The concept of Web3 gaming and the metaverse gained significant traction in the last market cycle, allowing users to own, buy, and sell digital assets with verifiable ownership rights. This set the foundation for creating gaming economies on-chain, enhancing the value of gaming assets and allowing players to monetize their skills.  However, with the advent of AI and new L1 and L2 chains entering the market, the narrative has lost significant mindshare over the past months.

Source: kaito.ai  – The Metaverse and GameFi narratives have been declining in narrative mindshare over the past 12 months, currently representing ~7% of the total.

Inside this market sector, Axie Infinity set the stage for how large the total addressable market (TAM) for gaming digital assets is. The price of $AXS soared from $3 in June 2021 to a local top of $82 in September, and finally to an ATH of $157 in November.