Blockchain Games: What On and Off-chain factors affect the volatility, returns, and liquidity of Gaming Crypto Tokens
Researcher ORCID Identifier
Date of Submission
Open Access Senior Thesis
Bachelor of Arts
Professor Nishant Dass
2022 Sumer S Sareen
Blockchain games took the internet by storm as they offered a new way for users to play video games, own the assets in those games, and benefit monetarily from their efforts. Through Non-Fungible Tokens (NFTs) and cryptocurrencies, new, Web3 games ushered in a unique asset class for retail and institutional investors to diversify into and benefit from. This paper uses cross-sectional data from 30 blockchain gaming companies to identify on and off-chain factors that affect the company’s token volatility, returns, and liquidity. A multiple linear regression found the percentage of tokens dedicated to a company’s private sale and rewarding users, the length of a token’s vesting period, if the token has a fixed supply, and tokens based on the Solana or Polygon blockchains positively affect the volatility of that token. Conversely, the Monthly Active Users of the game, the token’s market capitalization, the amount of funds raised by the company, and the game genre negatively affect volatility. Funds raised, game genre, and Solana-based tokens were also significant in the returns model. Lastly, the number of faucets for the game and the percentage of tokens dedicated to rewards and the private sale showed significance in the liquidity model. This paper adds to the literature in the NFT, cryptocurrency, and blockchain gaming spaces.
Sareen, Sumer, "Blockchain Games: What On and Off-chain factors affect the volatility, returns, and liquidity of Gaming Crypto Tokens" (2023). CMC Senior Theses. 3192.
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