With play-to-earn game Axie Infinity’s all-time NFT sales volume hitting over USD 2 billion in mid-September, the meteoric rise of blockchain games has attracted the attention of investors, who seek to cash in by pouring funds into video games built on top of blockchains to merge finance with gaming.

Huobi Ventures, the investment arm of one of the world’s largest crypto exchanges, has jumped on the bandwagon. In September, it earmarked a USD 10 million fund to invest in early stage gaming finance (GameFi) projects. “The decentralized gaming sector will be based on itemization,” said Huobi Ventures’ investment manager Harry Yin to KrASIA in an email interview. Earlier, in May, Huobi launched a USD 100 million fund for decentralized finance (DeFi) and non-fungible token (NFT) projects, as well as mergers and acquisitions within the blockchain space.

Huobi sees GameFi as a corner within the crypto sector where new infrastructure is being rapidly created. These are applications that go beyond the financial speculation rife within the crypto community to reach a much broader user base, particularly individuals who may have low starting capital or who are simply seeking new forms of entertainment.

The exchange and its investment arm are not the only ones staking part of their future in GameFi. Justin Sun’s Tron Foundation also announced on August 10 the launch of its USD 300 million fund to invest in GameFi projects over the next three years, per a report by Coindesk. Another major crypto exchange, OKEx, also launched a USD 10 million fund to support similar projects by issuing grants, organizing hackathons, and providing listing and marketing support.

Over 2 million unique wallets were created across all blockchain networks in August, up 883% in the same period last year. Blockchain gamers contributed to a sizable portion of this growth, with 883,000 wallets interacting with game-related smart contracts on average each day, according to a report by DappRadar, which tracks and analyzes different decentralized applications.

An array of notable GameFi startups have emerged to develop new ways of blending video games with blockchain activity. The video game sector is an industry that is expected to exceed USD 200 billion in value by 2023, rising from 2020’s USD 155 billion. One notable example of a firm that is introducing blockchain applications to mainstream gaming is Yield Guild Games, which loans out gameplay NFTs to members. The company then takes a cut of the player’s in-game earnings.

General interest in decentralized gaming has extended to broader discussions about the metaverse, which is often framed as the next iteration of the internet that will converge our physical and virtual worlds within one space. But Facebook, which in late September announced a USD 50 million investment into a global research program to study ways for building metaverse technologies responsibly, highlighted in a blogpost that it will take ten to 15 years for the ecosystem to mature.

“The metaverse isn’t a single product one company can build alone. Just like the internet, the metaverse exists whether Facebook is there or not. And it won’t be built overnight,” Facebook said in the blogpost.

At the moment, the most significant challenges in GameFi and its related systems are infrastructural maturity and user adoption of virtual reality, augmented reality, and mixed reality, according to Huobi Ventures’ Yin.

Read this: What does Axie Infinity’s meteoric rise tell us about the play-to-earn game industry?