Gamification has recently emerged as a major catalyst in the crypto ecosystem, revolutionizing the onboarding process for new participants and encouraging existing users to deepen their involvement.
In fact, most major exchanges today, including industry giants like Binance and Coinbase, have implemented gamified programs primarily focused on crypto education.
Others, like Blocktrade, have taken the gaming experience to the next level by offering more immersive features. In addition to trading, users can unlock rewards by participating in the platform’s arcade games and earning incentives such as trading bonuses, unique avatars and withdrawal discounts.
This trend of Web3 platforms integrating gamified incentives alongside their core products was largely fueled by the NFT hype, which the crypto town hall talked about for much of 2022. However, with the crypto market downturn last year, there has been a noticeable decline in interest in some of these gamified rewards programs.
This begs the question: are gamified reward programs too superficial, and if not, which incentive models have proven successful?
The flaw in early NFT gamification models
The reason behind the decline of gaming-related initiatives can be traced back to the original NFT gamification models.
At the time of writing, most of the NFT projects that grabbed attention in 2022 have disappeared from the spotlight. Those that have managed to hold their positions, like Bored Ape Yacht Club (BAYC), are trading at an 80% discount to their all-time highs, according to NFT Price Floor Metrics.
Meanwhile, the value of land in metaverse ecosystems like The Sandbox has plummeted from 4.2 ETH at the peak of the bull market to 0.42 ETH.
This drop in the value of NFT assets has undoubtedly impacted sentiment towards gamified initiatives in the broader crypto ecosystem. More importantly, some of these NFT gaming ecosystems in particular have substandard user interfaces and unsustainable models, issues that have contributed to the demise of most gamified projects.
“About 2,127 Web3 games have failed in the last five years, representing 75.5% of the 2,817 Web3 games launched. The average annual failure rate for Web3 games between 2018 and 2023 was 80.8%, based on the number of failed Web3 games compared to launched games.” – Coingecko.
To provide context, let’s take the case of Axie Infinity, whose value soared during the pandemic. While the game remains operational, it no longer receives the same attention as it once did. The reason? A flawed economic model that theoretically relied on new entrants to sustain the appreciation of SLP token rewards.
Similar scenarios unfolded with virtual lands, some of which offered prizes of more than $500,000. However, after the initial hype died down, investors realized the lack of tangible use cases.
Gamified incentive programs built on flawed logic have also suffered similar setbacks, which explains why newer players in the market are better off developing initiatives that focus on immersive experiences rather than short-term speculative gains.
Creating sustainable involvement
Since gaming still represents a significant portion of on-chain activity, it is critical for developers to prioritize models that can sustain engagement over time. According to DApp Radar’s latest report, the gaming sector was responsible for 34% of DApp activity, with an average daily user base of approximately 1.1 million.
The challenge of creating compelling games is even greater for Web3 platforms whose primary focus is not gaming, as they have the potential to reach a larger audience. Currently, many of these platforms are still anchored in early NFT gaming models, which primarily revolve around speculative rewards or mundane educational incentives that come with earning restrictions.
However, as highlighted in the introduction, the landscape of Web3 gaming incentives is evolving, with the rise of new arcade gaming ecosystems such as those developed by Blocktrade. Unlike the traditional NFT rewards model, where digital assets often lose value over time, Blocktrade’s arcade games allow users to exchange in-game rewards for cryptocurrencies or fiat currency.
More importantly, this EU-regulated trading platform’s arcade offers a challenge-style level model that immerses players in various experiences, including the use of Greek gods as avatars in some games. The gaming hub (arcade) was a huge success in terms of user engagement, with over 300,000 plays in the first two weeks.
“We just want the community to come to Blocktrade to play other games or become our customers,” said Christian Niedermüller, CEO of Blocktrade.
Judging by the level of engagement this arcade is currently witnessing, enabling potential crypto gamers to get real value from gaming incentives is certainly one of the most important aspects Web3 platforms need to consider, in addition to building intentional games that are more immersive and focused on the user. conservation.
It’s also worth realizing that Web2 game publishers are doing their best to improve the Web3 gaming experience. The Epic Games Store is currently home to several Web3-based games, while Ubisoft recently teamed up with Immutable to advance the concept of gamification through Web3 incentives.
Conclusion
The idea of gamified rewards even existed in Web2; in some cases this is called loyalty reward. Web3 gamification takes the idea to a whole new level, where users are not limited in how they can spend their rewards. For example, in the model, players who win can choose to exchange their rewards for real value, which should be the case. For these programs to succeed, however, Web3 innovators will need to deliver more immersive experiences instead of getting stuck in the speculative hype era.