- Polygon has become a popular layer 2 scaling solution for Ethereum since its launch. The platform has shifted its focus toward the gaming and NFT sector and has gained significant traction in this space.
- Polygon ranks 4th in terms of market share of Web3 gamers, following behind networks such as WAX, Hive, and BNB chain. The top two most played games on Polygon are currently Planet IX and Benji Bananas.
- Polygon's low gas fees and high flexibility have made it a top choice for many gaming and NFT projects to deploy on. As their list of hyper-visible partnerships with global giants continues to grow, from Starbucks to Meta and Square Enix, Polygon’s brand awareness and global reach is spreading fast.
- In the Polygon NFT landscape, gaming projects continue to dominate, making up 69% ($772 million) of total non-financial NFT volume ($1.12 billion).
- With $1 billion allocated to develop their proprietary zkEVM technology, Polygon continues to push the limits on scalability, aiming to further reduce network costs by 90% and increase throughput while maintaining Ethereum's level of security.
When it comes to choosing a scaling solution for Ethereum, Polygon is among the top choices for builders and investors. Polygon, previously known as Matic Network, is a layer 2 blockchain built on Ethereum that aims to serve as Ethereum's Internet of Blockchains (like Cosmos and Polkadot), providing child chains for transactions to reduce the load on the Ethereum parent chain. The rebrand shifted Polygon's focus to exclusively serve as a scaling solution for Ethereum.
Throughout 2022, Polygon faced multiple setbacks that threatened its stability and competitiveness. However, the platform responded by making strategic upgrades to its infrastructure and expanding its partnerships with key players in the blockchain space. By addressing these challenges head-on and committing to constant innovation, Polygon emerged as a more resilient and dynamic platform. As a result, it’s become a platform of choice for deploying NFTs and Web3 games by many builders and key industry leaders.
Overview of Polygon
Since its launch, the Polygon blockchain has gradually gained popularity and seen a significant increase in active addresses. As a result, the network has attracted a multitude of partnerships across various industries, solidifying its position as a leading blockchain platform.
Highlights of achievements and active addresses on Polygon in 2022 (Source: Polygonscan & Polygon News).
Polygon initially focused their efforts on building DeFi applications, such as decentralized exchanges, but has since expanded to the gaming landscape with the creation of Polygon Studios. This shift reflects their vision to cement their position as the go-to platform for NFTs and Web3 gaming, a necessary step in their ambitious goal to onboard the first billion users.
In the past year, while the Polygon DeFi landscape is certainly active and growing, active wallets in the Gaming category have generally continued to outperform DeFi, signalling a greater interest and engagement toward the gaming sector.
DeFi and Gaming ecosystem active wallets on Polygon (Source: Polygon Analytics)
Performance-wise, Polygon has recently been processing on average 2-3x the number of transactions compared to Ethereum. Additionally, the average daily gas paid on Polygon is around 70-200x cheaper than Ethereum.
Rising in popularity, Polygon has secured trust in the industry and successfully raised $450 million on February 7th, 2022 through a private sale of MATIC tokens. The funding round was led by Sequoia Capital India, with participation from Tiger Global, SoftBank, Galaxy Digital and others. With this significant funding, the core team can maintain their lead in Web3 adoption and invest in ZK technology to onboard the next billion users to Web3.
Exploring the Thriving Web3 Gaming Landscape on Polygon
Market Share and Popular Games
Polygon currently places fourth in terms of the number of web 3 gamers, with merely 50,000 players close behind WAX, Hive and BNB Chain.
Market share of gamers across chains
While Polygon has made significant strides in attracting gamers and game developers to its network, it still has some ground to make up in order to compete with these established players. However, the growth of Polygon's gaming community is a positive sign for the future. Below is the breakdown of the most popular games on Polygon based on the number of players.
Popular projects by number of gamers (Source: Footprint Analytics - data as of Feb 17th, 2023)
- Planet IX: A strategy game whose goal is to rejuvenate a ruined planet and uncover its mysteries, bringing it back to its previous lush state. The game aims to educate players about the effects of human behaviour on the planet.
- Benji Bananas: Animoca Brands' action-adventure game that features a monkey named Benji and friends collecting bananas for upgrades and bonuses. With over 50 million downloads, it added 1.4M active wallets and processed 4M transactions since launching in Sep 2022.
- Bomb Crypto 2: A Play-To-Earn style game where players control a squad of bomb heroes who are cyborgs on a mission to find BOMB and engage in combat against monsters.
- The Dustland: OliveX's fitness metaverse game that rewards real-life exercise, using DOSE tokens and NFTs to unlock access to the Dustland world, collectibles, and gameplay experiences for all fitness enthusiasts.
- Crazy Defense Heroes: The foundation of an upcoming upcoming tower defense blockchain game using NFTs and TOWER ERC-20 token as primary currency for purchasing game card NFTs and paying fees. Combining elements from Crazy Defense Heroes and Crazy Kings mobile games.
Gaming makes up more than half of all dApp activity on Polygon (Source: Polygon Analytics)
New Web3 Gaming Projects
The web3 gaming market has continued to expand across multiple chains and surpassed 1,900 projects in February (Footprint Analytics). At the same time, Polygon has emerged as a major player with 17% of the market share, a 4% increase YoY, proving to be a popular platform for developers and players alike.
Zooming in, Polygon has consistently rolled out a high number of new gaming projects, accounting for a quarter of the total new releases monthly. The month of January saw the highest number of launches from Polygon, with a total of 20/30 projects.
Number of new projects across chains (Source: Footprint Analytics)
Web3 Game Investor Portfolio Count
Despite the unsteady and difficult market conditions in 2022, investors still hold a hopeful outlook for the future of the blockchain gaming sector. Polygon invested in 19 web3 gaming projects in 2022.
Number of web3 games across investors (Source: Footprint Analytics)
While there is much optimistic data available, it is important to acknowledge the absence of data on Return on Investment (ROI) for web3 gaming investments raises questions about the validity, sustainability and profitability of the industry. It is crucial for both institutions and retailers to approach their investments with caution and due diligence.
How Polygon is Shaping the Future of Web3 Gaming
Choosing a blockchain network to deploy on can be difficult, especially with projects that are ambitious and large in scale. Polygon is an attractive option as it offers five core features that combines and improves upon the best of Ethereum into a more agile developer and consumer experience.
What Polygon Offers
A primary use case for Polygon is as a secure sidechain solution for games or dApps operating on other blockchain networks, even if they utilize different consensus protocols. Its high flexibility allows developers to not only reduce necessary transaction costs but also create a more seamless experience for users without suffering from network congestion. A gamer can mint their tradable NFT assets on the Ethereum blockchain while substituting all other in-game requests and transactions to the Polygon network.
Consisting of four abstract layers, Polygon provides a stable network of validators with native support for industry-wide tools. Its mass adoption, upgradability and community make it a perfect choice for ambitious gaming projects such as Planet IX, Arc8, Skyweaver and Benji Bananas.
Polygon Architecture (Source: Planet IX Whitepaper)
Why Planet IX chose to build on Polygon (Source: Planet IX Whitepaper)
What’s more? Thanks to its Proof of Stake consensus protocol, Polygon’s energy consumption is magnitudes below other major PoW blockchains. This makes them the optimal choice in terms of carbon footprint and eco-friendliness.
Polygon’s Energy Consumption vs. Other PoW Chains (Source: Polygon Blog)
In July 2021, Polygon affirmed their focus on gaming with the launch of Polygon Studios, a subsidiary aiming to position them as a leader in decentralized gaming as well the wider NFT ecosystem (Coin Telegraph). The company recognizes the need to invest in and build captivating games and tools that attract and retain players.
“The focus for gaming will continue to be on compelling experiences, better onboarding and UX, rather than tokenomics. The friction to onboard in Web3 space will continue to erode through better infrastructure, tooling and player UX.” - Polygon 2022 Rewind)
From infrastructure platforms and networks to globally respected game developers, Polygon boasts an impressive and fast growing list of partnerships. In the gaming sphere, here are a few stand out mentions.
Polygon x GameSwift: GameSwift, a gaming-optimized network, partners with Polygon to enhance web3 gaming. With GameSwift ID and scalability solutions, GameSwift aims to simplify entry for players and onboard them to Polygon's ecosystem.
Polygon x Square Enix: The Tokyo-based video game giant behind popular franchises like Final Fantasy partners with Polygon to launch a gamified art-collecting experience called Symbiogenesis. The NFT collection and free browser service will launch in spring 2023.
Polygon x Superlayer: As mentioned by Delphi Digital, a pronounced issue in gaming is often the stubborn approaches of monetizing and creating pay-to-win dynamics hated by gamers. Therefore naturally, with crypto and tokenized gaming assets, the criticism is that blockchain games will always fall into this trap. This is a problem Polygon has identified, seeing it as an opportunity to innovate on the often problematic token economies that plague Web3 games. In collaboration with Superlayer, Polygon is developing a gaming loyalty and discovery platform featuring a revenue-backed token model which would reward people for playing games (targeted alpha release in April).
Being an early leader in scalability, Polygon is still continuing to push the envelope through zkEVM technology. Committing $1 billion towards their zero-knowledge thesis for the “next chapter” of the Polygon network, the company’s vision for the future is clear (Polygon Blogs). From their team's estimate, zero-knowledge scaling solutions could further reduce network costs by 90%, as well as dramatically increase the network's throughput, all while maintaining the security provided by Ethereum. The Polygon zkEVM mainnet launch has been officially confirmed for March 27th.
As the space matures, the improving scalability and efficiency of the underlying infrastructure provided by Polygon is crucial, especially for the next generation of apps and games.
The Rise of NFTs on Polygon
Polygon’s NFT market is seeing dramatic growth due to their consistent influx of name-brand partnerships. Looking at Nansen’s data on OpenSea, the past year displays a significant climb in the number of returning buyers towards the end of 2022 and leading into 2023. The week of Dec 26th saw a rise in returning buyers to a peak count of 225,727 from 52,124 just a month prior.
Growth in number of NFT buyers on Polygon (Source: Nansen)
Polygon surpassed Ethereum in the total number of NFT sales for two months in a row. In December 2022, 1.3 million Polygon NFTs were sold compared to under 1 million on Ethereum. This trend continued in January 2023 with over 1.5 million Polygon NFTs sold while Ethereum just over 1.1 million (Dune). It’s worth noting most of these sales consist of low-cost assets for metaverse worlds or blockchain games, however, these numbers are indicative of Polygon’s growing adoption.
(Source: Dune Analytics)
In 2022, aside from financial NFTs associated with DeFi and lending protocols, gaming NFTs dominate with $772 million in total volume.
Total NFT Volume on Polygon (Source: Polygon Blogs)
The narrative of asset ownership in gaming and entertainment is incredibly strong. Looking at monthly volume on OpenSea, half of the top 20 NFT collections are under gaming projects. Most notably, The Sandbox, Planet IX, Sunflower Land, and Decentral Games.
Polygon’s Top NFT Projects by 30 Day Volume (Source: OpenSea)
Donald Trump’s NFT Cards - Exploding in popularity and minting out a 45,000 total supply, the collections floor has amassed over 11,000 ETH in secondary volume so far. There seems also to be a resurgence of interest in the project as the floor has recovered to all-time highs as of this report.
Reddit Digital Collectibles - Reddit’s digital avatar NFTs have been collected in 5.6+ million wallets and reached 100k sales with $12 million in recorded sales volume. (Polygon Blog). Based on the success of the first drop, Reddit is developing future collections partnering with artists and events!
Starbucks Odyssey Program - Starbucks launched the beta experience for their new membership system. Users would be able to participate in a variety of activities such as games and tests of their coffee knowledge to be rewarded with “Journey Stamps” which are NFTs.
Instagram (Meta) - Although still in the testing phase with a small group of creators in the US, Meta plans to launch a toolkit eventually allowing all creators on Instagram to design and launch NFTs. This initial trial would support Ethereum and Polygon-based NFTs, with support for other chains in the future. (Polygon Blog)
Magic Eden Integration - The leading cross-chain NFT marketplace has also integrated with Polygon to accelerate development of blockchain games and global brands entering the space. With over $2.3 billion in secondary trading volume and 20,000 NFTs traded daily, the features Magic Eden brings to the Polygon community are invaluable.
Migration of DeGods and y00ts - Aside from cultivating strong partnerships from the ground up, Polygon’s expansion includes attracting top-tier talent from established projects. DeLabs, the LA-based startup behind top Solana NFT projects DeGods and Y00ts received a $3 million grant to migrate to the Polygon network.
Cool Cats Activation on Arc8 Gaming Platform - Blue-chip collection Cool Cats took over Arc8’s gaming platform to engage with collectors and new fans. The event brought in 10,000 daily player engagements with Cool Cats IP and 20,000 in direct audience exposure.
Besides gaming-related partnerships, the network has joined forces with some of the largest Fortune 500 companies to boost the adoption of its blockchain technology and NFT use cases. Some of the noteworthy partnerships include:
Top 12 Partnerships of Polygon (Source: Blockchain Council)
Those partnerships with industry leaders are crucial in its efforts to maintain its position as a leading blockchain platform for NFT and to stay competitive in the market. By joining forces with major players in the industry, Polygon can continue to innovate and improve its services, while increasing its brand awareness and global reach.
The Polygon network is well-positioned to become a leading blockchain in the Web3 gaming space. With an ambition to produce high-performing games, projects and an ever-growing list of hyper-visible brand partnerships, their vision to onboard the next billion users may not seem so distant after all. Through scalable and secure infrastructure crucial for the next generation of digital products, combined with innovative strategies and initiatives, Polygon is a strong contender to become the preferred blockchain for the future of Web3 gaming.