On-chain Collectibles: Are Gachas Here to Stay?

Key Takeaways

• Gacha-style collectible platforms have become some of on-chain crypto's largest revenue generators, with Collector Crypt and Courtyard posting a combined $260m in cumulative net revenue and monthly growth as high as 75%
• Growth looks structural at the platform level, but demand coming from traders, degens, and points farmers chasing the TCG market's recent price momentum introduces uncertainty around sustainability
• FWA's attempt to apply the same mechanic to NFTs briefly beat Collector Crypt in daily revenue, then collapsed once its token emissions ended, serving as a live case study in what happens when the gacha mechanic has no real cultural interest backing it
• The case for bringing collectibles on-chain remains clear, and will be a key factor in onboarding traditional collectors organically, and sustaining growth once speculative interest cools off

Gacha-style collectible platforms have taken a large step forward over the past year, with platforms like Collector Crypt and Courtyard leading the pack. With the former, monthly net revenue grew 75% to just shy of $16m in June, building off a key integration with Solflare. Meanwhile, the latter posted north of $20m in net revenue in both June and July, accompanied by a peak DAU count of over 15.6k early this month. The upward trend of metrics and activity confirm a growing PMF of gacha-style products and the trading and collecting of collectibles on-chain, but how much of this growth is durable, and how much is cyclical?

Understanding the Gacha Product & Business Model

Before answering this question, a clear understanding of these platform’s products and business models must be established. While both Collector Crypt and Courtyard provide on-chain marketplaces for collectors to trade their collectibles, marketplace fees are far from their main product and revenue stream. That prestige is reserved for their gacha systems, where users open blind boxes for one of the many possible listed rewards. These rewards range in rarity and value, with pull rates for the rewards in the highest tier usually close to 1%. Each platform provides various tiers of gacha options, ranging in cost, expected value, and even type of collectibles (e.g. Pokemon, One Piece, etc.). 

To support this, each platform first acquires a significant supply of physical collectibles. In the case of trading card games  (TCGs), this is done largely through buybacks’, where cards and slabs are bought from sellers in bulk at a discount, typically 5-20% below market value. From there, the physical assets are vaulted and minted on-chain, and packaged into the respective gacha prize pools. After opening the gacha blind box, users then choose from three different options.

Option 3 plays a key role in the platform’s business model, both from a product and revenue perspective. While easily brushed aside as a courtesy feature for users, it is actually the engine that powers the sustainability of the gacha system. Buybacks directly from users mean that unwanted inventory does not simply remain idle, but instead, re-enters the prize pool to be pulled again by future users. As such, the platform does not require a consistent stream of new inventory and physical stock to keep the gacha running and sustain volumes. Overall, this repeated buy low, sell the gacha, and buyback unwanted inventory process creates a cycle that skyrockets platform growth.

Structural or Cyclical?

The above cycle shows up in more than just the monthly figures above, compounding into some of the biggest numbers in on-chain collectibles to date. Collector Crypt has done over $1.8b and $80m to date in cumulative volume and net revenue respectively while Courtyard is close to $180m in cumulative net revenue, numbers comparable to that of leaders of other well-established crypto sectors. In this case, there is no doubt that the element of growth driven by the gacha-and-buyback model is structural and sustainable to a certain extent. It has not only resulted in strong business metrics, spurred the increase of new entrants like Beezie and PlayKami, but also accelerated the extension of the model to other TCGs and collectible categories beyond Pokemon, where most of the volume has stemmed from. 

However, this growth is not without a catch. While the roots of the collectibles industry can be traced back to the 19th century in the form of antiques, the major surge in real-world popularity of TCGs like Pokemon have only happened over the past few years. PokeViews Top 250 Index, a collector-created index that tracks the Pokemon TCG market using an equal-weighted basket of 250 of some of the more valuable and actively traded cards, has risen over 180% since April 2024. On the other hand, TCG Charts’ estimates of the total market cap of PSA graded Pokemon cards alone, has risen about 67% since last August to $10.75b this month. While to be taken at face value, this depicts the sheer growth of the Pokemon TCG market in recent times. That distinction matters more than it might first appear.

Multiple periods of boom in prices and regular articles covering new ATH sales for cards is a magnet for market participants outside of the genuine collector, and on-chain gacha systems serve as the most convenient way for these participants to gather. Degen gamblers chasing a quick dopamine hit flock to blind boxes, which boast positive expected value and limited downside through buybacks. Speculative crypto-native traders and farmers looking to gain exposure to a volatile asset class, and the potential of large incentives and airdrops too. Though each group has their own goals, they share the same fact that neither actually want the underlying collectible, and only require a strong underlying narrative and cultural demand. While these users still drive value to the platforms, there is sufficient cause for concern with stickiness and how this trickles into sustainability of the platforms.

While each situation is unique, the current state of TCGs and gacha platforms is reminiscent of the sneaker market and speculative resellers in the late 2010s and early 2020s. If the TCG market experiences downturn and values eventually mean-revert the way sneaker resale premiums did, degens, traders, and farmers no longer have incentive to stick around TCGs, and gacha platforms could potentially see a major drop in volumes and revenue.

FWA: When the Mechanic Isn’t Enough

Fake World Assets (FWA) was launched in July, attempting to replicate a similar gacha model with NFTs as the underlying assets instead. Instead of securing stock prior themselves, the platform would allow users to deposit their own NFTs paired with buyback collateral, contributing directly to the supply for the gacha prize pool. While the platform's daily revenue briefly overtook that of Collector Crypt, its success was extremely short-lived, and metrics were not sustained.

Most of FWA's NFTs were illiquid, low-demand collections with little to no recent price and trading activity, and users were simply utilising the platform's gacha as a means to potentially exit or generate yield from their otherwise valueless positions. This resulted in unsustainable demand for gacha attempts, even from the user groups that they would regularly appeal to, leading to the platform having to manufacture momentum through the use of large token emissions. Since the end of the emission period, various protocol metrics have since declined.

This draws an even clearer picture around the key role that inherent cultural popularity and price volatility of the underlying asset plays in the implementation of a gacha model. At the same time, it also paints an eerily realistic outcome for TCG-focused gacha platforms in the case of an underperforming market, where underlying assets are much less desirable, and are more susceptible to sudden drops in value.

The Value Proposition of on-chain Platforms

Outside of the discussion on sustainability of the current growth of gacha platforms, there is no question that there are strong value propositions to bringing collectibles on-chain. 

1. Verifiable randomness: Traditional gacha systems, livestream pack openings, and in-game loot boxes have always forced users to trust odds provided by operators. on-chain VRFs allow users to recompute openings from scratch in their browser or via API calls using transaction memo data, verifying that all odds are fair and untampered.
2. Custody and redemption rights: Tokenised representations of collectibles allow for easy movement of assets while keeping redemption rights clear and transparent, all while the underlying physical collectible remains securely vaulted and under custody, not subject to transport with every transaction. A single collectible can exchange hands multiple times on-chain, and only have to make one physical trip to its final owner when eventually redeemed.
3. Liquidity and settlement: Likely a significant contributor to the growth of platforms like Collector Crypt and Courtyard, this forms one of on-chain collectibles’ largest value propositions. Physical collectibles have always been limited by a relatively thin, slow, peer-to-peer market, where factors like shipping times, escrow risk, regional price gaps serve as added friction for collectors looking to trade their assets. Pushing collectibles on-chain collapses all of that into global, 24/7 settlement at a clear established price, where buyers and sellers alike are no longer limited by geography and counterparty risk outside the smart contracts themselves as well.
4. Innovation: The bringing of collectibles on-chain opens up multiple new realms of utilisation for the asset class. They are no longer limited to being physical assets that sit idle on display, or simply collected, but can serve as building blocks for future products. Tokenised cards for example, could be used as collateral, fractionalised, or even bundled into an index, none of which possible with the physical version. 

While not a replacement for traditional collecting, the blockchain serves as an additional layer that builds on their popularity, and tries to address the inherent limitations with physical assets. 

Conclusion

In the end, the sustainability question ultimately comes down to who is actually opening the gachas and packs. With blockchain rails stripped, it's the hobbyists, lifelong fans, parents, and serious collectors who value physical possession and display, and often genuinely disregard resale value. Online, it's crypto-native traders drawn to instant liquidity, speculation, and the thrill of the pull itself. Putting the gacha mechanic on-chain doesn't just add efficiency for both groups, it tilts the whole experience toward the latter, and that is exactly the group most likely to disappear the moment the narrative cools. This skew is not necessarily permanent, and as the case for bringing collectibles on-chain becomes better understood amongst traditional collectors, it is plausible that we see a gradual shift towards the audience that these platforms are best suited to serve. We already see platforms starting to take their marketing efforts offline and directly to traditional collectors. Growth by that kind of organic onboarding would be a far stronger signal of long-term sustainability.

The category has clearly found product-market fit, but what is still unproven is durability of metrics and growth once the current wave of speculative interest cools, whether that is due to the TCG market's own price momentum fading or the next asset class testing whether the mechanic works without genuine demand underneath it. For now, gacha-style platforms are growing to become some of the largest revenue drivers on-chain, and have definitely earned their place as one of crypto’s most convincing PMF stories to date.

NFA + DYOR