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Digital Assets On Ethereum: The Next $100BN Market


Gaming is now a $137B industry and the market for buying in-game items or “virtual goods” is in the tens of billions of dollars. These items typically allow players to customize the appearance of their character; equipping rare weapon “skins” or donning unique items of clothing. The market for these assets has existed for decades in games like Second Life, however the rise of free-to-play titles like Fortnite have sky-rocketed their demand in recent years.

These virtual goods are managed and issued by the game platform, with players often able to buy and sell these items on an open marketplace. These secondary market trades are subject to hefty platform fees (10%) and major restrictions have been put in place as a result of hacks and exploits. Furthermore, the proceeds from a sale are converted to store credit and cannot be withdrawn to a bank account.

Ethereum-based in-game items

The way in which in-game items move between owners is expensive (often prohibitively so) and inefficient. The market outlined above will be radically different in a matter of years thanks to Ethereum as we’ll see below. However, rather than mindlessly detailing the benefits that blockchain tech brings to tokenized assets (speed, security, trustlessness etc), this article will examine a number of radically different market mechanisms that will be enabled by Ethereum – specifically for tokenized assets and in-game items.

CSGO dragon lore


Luxury items typically have a rental market behind them, and in the gaming world, there are plenty of expensive items that would benefit from such a market. A “Factory New” Dragon Lore in Counter-Strike: Global Offensive would set a player back over $1,000. Or, if it’s tagged with stickers, as much as $61,000. However, instead of paying full market price for these items, a player could rent the item from the owner at a specified rate. All logic, from the transfer of ownership to the collection of rent would be conducted by the Ethereum blockchain. Owners of these items would benefit from taking close to 100% of the income at a negligible expense while those renting will receive more efficient pricing.


Players who have value stored up in their in-game assets would be able to unlock liquid currency by putting these virtual goods up as collateral. MakerDAO, which we have touched on before, is currently working on a multi-collateral system that allows users to withdraw a USD-pegged token by putting up ETH, BTC and others. In the future, there is no reason why in-game assets could not be used as collateral in such a system, allowing players to effectively take a loan from the in-game items that they own.


Games will not be played forever. When a title does come to an end, the item’s value is reduced to nothing more than a platform-restricted collectable whose ownership is tied to the existence of said platform. Collectables, of course, have the potential to be worth millions, however with such restrictions that value is guaranteed to be limited. With game item ownership on Ethereum, there are no restrictions and the history of each asset is fully recorded and transparent. Those who own these collectable in-game items will also be able to put them on display on websites or even the real world (through augmented reality) using open source software that recognizes and renders their unique contract address.


As with anything in the blockchain world, there’s usually an interesting gambling aspect too. In-game “loot boxes” issued by the game developer provide players with the chance of winning rare and expensive virtual goods by paying a fee to open them. The item received is invariably worth less than the cost of the loot box, however the chance of winning something big has led to billions being spent on this new form of roulette.

On Ethereum, a simple application could be built to allow players to put up their own rare and desirable in-game items as a reward in these loot boxes. These items could then earn a return from the funds spent by players attempting to win the item staked. Such an application is highly niche, however it highlights an entirely new approach to income-generating assets that will be enabled by Ethereum moving forward.

Do we actually want this?

Being a gamer used to be a simple and honest life. Players would purchase a game in a real world store and play it through with no costly “DLC” content or loot boxes to open. Without warning, the gaming market has morphed into something akin to the stock market, with players actively speculating on the price of items and taking a profit.

in-game item marketplace on steam

Steam Marketplace orderbook for a loot box in CS:GO

Thanks to the costly nature of existing marketplaces, speculation is nowhere near as rife as it would be under free market conditions. Fees levied by these marketplaces make turning a speculative profit challenging. However, a move to Ethereum would unleash this market and create billions of dollars worth of trading volume overnight as speculation became more viable.

Gamers are also invariably young. Fortnite’s in-game currency, “V-Bucks” were topping Christmas lists globally last year but regulation by the game’s developers is in place to protect them from dodgy trading practices. A move to Ethereum would push kids into the big bad world of low-regulation stock market trading.

And a low-regulation environment would raise other questions. EA Sports, the publisher of FIFA, recently announced that they would be fixing the price of Emiliano Sala-related cards in their market to avoid owners benefiting from inflated prices following the player’s untimely death. Tragic events often have market-moving outcomes and having regulators in place to determine how these markets should move may prove divisive. While a shift to Ethereum would remove regulators from the in-game item market, it would also lead to ethical questions for many.

Will marketplaces move to Ethereum?

The main question as to whether this multi-billion dollar market will ever come to fruition is dependent largely on the incumbent marketplaces. Gaming behemoth, Steam, is making hand over fist in this economy and currently has no incentive to move to a platform like Ethereum. The push will have to come from the players and developers themselves.

gods unchained and cryptokitty collaboration

Players unquestionably benefit from true ownership of their in-game items. Particularly when the market mechanisms described above begin to gain mainstream traction. Developers also benefit by offering their players this new type of asset that rivals on the Steam marketplace do not have. There is also some interesting interoperability coming to light between games; a very early example of this is in the Ethereum-based game Gods Unchained, which recently announced that they will offer in-game Cat Statues to those who prove ownership of a CryptoKitty. These statues will also resemble the CryptoKitty that is owned by the player, allowing them to gain additional utility from an existing in-game asset by benefiting from it on another game.

It is this author’s opinion that over half of all in-game assets will exist on Ethereum in the next 10 years. Such a migration would be hugely beneficial for developers and players alike; removing inefficient platform fees from the economy, enabling interopability of in-game assets and providing players with real ownership of their gaming assets. Of course, the power of the incumbents cannot be over-estimated, and much like the friction between bankers and Bitcoin, we can expect similar concerns being raised among those who currently control this multi-billion dollar market.

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Nick Founder