In perhaps the first notable Web3 gaming funding round of 2024, play-to-earn platform Arcade2Earn has raised $4.8 million in a private token round conducted by Crypto.com capital.
The gaming platform, currently being built on Ethereum and Avalanche, will be stepping into a sector of activity undergoing profound changes while still growing at an impressive pace. The industry reportedly generated $154.46 billion in 2023, and estimates by Fortune Business Insights point to Web3 gaming growing at an average of 21.8% per year until 2030.
Gaming is one of the most common on-ramps for new users of the on-chain world. Last year, Web3 games were responsible for 34% of all activity in decentralized apps, attracting over 1.1 million users daily. For DappRadar, this makes games "the cornerstone for mass adoption" of blockchain technology.
Despite its growing popularity, the industry is still surrounded by the negative impressions left by the failures of its early days, such as play-to-earn games that turned out to be nothing but Ponzi Schemes, NFT game flops that never worked properly and the general cranky and dull mechanics of the first on-chain gaming projects.
Gaming studios and software developers are fighting hard to turn the narrative around by focusing on quality and technological development. Of the $2.9 billion in funding that blockchain games collected in 2023, one-third went into infrastructure.
GameFi is also getting more robust with the launch of several triple-A games like Illuvium, gaming platforms like The Sandbox, and gaming blockchains such as Skale, Base or zkSync-Era.
Quality, however, takes time. Arcade2Earn started building the platform in 2021, and only last month launched an alpha version. Although notably, midway through development the team shifted from building on Solana to Ethereum and Avalanche.
In an interview with The Block, co-founder and CEO of Arcade2Earn Josh Poole said, "This was a difficult decision after having built most of the product out on Solana already, but it was important to us that we not cut corners on functionality."
While it delayed the project's release, Poole believes the decision was best for the $ARC token.
"We made this decision to ensure that our main liquidity token would be anchored by the liquidity depth, security, and stability of Ethereum, while enabling us to leverage the speed, lower transaction cost, and higher throughput offered by Avalanche."
On Feb. 27, the project will have a public token sale of the $ARC token on the Fjord Foundry platform, and until then, Arcade2Earn has several airdrops planned to onboard more users.