Solana Foundation President Lily Liu sparks debate over relevance of Web3 gaming

• Solana Foundation President Lily Liu stated that Web3 gaming is unlikely to return, sparking widespread debate across the industry.
• Reactions were divided between criticism of Web3 games and support for an improved blockchain gaming experience.
• The crypto gaming sector market cap has plunged to $4.5 billion from its 2022 high of $35 billion.

Solana (SOL) Foundation President Lily Liu stirred mixed reactions on Friday following a controversial statement suggesting that "gaming on a blockchain is not coming back."

Liu made the remarks in response to a Polymarket discussion earlier in the week that suggested Meta would shut down its metaverse project after pouring $80 billion into it.

Crypto industry reacts to Lily Liu's comments on Web3 gaming

The comment quickly triggered widespread debate across the crypto industry. Critics said the remarks could undermine ongoing efforts to develop the Web3 gaming space. Supporters, however, viewed her comment as a candid assessment of a sector that has struggled to deliver sustainable user adoption.

Solana founder Anatoly Yakovenko called on developers to "prove her wrong," sparking even more debates on the subject.

Analyst Nic Carter bluntly agreed with Liu, calling play-to-earn the "dumbest thing of all time." He pointed to Axie Infinity's model as a particularly dark episode of digital sharecropping that should leave those involved feeling ashamed.

In contrast, a key community member argued that blockchain technology continues to offer meaningful advantages in gaming, particularly through asset tokenization and emerging monetization models.

"Blockchain fixes more problems in gaming than any other industry. Tokenization of assets is growing. Got a secular gambling tailwind. Financialization of gaming is a mega trend. Embarrassing statement by the president of Solana Foundation," he wrote on X.

Helius CEO Mert Mumtaz suggested that elements of blockchain gaming already exist in the form of memecoin trading ecosystems, likening them to competitive multiplayer environments.

Following the arguments, Vibhu Norby, Chief Product Officer at the Solana Foundation, responded with a satirical post, suggesting Liu's comments were both accurate and damaging, while joking that she should be required to play existing Solana-based games as a consequence.

The broader crypto gaming sector has faced a difficult cycle since its peak in 2021–2022. The crypto gaming sector market cap has significantly declined over that period, dropping from a peak of $35 billion to $4.5 billion at the time of writing, according to Coingecko data.

Billions of dollars in funding from firms such as a16z, Animoca Brands, and Framework Ventures fueled rapid growth in titles like Axie Infinity, Stepn, and Solana-native Star Atlas. However, many projects later struggled with declining token values, unsustainable play-to-earn models, and waning user engagement.

More recent efforts have shifted toward hybrid approaches. Projects such as Off the Grid by Gunzilla Games and Mythical Games' mobile titles, including integrations with brands like FIFA and Pudgy Penguins, aim to combine traditional gameplay with optional blockchain features.

Solana is trading at $89.8 on Friday, up 1% over the past 24 hours as of writing.