The FTX crash affected the entire crypto ecosystem, but this could have been felt deeply in Web3 games due to the links between Solana and FTX.

Some believe that the collapse will bring more attention to decentralized projects, while others believe that GameFi is relying on centralization to attract Web2 players.

On November 24, Tegro Earn hosted a Twitter space with Footprint Analytics, Tegro Earn, KCC Games Guild, and Earn Alliance to discuss the impact of the FTX collapse on Web3 Gaming.

Here are the key points.

What does this mean for the big picture?

• More investors and market participants are losing trust in the centralized entities within cryptocurrencies. The downfall of a seemingly stable and prolific exchange, with strong ties to the GameFi ecosystem and key blockchains and marketplaces, has caused people to rethink how they store and stake their tokens.
• In the coming months, Web3 projects will lose funding opportunities, but this will eventually change because there are still funding houses with capital available to implement.

Siddharth Menon, the founder of Tegro, said:

“There is a setback; there is a whole trust problem. It’s about why Bitcoin was born in the first place. We do not trust centralized entities. It’s not that people have lost faith in cryptocurrencies in general.”

Win Alliance noted:

“Many projects will miss out on funding, especially small games that got funding through Web3. On the one hand, we are going to see a lot of scams disappear, but we are losing a lot of potential.”

Will this cause an increase in decentralized projects?

• Bitcoin, and the crypto industry in general, started as a way to decentralize the financial system and later spread to gaming and other industries. However, many centralized companies thrive in the ecosystem for the ease of use it provides.
• While centralized entities are better at attracting and keeping mainstream crypto users, they are inherently riskier than decentralized options.

Alex Cooper, Community Manager at Footprint Analytics, noted:

“Since everyone is taking their money off centralized exchanges and now centralized exchanges cannot be trusted, will people start storing and staking their tokens in DeFi projects? Are we going to see another wave of DeFi protocols, especially for gaming?

Juan José Martínez, Community Manager at Earn Alliance, said:

“Most games are trying to get Web2 players, and the easiest way to do that is to give them easy access, and the way to do that is by centralizing. On the one hand, games will be centralized, and on the other, we will see an increase in decentralized games, but for people who are already in the ecosystem.”

How did this affect existing GameFi protocols?

• Despite the bear market, the GameFi protocols have been relatively stable over the past few months. However, the collapse of FTX and its effect on Solana and the broader crypto market will likely cause a reduction in players and investors.
• The price of NFTs and tokens also fell, which lowered the expected revenue for players.

Alex Cooper of Footprint Analytics noted:

“According to our October GameFi report, not much has changed from September to October. The amount of funding is almost the same, and the number of daily users is the same. But I think the FTX issue will drastically change our stats for the November report, especially for funding.”

Kyle from KCC Games Guild said:

“There are 20 to 25 projects that were actually funded by Alameda Research or by FTX Ventures. With this type of backup, you really have a chance to show up on FTX. With FTX collapsing, they also lose this advantage, so they have to look elsewhere for funding.”

This piece is contributed by the Footprint Analytics community at November 2022 by [email protected]

Footprint Analytics is building the most comprehensive blockchain data analytics infrastructure with tools to help developers, analysts, and investors gain unparalleled insights on GameFi, DeFi, and NFTs.

The engine indexes, cleans, and extracts data from over 20 strings and counting, allowing users to create code-free charts and dashboards using a drag-and-drop interface, as well as with SQL or Python.

Footprint Analytics also provides a unified data API for NFT, GameFi, and DeFi across all major chain ecosystems.