community owns and governs (DAOs), direct interaction expected (Twitter, Discord), transparency paramount (all on-chain), with the maxim "if community fails, you're NGMI (not gonna make it)." Tactics include regular AMAs and town halls, user-generated content programs, creator support (tools, royalties), guild partnerships, governance tokens and voting, plus memes and viral content. Prioritizing fun gameplay is non-negotiable—players must enjoy the game intrinsically, earning is secondary to entertainment, compelling narrative/characters/worlds matter, tight game loops (not tedious grinding), and polish/quality (compete with Web2 AAA). Avoid games that are "spreadsheets with graphics," pure economic simulators, pay-to-win dynamics, and repetitive boring tasks for token rewards. Understanding tokenomics deeply requires critical knowledge of supply/demand dynamics, inflation/deflation mechanisms, token sinks versus faucets, staking/burning/vesting schedules, liquidity pool management, and secondary market dynamics. Security is paramount because smart contracts are immutable (bugs can't be easily fixed), hacks result in permanent loss, every transaction involves funds (wallets don't separate game from finance), and exploits can drain entire treasury—requiring multiple audits, bug bounties, conservative permissions, multi-sig wallets, incident response plans, and user education.

Winning strategies for 2025 and beyond​

Successful GameFi products in 2025 will balance gameplay quality above all else (fun over financialization), community engagement and trust (build loyal authentic fan base), sustainable tokenomics (single token, deflationary, utility-driven), abstract blockchain complexity (Web2.5 approach for onboarding), security first (audits, testing, conservative permissions), hybrid monetization (free-to-play + in-app purchases + blockchain rewards), traditional distribution (app stores not just DApp browsers), data discipline (track retention and lifetime value not vanity metrics), speed of execution (ship/learn/iterate faster than competition), and regulatory compliance (legal from day one). Common pitfalls to avoid include tokenomics over gameplay (building DeFi protocol with game graphics), dual/triple token complexity (confusing, hard to balance, inflation-prone), pay-to-win dynamics (top reason players quit), pure play-to-earn model (attracts mercenaries not genuine players), DAO-led development (bureaucracy kills creativity), ignoring Web2 gamers (targeting only 4.5M crypto natives versus 3B gamers), NFT speculation focus (pre-sales without product), poor onboarding (requiring wallet setup and crypto knowledge upfront), insufficient smart contract audits (hacks destroy projects permanently), neglecting security ("approve all" permissions, weak key management), ignoring regulations (legal issues can shut down project), no go-to-market strategy ("build it and they will come" doesn't work), vanity metrics (volume ≠ success; focus on retention/DAU/lifetime value), poor community management (ghosting Discord, ignoring feedback), launching too early (unfinished game kills reputation), fighting platform incumbents (Apple/Google bans isolate you), ignoring fraud/bots (airdrop farmers and Sybil attacks distort metrics), no token sinks (all faucets, no utility equals hyperinflation), and copying Axie Infinity (that model failed; learn from it).

The path forward requires building incredible games first (not financial instruments), using blockchain strategically not dogmatically, making onboarding invisible (Web2.5 approach), designing sustainable economics (single token, deflationary), prioritizing community and trust, moving fast and iterating constantly, securing everything meticulously, and staying compliant with evolving regulations. The $95-200 billion market size projections are achievable—but only if the industry collectively shifts from speculation to substance. The next 18 months will separate genuine innovation from hype, with product managers who combine Web2 gaming expertise with Web3 technical knowledge, execute ruthlessly, and keep players at the center building the defining products of this era. The future of gaming may indeed be decentralized, but it will succeed by being first and foremost fun.

In 2021, NFTs were mostly about flexing JPEGs. In 2025, the most interesting work is quieter: game studios using NFTs for player-owned items, luxury houses stitching them into digital product passports, and brands folding tokens into loyalty and access. Even mainstream explainers now frame NFTs as infrastructure for ownership and provenance—not just collectibles (Encyclopedia Britannica).

Below is a field guide to the use cases that have real traction (and a few that learned hard lessons), plus a practical checklist if you’re building.

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Gaming: Where “I Own This” Actually Matters​

Gaming is a natural fit for NFTs because players already understand the value of scarce digital items. Instead of being trapped in one game's silo, NFTs add portable ownership and create opportunities for secondary liquidity.

• Production chains built for games: The infrastructure has matured significantly. Immutable launched a Polygon-powered zkEVM in 2024, designed to make asset creation, trading, and on-chain logic feel native to the game loop. By the end of that year, the ecosystem had signed hundreds of titles, and its flagship game Guild of Guardians crossed one million downloads (The Block, immutable.com, PR Newswire).

• At-scale player economies: We now have proof that mainstream players will engage with NFT economies when the game is fun first. Mythical Games reports over $650 million in transactions across more than seven million registered players. Its FIFA Rivals mobile game hit one million downloads within about six weeks of launch, showing that the technology can be seamlessly integrated into familiar experiences (NFT Plazas, PlayToEarn, The Defiant).

• Major publishers are still experimenting: The industry's giants are actively involved. Ubisoft’s Champions Tactics: Grimoria Chronicles, built on the Oasys blockchain with NFT-native elements, rolled out in late 2024 and has seen continuous updates into 2025, signaling a long-term commitment to exploring the model (GAM3S.GG, Champions Tactics™ Grimoria Chronicles, Ubisoft).

Why this works: When thoughtfully integrated, NFTs enhance the existing player experience without breaking the fiction of the game world.

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Luxury & Authenticity: Digital Product Passports Go Mainstream​

For luxury brands, provenance is paramount. NFTs are becoming the backbone for verifying authenticity and tracking an item's history, moving from a niche concept to a core business tool.

• A shared backbone for provenance: The Aura Blockchain Consortium—founded by LVMH, Prada Group, Cartier (Richemont), and others—offers industry-grade tooling so that new luxury goods ship with verifiable, transferable “digital twins” (Aura Blockchain Consortium). This creates a common standard for authenticity.

• Regulatory pull, not just brand push: This trend is being accelerated by regulation. Europe’s Ecodesign for Sustainable Products Regulation (ESPR) will require digital product passports across many categories by 2030, making supply-chain transparency a legal requirement. Luxury groups are building the infrastructure to comply now (Vogue Business).

• Real deployments: This is already happening in production. Consortium members like OTB (Maison Margiela, Marni) emphasize blockchain-backed traceability and Digital Product Passports (DPPs) as a core part of their growth and sustainability strategy. Aura has highlighted active use cases at houses such as Loro Piana and others (Vogue Business, Aura Blockchain Consortium).

Why this works: Anti-counterfeiting is a fundamental need in luxury. NFTs make authenticity checks self-serve for the consumer and create a durable record of ownership that persists across resale channels.

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Ticketing & Live Events: Collectibles and Access​

Events are about status, community, and memories. NFTs provide a way to bind those intangible values to a verifiable digital token that can unlock new experiences.

• Token-gated perks at scale: Ticketmaster has rolled out features that let artists and organizers grant special access to NFT holders. A ticket stub is no longer just a piece of paper; it's a programmable membership card that can grant access to exclusive merchandise, content, or future events (Blockworks).

• On-chain souvenirs: Ticketmaster’s “digital collectibles” program gives fans proof that they attended an event, creating a new kind of digital memorabilia. These tokens can also be used to unlock future benefits or discounts, deepening the relationship between artists and fans (ticketmastercollectibles.com).

• Cautionary tale: Early experiments highlighted the risks of centralization. Coachella’s 2022 NFTs, which were tied to the now-defunct exchange FTX, infamously went dark, leaving holders with nothing. The festival has since resumed its NFT experiments with other partners in 2024, but the lesson is clear: build to avoid single points of failure (IQ Magazine, Blockworks).

Why this works: NFTs transform a one-time event into a lasting, verifiable relationship with ongoing potential for engagement.

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Loyalty & Memberships: When Tokens Replace Tiers​

Brands are exploring how tokens can make loyalty programs more flexible and engaging, moving beyond simple points systems to create portable status.

• Airlines as on-ramps: Lufthansa’s Uptrip program turns flights into digital trading cards that can be redeemed for perks like lounge access or upgrades. The cards can optionally be converted to NFTs in a self-custodial wallet, offering a gamified loyalty experience first and making the crypto aspect entirely optional (uptrip.app, Lufthansa).

• Legacy programs on blockchain rails: Some programs have been using this technology for years. Singapore Airlines’ KrisPay has used a blockchain-backed wallet since 2018 to make airline miles spendable at partner merchants—an early blueprint for interoperable rewards (Singapore Airlines).

• Consumer brands token-gate in familiar storefronts: Retailers can now use Shopify’s built-in token-gating features to reward NFT holders with exclusive product drops and community access. Adidas’ ALTS program is a prime example, using dynamic NFT traits and tokenproof verification to tie digital ownership to real-world commerce and events (Shopify, NFT Plazas, NFT Evening).

• Not everything sticks: It’s a useful reminder that loyalty is a behavior loop first and a technology second. Starbucks shuttered its Odyssey NFT beta program in March 2024, demonstrating that even a massive brand can't force a new model if it doesn't offer clear, everyday value to the user (Nation’s Restaurant News).

Why this works: The winning pattern is clear: start with utility that non-crypto users already want, then make the "NFT" aspect optional and invisible.

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Identity & Credentials: Readable Names, Non-Transferable Proofs​

NFTs are also being adapted for identity, where the goal is not to trade but to prove. This creates a foundation for user-controlled reputation and credentials.

• Human-readable identities: The Ethereum Name Service (ENS) replaces long, complex wallet addresses with human-readable names (e.g., yourname.eth). With the recent addition of L2 Primary Names, a single ENS name can now resolve cleanly across multiple networks like Arbitrum, Base, and OP Mainnet, creating a more unified digital identity (ens.domains, messari.io).

• Non-transferable credentials (SBTs): The “soulbound” token concept—tokens you can earn but cannot trade—has matured into a practical tool for issuing diplomas, professional licenses, and membership proofs. Expect to see more pilots in education and certification where provenance is key (SSRN, Webopedia).

• Beware biometric trade-offs: While "proof-of-personhood" systems are evolving quickly, they come with significant privacy risks. High-profile projects in this space have drawn scrutiny from core crypto leaders for their data collection practices, highlighting the need for careful implementation (TechCrunch).

Why this works: Identity and reputation shouldn’t be tradable. NFT variants like SBTs provide a way to build a composable, user-owned identity layer without relying on central gatekeepers.

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Creator Economy & Media: New Revenue Paths (Plus Reality Checks)​

For creators, NFTs offer a way to create scarcity, control access, and build direct financial relationships with their communities.

• Direct-to-fan music collectibles: Platforms like Sound are creating new economic models for musicians. By offering guaranteed mint rewards to artists—even on free drops—the platform reports generating revenues for artists comparable to what they would earn from billions of streams. It’s a modern reframing of the “1,000 true fans” concept for on-chain music (help.sound.xyz, sound.mirror.xyz).

• Shared IP rights—if licensed explicitly: Some NFT collections grant holders commercial rights to their art (e.g., the Bored Ape Yacht Club license), enabling a decentralized ecosystem of merchandise and media projects. The importance of legal clarity here is paramount, as reflected in recent case law and the emergence of formal licensing programs (boredapeyachtclub.com, 9th Circuit Court of Appeals).

• Not all experiments pay back: Early royalty-sharing drops, such as those facilitated by marketplaces like Royal, showed promise but delivered mixed returns. This serves as a reminder for teams to model cash flows conservatively and not rely on speculative hype (Center for a Digital Future).

Why this works: NFTs allow creators to bypass traditional intermediaries, offering new ways to monetize their work through paid mints, token-gated content, and real-world tie-ins.

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Finance: Using NFTs as Collateral (and the 2025 Cooldown)​

NFTs can also function as financial assets, primarily as collateral for loans in a growing DeFi niche.

• The mechanism: Protocols such as NFTfi allow users to borrow against their NFTs via escrowed peer-to-peer loans. The cumulative volume on these platforms has exceeded hundreds of millions of dollars, proving the model's viability (nftfi.com).

• 2025 reality check: This market is highly cyclical. After peaking around January 2024, NFT lending volumes fell by approximately 95–97% by May 2025 as the value of collateral dropped and risk appetite evaporated. Leadership in the space has also shifted from established players like Blend to newer ones. This indicates that NFT-backed lending is a useful financial tool, but it remains a niche and volatile market (The Defiant, DappRadar).

Why this works (when it does): High-value NFTs, like digital art or rare in-game assets, can be transformed into productive capital—but only if sufficient liquidity exists and risk is managed carefully.

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Philanthropy & Public Goods: Transparent Fundraising​

On-chain fundraising offers a powerful model for transparency and rapid mobilization, making it a compelling tool for charitable causes.

• UkraineDAO’s flag NFT raised roughly $6.75 million in early 2022, showcasing how quickly and transparently a global community could mobilize for a cause. Crypto donations to Ukraine more broadly crossed tens of millions of dollars within days (Decrypt, TIME).

• Quadratic funding at scale: Gitcoin continues to iterate on its model for community-matched funding rounds that support open-source software and other public goods. It represents a durable, effective pattern for resource allocation that has long outlasted the NFT hype cycles (gitcoin.co).

Why this works: On-chain rails shorten the path from philanthropic intent to real-world impact, with public ledgers providing a built-in layer of accountability.

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Patterns That Win (and Pitfalls to Avoid)​

• Start with the user story, not the token. If status, access, or provenance isn’t core to your product, an NFT won’t fix it. Starbucks Odyssey’s sunset is a potent reminder to ground loyalty programs in tangible, everyday value (Nation’s Restaurant News).
• Minimize single points of failure. Don’t architect your system around a single custodian or vendor. Coachella’s FTX fiasco shows why this is critical. Use portable standards and plan migration paths from day one (IQ Magazine).
• Design for chain-agnostic UX. Users want simple logins and consistent benefits, regardless of the underlying blockchain. ENS’s L2 identity support and Shopify's cross-chain token-gated commerce show that the future is interoperable (messari.io, Shopify).
• Use dynamic metadata when states change. Assets should be able to evolve. Dynamic NFTs (dNFTs) and standards like EIP-4906 allow metadata to change (e.g., character levels, item repairs), ensuring marketplaces and applications stay in sync (Chainlink, Ethereum Improvement Proposals).
• License IP explicitly. If your holders can commercialize the art associated with their NFTs, say so—clearly. BAYC’s terms and formal licensing program are instructive models (boredapeyachtclub.com).

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A Builder’s Checklist for NFT Utility in 2025​

• Define the job to be done. What does the token unlock that a simple database row can’t (e.g., composability, secondary markets, user custody)?
• Make crypto optional. Let users start with an email or an in-app wallet. Allow them to opt into self-custody later.
• Choose the right chain + standard. Optimize for transaction fees, user experience, and ecosystem support (e.g., ERC-721/1155 with EIP-4906 for dynamic states).
• Plan for interoperability. Support token-gated commerce and identity solutions that work across existing web2 platforms (e.g., Shopify, ENS).
• Avoid lock-in. Prefer open standards. Architect metadata portability and migration paths from day one.
• Embrace off-chain + on-chain. Blend efficient server-side logic with verifiable on-chain proofs. Always keep personally identifiable information (PII) off-chain.
• Model economics conservatively. Don’t build a business model that relies on secondary market royalties. Test for cyclical demand, especially in financial applications.
• Design for regulation. If you’re in apparel or physical goods, start tracking Digital Product Passport and sustainability disclosure requirements now, not in 2029.
• Write the license. Spell out commercial rights, derivatives, and trademark usage in plain, unambiguous language.
• Measure what matters. Focus on retained users, repeat redemptions, and secondary market health—not just the revenue from the initial mint.

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Bottom Line​

The hype cycle burned off. What’s left is useful: NFTs as building blocks for ownership, access, and provenance that normal people can actually touch—especially when teams hide the blockchain and foreground the benefit.