In the first quarter of 2024, investor sentiment in the crypto market was revitalized. The landmark litigation against the SEC concluded, allowing US investors access to spot Bitcoin ETFs. This development attracted large institutional investors to Web3, resulting in US-based ETFs surpassing initial cash inflow projections and sparking a bull rally that pushed Bitcoin to an all-time high.

However, investments in Web3 gaming remained cautious, with $288 million invested in the first quarter. This changed in April with a surge of $988 million, the highest monthly investment since January 2021.

The rise in investments mirrors the early 2021 GameFi growth driven by new technologies like NFTs. From 2020 to 2021, the total market capitalization of NFTs increased 29-fold, and DeFi protocols reached peak value. Similarly, April 2024 saw a steep rise in investment due to Ethereum's new Account Abstraction technology and the growth of Layer 3 blockchain solutions. Notable activities included a16z raising a $600 million gaming fund, Bitcraft Ventures launching a $275 million GameFi fund, and Ubisoft Studios exploring blockchain collaborations.

Strong user engagement supports this trend, with nearly 3 million daily active wallets for gaming dApps and an 83% increase in active blockchain gamers in 2024, reaching 90.3 million users.

Account Abstraction and Layer 3 are seen as transformative as NFTs and DeFi were in 2021. These technologies address the desire for a better user experience in GameFi. Account Abstraction allows for programmable smart contracts, eliminating reliance on seed phrases, and simplifying the user experience. It also introduces sponsored transactions to alleviate gas fees. Layer 3 solutions enhance transaction speed and reduce gas fees, providing a seamless, free-to-play experience comparable to Web2 gaming.

With substantial financial backing and advanced technologies, the GameFi sector is poised for significant growth, focusing on user experience and potentially positioning blockchain gaming as a superior alternative to Web2.