Binance Smart Chain beats Ethereum by a few metrics thanks to latest ‘GameFi’ craze
Not so long ago, every public blockchain attempted to challenge Ethereum’s dominance in the sizzling decentralized finance (DeFi) industry. After the Ethereum-based video game “Axie Infinity” became an instant hit, blockchains flourished in the $ 100 billion gaming industry.
In the latest installment of the blockchain competition – just like what happened with DeFi – Binance Smart Chain, the public blockchain backed by Binance, the world’s largest centralized crypto exchange in terms of transaction volume, once again surpassed the Ethereum blockchain in daily transactions.
BSC had previously flipped Ethereum on the number of transactions due to the success of PancakeSwap, a decentralized exchange on BSC amid a craze for DeFi. This time, however, Binance’s success came thanks to a relatively little-known game on BSC called “CryptoBlades”.
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Data from data tracking company DeFi DappRadar shows that more than 621,000 users were on “CryptoBlades” in the past 30 days, while that number for “Axie Infinity” is just over 271,000.
On July 31, Binance CEO Changpeng “CZ” Zhao tweeted: “#BinanceSmartChain processed over 10 million transactions yesterday. #Ethereum treated 1.2 M. “
“#DeFi and #GameFi are growing,” he wrote in a second tweet. And in response to a question of whether BSC is ready to process 20 million transactions per day, Zhao wrote: “Not an expert. But I think we’ll find out soon enough.
The series of tweets reflected Zhao’s enthusiasm for the growth of crypto games on BSC, as someone who rarely recognized BSC’s ambition to challenge Ethereum.
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But what is “GameFi” and why are blockchains flocking to the sector?
“GameFi”, which combines gaming and DeFi into one word, is the gamification of financial mechanisms where users can earn profit by playing games. Another popular term for this industry is the “play to win” model.
On the face of it, the keyword is “game”, but deep down, “finance” is what matters most to blockchains.
BNB, the utility token for Binance and BSC, and BUSD, a US dollar-indexed stablecoin powered by Binance, play an important role in crypto games on BSC.
For example, to purchase the native SKILL token “CryptoBlades”, players must first purchase BNB and exchange their BNB for SKILL on ApeSwap, a decentralized exchange on BSC. This is a huge boost for BNB demand as well as liquidity on ApeSwap.
All transactions made on “CryptoBlades”, such as exchanging game characters and weapons, will require players to pay a certain amount of gasoline fees with BNB.
In an interview with CoinDesk, Samsul Karim, Ecosystem Coordinator at Binance Smart Chain, said that BNB is used in many crypto games on BSC, but he also pointed out that game developers need to understand that users need to be able to choose between different assets – whether it’s BNB or BUSD.
Rather than adding financial value to BSC, Karim said crypto games bring “cultural value” to BSC.
“In the same way that you would evaluate a work of art, for example, like this work of art, what is the economic output that it contributes to society or to a particular economy? Said Karim. “It can’t be compared the same way as a DeFi loan protocol or a bank or something like that. it produces cultural value.
A framework from Polygon, a Layer 2 product protocol for Ethereum, also appeared to downplay the economic value the game brings to Polygon. The India-based product recently launched a unit called Polygon Studios to focus on blockchain games and non-fungible tokens (NFTs).
Shreyansh Singh, Head of Games and NFTs at Polygon Studios, said the use of the MATIC token, Polygon’s governance token, on NFT and Polygon-powered games is unintentional; instead, it comes naturally as players in Ethereum-based games look for faster and cheaper alternatives.
Binance and Polygon aren’t the only two seeing the huge potential of a blockchain-based gaming industry. Other crypto and blockchain companies are also making big steps in this direction.
Crypto exchange FTX recently announced several investments related to NFT games, including a sponsorship deal with decentralized gaming startup Yield Guild Games (YGG).
A perfect match
But for most people in crypto, the combination of gambling and crypto seems like a perfect marriage.
“Crypto was looking for a mass market use case,” Andrew Tu, executive at quantitative trading firm Efficient Frontier, told CoinDesk. “Gaming is a sector that people have long favored. This is the first area of crypto where the average Joe without a great understanding of crypto or blockchain can participate.
Indeed, “Axie Infinity”, the popular crypto gaming platform on Ethereum, has generated over $ 220 million in revenue in the last 30 days, making it the number one revenue generator among all DeFi protocols. and blockchains, Ethereum included, according to data from Token Terminal.
“‘Axie Infinity’ also demonstrates a functional use case for blockchain-based games, which paves the way for new entrants to the space,” said Justin Barlow, research analyst at the analytics firm of The Tie digital asset data. “With Axie’s success, it’s likely that we will see big gaming conglomerates like Activision Blizzard or EA (Electronic Arts) enter space in the years to come, bringing blockchain gaming to the masses.”
There are risks to the trendy GameFi industry as well, given how quickly it has grown.
“With the Yield Guild Games (YGG) token sale bringing in $ 12.5 million in 30 seconds, [it] shows that market participants won’t hesitate to switch from one hot toy to another, which is no different from the yield farming craze earlier in the year, ”told CoinDesk Denis Vinokourov, head of research at Synergia Capital, adding that the market is still too “nascent” to draw any conclusions.
Read more: Gone in 30 Seconds: Yield Guild Games’ $ 12.5 Million Token Sale Sells Fast
