For those already sceptical about the crypto space, racing digital horses to win crypto tokens is unlikely to change that perception. However, that’s precisely the premise of Pegaxy, a video game built around the play-to-earn model popularised by blockchain-based gaming.
Users are required to purchase futuristic digital horses, or Pegas, to participate. Users then get to spectate as ten Pegas race each other in a straight line, hoping that their digital horses end up in the top 3. If they achieve a podium finish, users are rewarded with crypto tokens. The value of such rewards can range from a few cents to a few dollars.
For instance, Pegaxy had an active user base of ~93,100 in March 2022. Candy Crush, on the other hand, had a daily active user base of 13.2 million in the month prior. Despite this discrepancy, Polygon believes that games such as Pegaxy are an inextricable part of its future. A way to increase its utility by going beyond crypto trading and increase usage of its platform in the process.
And Mumbai-based Polygon, which raised $450 million in February, is putting its money where its mouth is. According to two executives familiar with Polygon’s operations, the firm has earmarked over $200 million to incubate and help developers build out games and related projects that operate on its platform.
Polygon isn’t the only one betting on the crypto gaming space. The sector—labelled GameFi—received $1 billion in funding in January alone. For context, that’s a quarter of the $4 billion that was pumped into the space over the entirety of 2021.
But while GameFi may be the next big crypto bet, blockchain-based games currently suffer on two fronts. First, interacting with anything on a blockchain is a tedious and complicated affair as opposed to downloading games on a smartphone. Second, and perhaps most importantly, even though investors are bullish about blockchain gaming, users are far less convinced. This is because most of the early GameFi offerings are more focused on the earning aspect than the gaming one.
“These so-called Web3 Web3 Web 3.0 Web3 is an idea for a new iteration of the World Wide Web based on blockchain technology, which incorporates concepts such as decentralisation and token-based economics games don’t have any game experience or gameplay.