The growth of NFTs has shot to the next level in terms of popularity and finding acceptance from the crypto community and the mainstream alike. Nonfungible tokens (NFTs) that were initially idea to be a bubble are at present expanding their coverage across the cryptoverse.

According to a report past DappRadar, the NFT market has had its best twelvemonth, generating over $23 billion with the floor market place capitalization of the top 100 NFT collections standing at $16.vii billion, as of Dec. 17, even earlier the twelvemonth closed out.

The biggest movement for NFTs and the metaverse space has been Facebook'due south announcement of being rebranded to Meta on Oct. 28 in a bid to expand its reach beyond social media and into the Metaverse. In fact, in the concluding calendar week of October, it was revealed that over $106 million worth of Metaverse country was sold in vii days.

Inside the cryptoverse, the NFT collectibles frenzy first began in 2022 with the launch of the CryptoKitties game and the subsequent demand for these digital cats. At its peak, the blockchain game recorded a maximum of 140,000 daily users and 180,000 daily transactions in November 2022, only this traction was chop-chop lost over a few months. Since then, the collectibles domain has gone on to have renowned collections similar CryptoPunks, Bored Apes Yacht Club and NBA Pinnacle Shots.

The initial interest effectually NFTs in the mainstream came from the digitization and tokenization of artworks by renowned artists like Beeple through sale sales hosted past traditional art galleries like Christie's and Sotheby's.

Since and then, the telescopic of NFTs has expanded to include fine art, music, games, sports and Tweets — just about any digital or existent-world nugget — that can be tokenized while even so holding their value and providing unique ownership.

GameFi is the game-changer

The prime watershed moment for NFTs that followed the Metaverse narrative is through GameFi protocols. GameFi is divers every bit the combination of gaming and decentralized finance (DeFi) within a unmarried ecosystem. According to Huobi Research, the enquiry arm of the cryptocurrency substitution, GameFi has revived the interest in blockchain gaming.

The leading protocol in this regard in 2022 has been Axie Infinity, a game universe where gamers can collect Axies every bit pets in order to boxing, breed, enhance and build kingdoms for their pets. The game ecosystem is powered past AXS and SLP, the native tokens of the ecosystem.

The Ethereum-based game was released back in March 2022 and has been adult by Vietnamese game developer Sky Mavis. Due to the hype that surrounded the game this year, the Axie Infinity collection has quickly risen to become the most traded NFT drove ever in the short history of NFTs. The collection has clocked nearly $4 billion in all-time sales. Axie Infinity has surpassed other blockchain games past a mile with the current in-game trading book.

The daily agile users of the game grew from 20,000 users in March of this twelvemonth to 2.v million users in December of this year, marking a 125x increase in less than 9 months — a remarkable feat for a game that gained hype only this year. The game has recorded $9.72 million in a single 24-hour interval in June, surpassing a record Tencent held at the time. In the third quarter of 2022, the game accounted for 19.five% of the total NFT trading volume in the same menses and $two.08 billion of trading volumes.

While this game is based on Ethereum, blockchain-based games have spread across blockchain networks like Solana and the Binance Smart Chain. In that location have been several games that have gained popularity across blockchain networks similar Splinterlands on Hive and Wax, Alien Worlds on Wax, Upland on EOS, and MOBOX based on the Binance Smart Chain.

The investment raised with the blockchain gaming domain has well surpassed over a billion dollars in 2022, led by the $930 million raised by the gaming company Forte Labs.

Pushback from traditional gaming and regulations

Even though GameFi has been disrupting gaming with the introduction of blockchain technology, the traditional gaming manufacture hasn't exactly been receiving this innovation well. Steam/Valve banned all blockchain-based games from its platform earlier this yr. In response, however, over 26 companies and advocacy groups have chosen on the visitor to reverse the ban.

Additionally, the South Korean regime has at present blocked the release of new play-to-earn (P2E) games and asked the existing blockchain games with a P2E model to be removed from Apple tree Store and Google Play Store. In contrast, Epic Games, the creator of Fortnite, has said that the visitor is open to blockchain-based games that support cryptocurrency and blockchain-based assets.

Even Elon Musk, the CEO of SpaceX and Tesla, recently stated in an interview on Dec. 22 that he believes his company's engineering, Neuralink, is better than the Metaverse in the long term every bit he doesn't meet "someone strapping a friggin' screen to their face up all twenty-four hours." Musk added: "In the long term, a sophisticated Neuralink could put yous fully into virtual reality. I call back nosotros're far from disappearing into the metaverse, this sounds just kind of buzzwordy."

Related: Concerts in the Metaverse could lead to a new wave of adoption

Despite the pushback from the traditional gaming industry and some regulators, GameFi has been growing at an incredibly fast pace. The company backside the beginning Bitcoin-based ETF in the United States, ProShares, has announced its plans to launch a Metaverse-focused ETF that will include companies similar Apple tree, Meta and Nvidia. The company has filed for the ETF with the United States Securities and Commutation Commission (SEC) under the name ProShares Metaverse Theme ETF, which will track the performance of the Solactive Metaverse Theme Index (SOMETAV).

Even one of the consulting Big4 firms, PricewaterhouseCoopers (PWC) Hong Kong, accept dipped their toes into the Metaverse. The company purchased a country plot in a metaverse game Sandbox. Even the Italian luxury sports motorcar manufacturer Ferrari hinted at NFTs subsequently a deal with the Swiss blockchain startup Velas Network.

Enterprises as such can utilize blockchain applied science to create business models in the Metaverse and achieve efficiency and cantankerous-compatibility with the real world. If 2022 tin can be considered to be the year of DeFi and NFTs, information technology is most certain that 2022 will exist the year of GameFi and the Metaverse.