New research from blockchain analysis sites Bloxy and Diar highlights the falling number of users on the popular digital pet service CryptoKitties. Dubbed the first blockchain game in the world, the platform allowed the breeding and sale of colorful and unique digital cats. In the past three months, the number of users and consequently transaction volumes have fallen to one-tenth of the December numbers. The game’s novelty could meet the same fate as the famed Pokémon Go game, which entered the public consciousness with a bang and vanished soon after.
No One Wants Cute Cats Anymore
The Internet is synonymous with cats. CryptoKitties leveraged early interest in the industry and turned it into a bunch of colorful cats. Users could buy these “foundation” cats and breed them to sell to other traders. The novelty of the game lied in the fact that every cat was unique, and the owner could brag about being the sole owner of the said feline. The cats were considered collectibles, with one of them reportedly selling for around $100,000.
In December 2017, when Ethereum was approaching its all-time highs, each cat was being sold for about $41. Now the number has gone down to $5. The transaction volume has taken a severe hit. The platform had only 115,000 transactions in May, barely a tenth of the 1.3 million transactions in December. Diar noted:
“There are currently under 2000 daily active users of all Ethereum based games and the weekly traded volume is approximately $1Mn. It’s not exactly clear whether NFTs were even as popular as originally thought. Venture capital firm Greylock Partners found that even at its peak, CryptoKitties only had about 14,000 daily users.”
A $12 Million Investment Gone Wrong?
In March this year, the platform received $12 million in funding from several top-notch investors, including Union Square Ventures and Andreessen Horowitz. The investment raised several eyebrows, but the investors remained sure that it could be a vital experiment in the ability of blockchain to safely store digital collectibles.
The game is now being compared to Beanie Babies and Pokémon Go, both mass phenomena that failed to capitalize on their initial “novelty” in the long run. The platform once famously blocked Ethereum blockchain, causing transaction delays.
However, the problem doesn’t lie in the momentary frivolousness of novelty alone. The Ethereum network, used to host this game, has struggled with scaling, which results in discouraging transaction fees. While the blockchain is looking for solutions, CryptoKitties founder Bryce Baldon remains convinced that he could keep his user base engaged.
He told Business Insider:
“Since launching CryptoKitties and running headfirst into the challenge of scaling, we’ve made numerous product and design decisions to reduce the number of superfluous smart contract interactions.”
“We’re delivering numerous ways to engage with CryptoKitties outside of buying and breeding them.”