A top crypto exec shares why GameFi is so hot right now - and lists 2 reasons why play-to-earn-games like Axie Infinity are taking the market by storm
GameFi" could transform gamingbusiness models and power the digital economy, according to Huobi's Jeff Mei.
- Investors are fired up by the rapid use case of decentralized finance and excitement around making money off
NFTgames like Axie Infinity.
GameFi is one of the hottest technologies in the
"Users want the hottest, most innovative, the most creative, the most promising assets on the market," he told Insider in a recent interview.
GameFi, the intersection of decentralized finance and the gaming industry, is attracting mass attention from the crypto community and the biggest gaming guilds in the sector.
The business model allows for players to obtain a share of the dividends brought in from game development, with their most common feature being "play to earn".
Mei laid out two reasons behind its rise: the evolution of financial mechanisms in games, and users liking that they can make money by playing.
He said Huobi, which has a $10 million fund dedicated to emerging GameFi projects, is invested in coaching and incubating several early-stage projects because "this is going to be a very hot industry."
Huobi's fund will back GameFi projects in the start-up stage to make an impact in the blockchain world, via marketing and PR support, financial and legal advice, and introductions to potential partners.
"Our investment teams and our research teams are always working around the clock to find these products," Mei said. Supernova, Immutable, and Rangers Protocol are some of the first projects Huobi's investment arm funded.
"We want to help users find the best projects that might have value, the best projects that might have some type of innovation, some type of quick adoption," he said. "There's so many projects out there that are 'vaporware' - they're fake. They just want to make money and run away."
Huobi, which was founded in China in 2013, no longer operates in its country of origin. The exchange is now looking to expand its presence in countries with high crypto adoption rates and a large retail trader base, including India, Vietnam, and Turkey.
Mei explained that the rationale behind Huobi's expansion strategy, which seems concentrated in Southeast Asia, is that GameFi has huge potential in the region. "We'll be focusing a lot on more retail uses," he said. "For example, in Vietnam right now, one of the most popular GameFi projects is Axie Infinity."
The ethereum-based game, created by Vietnamese developer Sky Mavis, saw its daily active users top a stunning 1 million for the first time in August, in just three years of its launch.
The game's main characters are axolotls called Axies, which are non-fungible tokens, or NFTs, that can be sold or purchased.
NFT collections have surged this year, driven by burgeoning demand for play-to-earn games, or as some call it - GameFi. The NFT market hit a record $2.5 billion in sales by July 2021, versus just $13.7 million in the first half of 2020, according to NonFungible.com. Huobi is set to launch its own NFT marketplace in November.
That boom comes from the emergence of layer 2 scaling solutions for ethereum, which has allowed crypto enthusiasts and web 3.0 gamers to trade and mint NFTs without exorbitant transaction fees.
"Gaming has always been hot in Southeast Asia, for example in Korea and Japan. That's the kind of area where we want to go in," Mei said.
While Huobi itself is building some unique projects, it's mostly testing the waters with new, cutting-edge players.
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