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As gaming giants crumble, onchain gaming promises remain unfulfilled

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2 weeks ago

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Opinion by: Daryl Xu, co-founder and CEO, NPC Labs

While gaming has been on a steady decline since the end of COVID-19 lockdowns, 2024 hit the industry especially hard, with layoffs and studio closures hitting even the most prominent studios. 

While unsustainable development costs and an innovation crisis seem to be the main culprits behind the collapse, Web3 gaming emerged as a potential solution promising to return power to developers — and it raised billions of dollars in investment to do so. 

Yet, despite a continued rise in crypto adoption, Web3 gaming has failed to capture mainstream players’ attention or solve any of gaming’s fundamental problems. Why? Early blockchains were designed for financial applications. Game developers were forced to either build on blockchains that weren’t designed for their use or create their own chains that isolated themselves from the blockchain ecosystem. Either choice led to poor player experience and an overemphasis on tokenomics. 

Many developers choose the latter, picking control over connectivity. Inadvertently, this resulted in walled gardens that were not dissimilar to the ones that contributed to traditional gaming’s collapse.

A solution that created more problems

A recent article in The New York Times revealed that over the last 30 or 40 years, video game industry executives have bet on better graphics to bring in players and profits rather than leaning on creativity. Traditional gaming development is costly, regularly exceeding $100 million per title. Indie developers often struggle to compete against large publishers who ultimately control funding and distribution.

Blockchain seemed to be a promising solution for indie studios, providing them with new avenues to raise funds and giving them control over distribution. Early Web3 gaming platforms, however, ended up recreating the same enclosed systems that blockchain was trying to fix. With high player acquisition costs and limited Web3 gamers, Web3 gaming platforms deepened their moats to prevent users from moving away. As it continued developing, Web3 gaming introduced its own problems. 

An impossible choice for game developers

The technological infrastructures of layer-1 blockchains like Ethereum and Solana were created for finance and not aligned with gaming’s requirements. Beyond transaction speed, layer-2 solutions were not designed to handle gaming’s unique needs either.

Game developers — attracted to Web3’s funding model, promises of ownership and user engagement, are forced to either build on existing blockchains and compromise gameplay or launch their own chain — which diverts attention and resources away from what they want to do: make better games. 

Recent: Web3 gaming investors no longer throwing money at ‘Axie killers’

While crypto native players may feel this is a worthwhile tradeoff, mainstream gamers want engaging experiences. A January DappRadar report showed that Web3 gaming had reached 7.3 million unique active wallets, but  in speaking with the community anecdotally, approximately 10,000 of those represent the actual gaming cohort who aren’t in games just to farm rewards. This number may be higher but is not more than 50,000 to 100,000 at the most.

A misalignment with gaming culture

The thing that converts mainstream users onchain isn’t non-fungible tokens (NFTs) or decentralized finance, its meaningful ownership of in-asset games. Mainstream gamers have spent decades on arcade games, Nintendo or mobile games. If combined with true ownership of in-game assets, that familiarity is powerful enough to create a compelling experience for developers and gamers.

While Web3 games claim to be revolutionizing gaming, most projects aren’t listening to actual gamers. In actuality, they end up competing for the same crypto-native users. Rather than focusing on fun and engaging gameplay, most Web3 games are led by crypto technology and tokenomics. Within this bubble, success in Web3 gaming meant taking crypto users from each other rather than bringing new players onchain. 

With rare exceptions, the industry lost sight of what’s important: making fun games that people want to play.

This misalignment also extends to game developers who want to enter Web3 to create better player experiences and sustainable revenue models. Game studios understand the potentials of Web3 but are hesitant to navigate crypto’s complex systems, which require technical skills to build protocols with sufficient liquidity and user bases while delivering seamless gameplay simultaneously.

Make games fun again

As major studios continue to struggle, Web3 has a second chance to deliver on its promise. But this time, we must rethink how games interact. We must focus on creating access for creators and players instead of building new walled gardens. This requires Web3 gaming-specific infrastructure that provides both developer control and cross-ecosystem collaboration. 

The path forward is clear. We need to restore economic freedom to creators and put control back in players’ hands. That means revenue models that reward collaboration instead of isolation. Most importantly, it means returning to gaming’s roots — making games fun again. 

The future of gaming isn’t about better graphics or token incentives. It’s about creating an industry where creativity and collaboration can thrive. When developers can focus on making engaging experiences instead of building moats, everyone wins.

Opinion by: Daryl Xu, co-founder and CEO, NPC Labs.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Coin Market

ECB flags risk of financial contagion from US crypto push

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58 minutes ago

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April 22, 2025

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The European Central Bank (ECB) raised an alarm over potential fallout from aggressive US support for the crypto industry, warning that a surge in dollar-backed stablecoins could destabilize Europe’s financial system.

According to a policy paper seen by Politico, the ECB has asked for a revision of the Markets in Crypto-Assets Regulation (MiCA) regulatory framework for cryptocurrencies just months after it came into effect.

The concern is that US reforms backed by President Donald Trump could flood European markets with dollar-denominated stablecoins.

The ECB fears this could trigger a flight of European capital into US assets, undermining EU financial sovereignty and exposing banks to liquidity risks.

ECB and European Commission Clash Over MiCA Rules

While the ECB calls for tighter controls, the European Commission dismissed the warnings as exaggerated, per the report.

The report, citing two diplomats and one EU official, said that the existing MiCA framework is robust enough to manage stablecoin risks despite potential US policies like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS), two bills aimed at expanding America’s crypto footprint.

“The Commission was quite clear that they had different views on this topic,” and “not very many (countries) supported the idea that we should now jump the gun and start making quick changes in (the rules) based on this alone,” one of the diplomats reportedly told Politico.

The stablecoin sector now commands a valuation of $234 billion, according to data from CoinMarketCap.

The ECB warned that European issuers could face redemption pressures from EU and foreign holders without stricter limits, potentially sparking a financial “run” and harming exposed institutions.

“The worry is warranted,” Mikko Ohtamaa, co-founder and CEO at Trading Strategy, said in a post on X. “However, the EU had the first mover advantage with the regulation and they screwed it up.”

Ohtamaa said no EU stablecoin is globally competitive due to MiCA’s restrictive rules, which are influenced by bank and legacy finance lobbying.

Source: Mikko Ohtamaa

Related: US regulator,s FDIC and CFTC, ease crypto restrictions for banks, derivatives

Tether remains a major critic of MiCA

​Tether, the issuer of the world’s largest stablecoin, USDt (USDT), has long been a critic of the EU’s MiCA regulation.

Last year, Tether CEO Paolo Ardoino argued that MiCA’s requirements, particularly the mandate for stablecoin issuers to hold at least 60% of reserves in EU bank accounts, could introduce systemic risks to both stablecoins and the broader banking system.

Due to noncompliance with MiCA, USDT has faced delistings from major European exchanges, including Coinbase, Crypto.com and Kraken.

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Bitcoin acting "less Nasdaq" and more like gold, despite 60% recession odds

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2 hours ago

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April 22, 2025

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Bitcoin is decoupling from the US stock market and starting to trade more like precious metals, in another signal of Bitcoin’s growing role as a safe-haven asset against global economic disruption.

Bitcoin’s (BTC) price is showcasing its growing maturity as a global asset, becoming “less Nasdaq — more gold” over the past two weeks, according to Alex Svanevik, co-founder and CEO of the Nansen crypto intelligence platform.

Bitcoin staged a 12% recovery in the two weeks leading up to April 22, despite ongoing tariff escalation between the world’s largest trading nations. The US increased reciprocal tariffs on China to 125% as of April 9, while China raised import tariffs from 84% to 125% effective April 12.

Source: Alex Svanevik

Bitcoin was “surprisingly resilient” amid the trade war compared to altcoins and indexes like the S&P 500, but remains vulnerable to economic recession concerns, Svanevik told Cointelegraph, adding:

“We expect gold to be more resilient, although gold holdings could be net sold in case investors panic and want to cover margin call. This was seen one to two days at the worst of the trade war earlier this month.”

Still, Bitcoin will continue benefiting from regulatory development and the US Bitcoin Reserve-related news, particularly with more developments on how the “Treasury is looking for ways to swap reserves into BTC,” added Svanevik.

Related: Bitcoin rally above $100K may follow US Treasury buybacks — Arthur Hayes

While the US Bitcoin reserve will initially hold BTC forfeited in government criminal cases, President Donald Trump’s executive order instructed the government to develop “budget-neutral strategies” to buy more Bitcoin.

🇺🇸 LATEST: Executive Director of Digital Assets Bo Hines said the US government may buy Bitcoin using tariff revenue. pic.twitter.com/Gfc2HiEJoL

— Cointelegraph (@Cointelegraph) April 15, 2025

The US is looking at “many creative ways” to fund its Bitcoin investments, including from tariff revenue and by reevaluating the Treasury’s gold certificates, creating a paper surplus to fund the BTC reserve without selling gold, Bo Hines of the Presidential Council of Advisers for Digital Assets said in an interview on April 14.

Related: Bitcoin up 33% since 2024 halving as institutions disrupt cycle

US recession odds rise to 60%, says JPMorgan

Despite Bitcoin’s resilience against tariff concerns, a potential US recession may slash investor demand for risk assets.

The probability of a US recession in 2025 has risen from 40% to 60%, according to an April 15 research report from JPMorgan, which wrote: 

“The latest unwinding of the Liberation Day tariffs reduces the shock to the global trading order, but the remaining universal 10% tariff is still a material threat to growth and the 145% tariff on China keeps the probability of a recession at 60%.”Global Recession Outlook. Source: JPMorgan Global Economics

JPMorgan expects the Fed to “start easing in September, with further cuts at every meeting thereafter through January 2026 — reaching a 3% policy rate by June 2026,” added the report. 

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Polygon NFTs overtake Ethereum collectibles in 7-day sales

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2 hours ago

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April 22, 2025

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Polygon-based non-fungible tokens (NFTs) took the top spot in digital collectible sales after surging 20% in the last seven days. 

On April 22, NFT data tracker CryptoSlam showed that Polygon NFTs overtook Ethereum, reaching a $22.3 million volume in the past week. This represented 24% of last week’s overall NFT sales volume, which reached $92.9 million. 

The network also had over 39,000 NFT buyers for the week, an 81% increase over the previous week. 

Ethereum remained second in sales, with a $19.2 million NFT sales volume for the week. Mythos Chain followed with $14.3 million, while Bitcoin-based collections ranked fourth with $14.1 million for the week. 

Top blockchains by seven-day NFT sales volume. Source: CryptoSlam

RWA NFT collection drives Polygon surge

The Polygon NFT surge was driven by a single real-world asset (RWA) NFT collection, highlighting that the RWA narrative has reached the NFT space.

RWA tokenization refers to tangible assets minted on the blockchain to increase accessibility and trading opportunities for the assets. Simply put, it’s transforming real-world assets like art, property or even stocks into digital tokens on a blockchain that can be bought, held or traded.

CryptoSlam data shows that increased sales from Courtyard NFTs caused the Polygon NFT surge. The collection reached a sales volume of $20.7 million, eclipsing the performances of other popular NFT projects for the week. 

Courtyard NFT collection tops digital collectible sales volume list. Source: CryptoSlam

Related: Bybit shuts down four more Web3 services after axing NFT marketplace

Courtyard is an RWA marketplace for graded physical card collections. This includes the Pokémon, basketball and baseball cards that are popular among collectors. 

The platform operates by storing and insuring tokenized cards in a vault operated by a security company. This means that NFTs are physically backed. After purchasing NFTs, users can opt to redeem the physical card. When this happens, the NFT is burned and will no longer be traded in the marketplace. 

Onchain RWAs have been a strong narrative in the first quarter of 2025. Data from RWA.xyz shows that tokenized assets have reached $21.2 billion, with total asset holders of more than 97,000. This excludes the value of stablecoins, which is already at $227 billion. 

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