3 GameFi projects to watch

This article is part of Crypto Insights, a segment by major crypto exchange Bybit that dives into the latest and most pertinent issues in the crypto space.

Written by Nathan Thompson

The gaming market is set for double-digit growth this decade, according to reports from Technavio and Fortune Business Insights. This would make it worth over half a trillion dollars by 2028, with much of the expected growth in the Asia-Pacific region.

Blockchain technology could become a key driver of this expansion, especially the use of non-fungible tokens, which allow gamers to take ownership of in-game items. On-chain marketplaces will help players buy and sell NFTs, with the revenue going primarily to the owner while a small percentage serves as royalties for the creator.

Vulcan Forged’s NFT marketplace / Photo credit: Tech in Asia

In this column, we’ll look at how three projects – Immutable X, Vulcan Forged, and Ultra – are seeking to disrupt the way PC games are distributed, which is mostly done via Steam and Epic Games. The near-monopoly that these incumbents have allows them to take a cut of up to 30% from a game’s revenue. Gamers, on the other hand, are forced to exist in the walled garden of each company and don’t own their in-game assets directly.

Investing in these new projects should be seen as high risk. The projects that I mention below are just examples of teams and communities building in this space, and should not be taken as investment advice.

Immutable X

Immutable X is a Layer 2 scaling solution for the Ethereum blockchain, which specializes in non-fungible tokens, including the type of in-game NFTs that are expected to drive much of the gaming industry’s growth over the coming years. Indeed, the project recently completed a US$200 million series C funding round with a US$2.5 billion valuation. Entertainment powerhouses Disney and Marvel as well as play-to-earn startup Illuvium are all using Immutable X to power their own NFT and gaming businesses, according to the Australian Financial Review.

Behind Immutable X are brothers James and Robbie Ferguson, the creators of successful blockchain game Gods Unchained. Their company is growing despite the bear market, and it’s on track to employ 400 people by the end of the year.

With its solid fundamentals, this crypto project looks promising. However, the main downside is the vast amount of IMX tokens that Immutable X plans to unlock in stages up until 2027.

In fact, over 80% of all IMX tokens are yet to be unlocked, with 14% of the total supply belonging to seed investors with a buy price of US$0.1 and US$0.15. Whether or not Immutable X can grow its earnings to outpace the incoming sell pressure remains to be seen.

Vulcan Forged

The blockchain-native gaming platform includes an NFT marketplace and launchpad. The NFTs are blockchain agnostic, which means that they can exist on multiple chains. As the Vulcan Forged team is headquartered in Greece, Greek mythology is the running theme of its products.

Its token Pyr can be traded on the Ethereum blockchain, thanks to a partnership with Polygon’s (Matic) sidechain, which is compatible with the Ethereum Virtual Machine. Pyr acts as a governance token and is also to buy and sell items for games in the VulcanVerse, a massively multiplayer online role-playing game (MMORPG) where players can own all their in-game assets.

Only half the total tokens are in circulation and there doesn’t appear to be any seed investors waiting for token unlocks. Also, 35% of all Pyr tokens are locked for four years in “reserve.”

Ultra