Axiom Zen’s CryptoKitties, which is essentially a digital version of Beanie Babies based on the Ethereum blockchain, which describes its product as one of the world’s first blockchain games, uses blockchain technology to collect and “breed” digital cats. Users can buy colorful, googly-eyed cats, some of which cost thousands of real-world dollars, to trade and “breed” more digital cat offspring.
Per a Saturday report in Business Insider, investors put an additional $12 million into CryptoKitties in March after users had already pumped millions of dollars into the network buying and trading the cats.
At the time of the $12 million investment, Business Insider wrote, one investor, told the site the project “embodied one of the most important and applicable use-cases of the blockchain: The ability to safely store digital collectibles online.”
To the extent that everyone’s CryptoKitties are safely stored, that’s true. But that’s an entirely different question than whether they’ve continued to hold value. But it looks like CryptoKitties itself could be in danger of becoming a short-lived novelty.
The number of CryptoKitties transactions decreased in June by 98.4% compared to its peak of 80,500 transactions back in December 2017, according to data from Bloxy. The game is still among the most popular options for ethereum-related gaming, but public interest in buying and selling them seems to have waned significantly in recent months.
… In April, Greylock Partners took a closer look at the usage of some of the most popular decentralized apps. Drawing on data from DappRadar, the firm estimated CryptoKitties daily active users at around 907. On Friday, that same metric on DappRadar had fallen to around 300 daily active users.
The Diar analytics show that the “median price of sold kitties peaked at $41 and now is constantly at about $5,” with daily trading volume down to around $21k from $2.3 million in December 2017.
Cryptokitties usage down 98.5% since its peak. Less than 200 DAU. pic.twitter.com/s7PpyBz5bo
— nic carter (@nic__carter) June 8, 2018
“Rare Bits lists roughly 700,000 CryptoKitties for sale while only 4,200 have been sold in the last week,” the Diar analysis added.
For what it’s worth, the company says that lower trading volume does not necessarily mean that the cats themselves are becoming worthless. In an email, co-founder Bryce Bladon told Business Insider that one of the factors prohibiting people from investing further was the ballooning cost of transactions, since it’s based on the Etherum blockchain and subject to the network’s restrictions.