Unlocking DeFi Kingdoms Data and Other GameFi Projects with Increment
Introduction
Blockchain-based gaming, or GameFi, has grown tremendously over the past few years. With the ascent of play-to-earn models, where players are rewarded with real value, GameFi protocols have garnered immense popularity. One of the more recent stars in this space is DeFi Kingdoms, an innovative roleplaying game that integrates decentralized finance (DeFi) primitives into its architecture.
As of 2023, the GameFi industry experienced significant growth, with the number of active players projected to reach over 50 million by 2024, up from around 20 million in 2023. Furthermore, GameFi is expected to account for up to 10% of the global gaming market by 2024, growing from about 3% in 2023, according to Coingecko.
Additionally, CYBAVO reports that blockchain gaming dominance increased from 43% in Q4 of 2022 to 46% in Q1 of 2023, while the percentage of unique active wallets participating in GameFi remained high at around 44%.
According to Coinmarketcap, as of the time of writing this article, the market cap of all Gaming tokens is $18.8B with a trading volume of $1.2B.
However, as GameFi scales in users and activity, the data generated on the underlying blockchains has become increasingly complex. Making sense of the volumes of on-chain data presents a significant challenge. There is a growing need for robust analytics tools that intuitively unlock insights from GameFi and other blockchain projects.
Granular analytics on data on elements like in-game assets, transactions, NFT sales volume, liquidity pools, and user activities can provide game developers, investors, and ecosystem participants with powerful insights.
This is where Increment comes in — an analytics platform by Covalent that aims to provide easy-to-use data analysis capabilities tailored for blockchain projects. With simplified data modelling, customizable queries, a no-code interface, etc., Increment can help users better understand data from DeFi Kingdoms and other such protocols.
Unveiling DeFi Kingdoms
DeFi Kingdoms is a decentralized finance (DeFi) game built initially on the Harmony blockchain that allows players to earn rewards in tokens and NFTs through gameplay and decentralized exchange (DEX) services. Launched in 2021, DeFi Kingdoms quickly became one of the most popular blockchain games, with over $1 billion in total value locked at its peak.
The game combines aspects of decentralized finance with gameplay mechanics from traditional video games. Players can explore maps, complete quests, collect treasures and rare NFT items, battle enemies, level up their characters, and more. One of the main activities on the in-game DEX is providing liquidity into the JEWEL-ONE Liquidity Pool, which is the main pool on the DEX, generating liquidity provider tokens that earn staking rewards.
DeFi Kingdoms offers an immersive gameplay experience as a fantasy RPG and simulation game. It leverages NFTs to unlock game assets like heroes, kingdoms, and quest items. The game combines the appeal of popular RPGs with blockchain incentives, where players go fishing, create gardens, and craft items using resources collected in-game.
Heroes are NFTs users can purchase to send on quests and adventures to earn resources and experience points. As heroes level up, they become more powerful and can battle more challenging enemies. Players can also purchase kingdoms, which are plots of LAND represented as NFTs. Owning a kingdom provides governance power and additional opportunities to earn resources.
The primary token used in DeFi Kingdoms is JEWEL, used for staking, governance, and transacting on the DEX. Players can also earn other tokens like xJEWEL by staking JEWEL. With a dedicated community and innovative gameplay, DeFi Kingdoms has become a leading project at the intersection of blockchain gaming and DeFi.
The open, transparent nature of activities on DeFi Kingdoms through the Harmony blockchain means data analytics can provide valuable insights into the project’s usage, adoption, tokenomics, and other vital metrics. Tools like Increment that simplify access to on-chain data help users better understand and evaluate the Decentralized Kingdoms ecosystem.
The Increment Advantage: A Comprehensive Analytics Solution
Increment is a no-code solution that harnesses Covalent’s unified API, offering unparalleled flexibility and scalability to developers, blockchain enthusiasts, and innovators seeking dynamic, personalized data visualization. Increment is redefining the parameters of Web3 analytics, fostering a dynamic and interactive user journey by integrating encoded business logic with a user-centric interface.
Increment provides a revolutionary approach to blockchain analytics that makes data exploration easy and intuitive. With Increment, anyone can analyze complex on-chain data from over 200 different blockchain networks without writing any SQL queries.
Increment offers a robust, comprehensive analytics solution for blockchain data. Some key advantages of using Increment include:
- Encapsulation of Business Logic into SQL: Increment deftly encodes the essence of business logic — Reach, Retention, and Revenue — into an SQL compiler, thus automating the generation of complex queries.
- Standardized data models: Increment uses standardized data models adapted across blockchains and applications. This model simplifies and streamlines the data analysis process, allowing users to work with unified schemas instead of specialized data structures. The standardization provides consistency in how data is organized and presented.
- Cross-chain data coverage: Increment provides extensive data coverage across multiple blockchains and layers, including Ethereum, Polygon, Arbitrum, Optimism, BNB Chain, Avalanche, Fantom, and more, as well as data from L2 solutions. Having a single analytics platform with broad data access eliminates the need for separate tools for different chains.
- Intuitive no-code interface: Increment has an intuitive, no-code interface that makes blockchain data analysis accessible even for non-technical users. The platform uses a simple drag-and-drop workflow to build queries without requiring SQL or coding expertise. Users can get started quickly analyzing the user-friendly UI.
- Debuggable SQL queries: For users with SQL knowledge, Increment allows debugging SQL queries using ready-made templates that can be easily customized. The platform bridges the gap between no-code convenience and SQL flexibility. Queries can be optimized by troubleshooting errors and iterating on the SQL code.
Combining these features enables technical and non-technical users to conduct effective and practical analyses.
Applying Increment’s Analytical Power to DeFi Kingdoms.
We will use the Reach — Retention — Revenue (R3) framework to uncover insights about DeFi Kingdom.
The Reach, Retention, and Revenue (R3) framework is used to evaluate and compare the performance of blockchains in a precise, comprehensive manner. This framework focuses on a blockchain’s user base’s growth, retention, and monetization.
1. Reach — Growing a User Base
This involves expanding the user base by emphasizing product development and distribution equally. Metrics such as active addresses and transactions are crucial to understanding reach. Active addresses refer to unique transaction senders and recipients, and their increase signifies an expanding user base.
2. Retention — Retaining a User Base
Retention focuses on keeping the existing users actively engaged with the product. The retention rate of monthly cohorts (MoM Retention), the Stickiness Ratio (SR) showing the percentage of monthly active addresses (MAA) that are daily active addresses (DAA), and segregating active addresses into new versus existing are all key metrics to assess the blockchain’s ability to retain its user base.
3. Revenue — Monetizing a User Base
Revenue includes monitoring the financial growth of a project and proving its market fit. Metrics that reflect revenue growth, such as Native and ERC-20 Token Transfer Volume and Gas Fees USD, which refer to the fees users pay to execute transactions on the blockchain, are also essential to consider.
The Analysis
IMPORTANT:
- This examination primarily concentrates on the decentralized exchange (DEX) functionalities and the non-fungible token (NFT) elements of DeFi Kingdoms.
- All Games (NFT) analyses conducted are exclusively focused on the DFK chain, while DEX services taken into account are on Harmony, which operates as a subnet on the Avalanche C-chain.
- The analysis is conducted based on historical data, aiming to assess the performance of DeFi Kingdoms over the past 48 months.
- Analyses on the DFK chain commenced from its inception in May 2022.
Reach
a. User Behavior
The DEX reached its peak user activity in 2022 but has since progressively dropped during 2023. This drop is likely due to an exploit that unlocks locked JEWEL tokens in 2022. Notably, there was a considerable increase in November 2022, largely due to the introduction of the “Dark Summoning” function. This option allows players to summon a new Hero by sacrificing two of their existing ones, offering advantages to the newly summoned Hero in exchange for reduced costs and fewer restrictions.
A similar trend can be seen on the NFT side, though not as pronounced as in DEX services. Aside from the hype surrounding the “Dark Summoning” publication, there has been a significant but slow decline between early and mid-2023. The increase in user activity during Q4 2023 can be attributed to the release of new titles, such as “Void Hunt” in October and “Visages” and “DFK Bloaters and Ninja Hero” in December. This trend highlights the importance of game metrics and conditions in determining DEX service performance on DeFi Kingdom.
b. NFT Trades
Users have continuously traded NFTs since the platform’s launch, with occasional swings attributed to occurrences that impacted the platform’s overall user base.
c. NFT buyers and sellers
When buyers and sellers were compared separately, sellers constantly outnumbered buyers until October 2023, when buyers surged, surpassing the number of sellers. Presently, there are more NFT buyers than sellers.
Over the years, there has been a significant influx of new buyers compared to sellers, indicating the game’s widespread appeal and suggesting a continual influx of new users eager to join and enjoy the gameplay.
Also, considering the overall number of active users, the platform registers just slightly over 13K. This figure is notably low, especially compared to the likes of Axie Infinity (only the Axie collection), which boasts over 2 million unique active users.
Retention
a. Stickiness Ratio
This metric represents user engagement, calculated by dividing the average daily users (DAU) by the total number of traders. The stickiness ratio for DeFi Kingdoms has consistently hovered below 30%, fluctuating within that range. However, in November 2023, there was a significant dip in the stickiness ratio. This insight suggests that despite various releases and new features introduced around that period, it attracted a surge of new users who did not stay engaged with the platform for an extended duration.
Compared with the Stickiness ratio of Axie Infinity, it is clear that Axie users are more long-term than DeFi Kingdoms users, reaching up to 120% stickiness ratio.
b. Traders’ Daily Activities/Wash Trades
Analyzing traders’ daily buying and selling activities provides insights into their activity level and helps identify potential wash trades within the collections. So, by examining the charts, the daily buy-sell activities appear predominantly organic, with a higher frequency of buy transactions compared to those involving both buys and sell on the same day.
The chart illustrates the number of traders engaging in various activities, such as buying only, buying and selling on the same day, and engaging in a cycle of buying, selling, and buying again over one month.
Notably, October stands out as a month with a notable increase in the number of traders who executed complex sequences of traders sell, buy again, then sell, and buy finally” on the same day. While this pattern could indicate wash trading, it is essential to consider that the launch of “Dark Summoning” occurred during this month.
This feature required users to sacrifice two existing Heroes for a new one with enhanced capabilities. As a result, the observed trading patterns in October may be attributed to the unique mechanics introduced by the “Dark Summoning” option rather than solely indicating wash trading activities.
Revenue
a. Volume of NFT Sales
The Heroes NFT collection’s sales volume exhibited a similar pattern to the trends observed in the DEX’s active users and the game’s total users. There was a significant surge in Q4 2022, reaching a peak of $1.59 million in November. Subsequently, there was a consistent decline until October 2023, when the volume experienced a renewed increase. It’s worth noting that the sales volume has consistently remained above $100K since July 2022, indicating a sustained level of activity in the market.
b. DEX Volume
While the Heroes NFT collection maintained a steady sales volume trend, the DEX witnessed a substantial decline in volume after January 2022. The analysis indicates differing market dynamics between the two components within the DeFi Kingdoms ecosystem.
The total volume of Heroes NFTs sold on the DFK chain is below $15 million, significantly trailing Axie Infinity, where the total volume surpasses an impressive $18 billion, highlighting a substantial difference in the scale of NFT sales between the two platforms.
Extending Increment’s Expertise to Other GameFi Endeavors
Increment delivers powerful data analysis capabilities spanning the diverse landscape of GameFi protocols and blockchain networks, encompassing over 200 blockchains. Its adaptable data models and SQL querying features facilitate easy integration with the unique characteristics of individual GameFi applications. Let’s delve into a few case studies to illustrate its versatile application.
1. Bird’s Eye View of Cross-Chain Analysis
By examining the broader blockchain landscape, prevalent ones in the GameFi sector, comprehensive analyses of activities on these chains become feasible. One can ascertain user concentration, transaction volumes, and other pertinent metrics without delving into specific protocols. Thus, it proves invaluable for developers, builders, and even everyday web3 GameFi enthusiasts seeking insights to navigate based on specific metrics.
The chart illustrates that Polygon boasts more collections than ETH, yet it records fewer users interacting with it than ETH. Among the top chains for active users and collections are ETH, Polygon, Base, and Arbitrum. These chains stand out as key players in terms of user engagement and the variety of collections on their platforms.
2. Deep Dive into a particular Game
a. The Sandbox
For example, The Sandbox Game, utilizing Ethereum, has revolutionized the play-to-earn scene with NFTs and $SAND rewards. Increment delves into its extensive ecosystem, examining player interactions, LANDs transactions, marketplace dynamics, ASSETs management, and revenue trends. This comprehensive analysis equips players, developers, and investors with pivotal insights. Some of the metrics that can looked at are as follows:
- WAU and DAU — Analyzing the average weekly and daily user (WAU and DAU) metrics is crucial for gaining insights into the user retention dynamics of a platform. When segmented by blockchain, it becomes easier to discern which blockchain exhibits higher user retention rates.
- Maximum and average price of LANDs — The maximum price of a Sandbox’s LAND was sold on Polygon compared with the average price.
b. Planet IX
Similarly, as an example, Planet IX, a strategy-driven NFT game on the Polygon, rewards players with its native $PIX tokens. The game features a rich ecosystem where player strategies determine success in NFT trading and virtual territory acquisition, categorized by Copper, Silver, Gold, and Platinum lands.
Increment can provide critical metrics for Planet IX, including player stat, $PIX transactions, in-game NFT trades, virtual real estate purchases (Copper, Silver, Gold, Platinum lands), and unique revenue streams. Let’s check a few:
- Active Users — While we won’t delve into the reasons for the surge in user activities from Q4, 2022 to Q2, 2023, it’s apparent how easily we can glean insights into user trends on Planet IX.
- Sales volume Vs. Average sales price — The trade volume correlates with user activities, displaying slightly distinct surges in mid to early 2022.
Conclusion
Ultimately, Increment enables comprehensive GameFi data analysis and empowers projects like DeFi Kingdoms. Increment makes robust analysis achievable for individuals and organizations in the emergent GameFi space by standardizing blockchain data models across chains and offering easy-to-use SQL query building.
Increment’s intuitive analytics interface allows anyone to gain powerful insights into blockchain projects like DeFi Kingdoms to guide decisions and strategy. The tool unlocks a deeper understanding of gaming ecosystems and mechanics that can enhance user experiences.
As GameFi and play-to-earn models continue gaining traction, data-driven intelligence will prove critical for players and developers. Covalent’s Increment solution is an invaluable asset in navigating the complex data landscape of blockchain gaming. Readers are encouraged to explore Increment’s capabilities for their GameFi analysis needs. The opportunities to apply its analytical power across chains and projects are vast. With reliable, unified data access and flexible analyses, Increment can propel the reach and impact of decentralized gaming worldwide.
