Trading Card Games (TCGs) have evolved into a global industry with entertainment, collection, and investment attributes since the launch of Magic: The Gathering in the early 1990s. Over the past thirty years, the number of circulating cards has reached hundreds of billions, with a growing player and collector base worldwide.

Among all TCG brands, Pokémon TCG undoubtedly holds a dominant position. As of 2023, over 52.9 billion Pokémon cards have been produced globally, covering 14 languages and nearly 90 countries and regions, far surpassing other competitors in both audience reach and revenue scale. Its success stems not only from the strong IP appeal of Pokémon games, animations, and movies but also from its design that combines playability and collectible value.

According to public data, Pokémon TCG's position in the global TCG market is exceptionally prominent. In 2022 alone, its revenue in Japan accounted for 11% of the global TCG market size. Looking ahead, forecasts suggest that the global TCG market is expected to grow to $11.6 billion by 2030, with a compound annual growth rate of about 8%. This growth is driven not only by the rise of collector culture but also by the continuous expansion of digital channels and secondary markets.

Geographically, North America and Europe are the most mature markets, with stable player bases and well-established tournament systems; Japan, as the birthplace of Pokémon, has maintained strong demand for a long time. In 2023, Pokémon TCG's revenue in Japan was equivalent to the total of 14 other TCGs, with a market share close to 50%. Meanwhile, Southeast Asia and Latin America are rapidly expanding, showing significant incremental potential.

With the development of online trading platforms, the spread of social media, and the growth of cross-cultural fan communities, Pokémon cards are gradually evolving from mere entertainment consumer goods into global assets with both collectible and investment attributes, further solidifying their core position in the TCG ecosystem. The investment value of Pokémon cards has long been underestimated, but data shows that their returns over the past 20 years have even surpassed the S&P 500 and Meta, highlighting their unique investment properties.

Before understanding the on-chain Pokémon TCG market, it is essential to grasp its operational model.

Storage Custody: Cards are sent to a vault (or directly to a grading agency); complete link registration, photo documentation, and certificate verification; maintained in a temperature and humidity-controlled environment.

Certification/Grading: The vault sends cards for PSA/CGC/BGS grading; once graded, they are returned to the vault, updating the certificate number and image data.

Listing for Sale: Cards are listed on markets/auction houses connected to the vault; a fixed price or reserve price is set; the system directly calls images and certificate data from the vault.

Transaction and Settlement: Buyer pays → Platform funds custody → Vault ledger transfer (ownership transferred to the buyer).

Delivery Method (choose one):

• Vault-to-Vault: The buyer continues custody, and ownership is transferred within the vault. The custodian updates ownership in their ledger.
• Physical Withdrawal: The buyer requests shipment; the vault arranges insured transportation, with costs borne by the buyer.

After-sales/Asset Management: Cards can be resold within the vault, consigned for auction, or (subject to compliance) fractionalized; the vault's statements and link records can serve as traceable proof of origin.

Pokémon TCG has established a mature ecosystem and business model, laying a complete infrastructure for its on-chain version. The next step is to consider: In what aspects will the synergy between Pokémon TCG and Web3 manifest?

Real Rarity and Credible Verification: Each card, once minted as an NFT, will leave a permanent record on the blockchain, including rarity and authenticity information, achieving on-chain ownership confirmation and global free circulation. NFTs serve as digital ownership certificates, corresponding to a unique Token Address, and include a minting timestamp and complete transaction history, ensuring the authenticity and traceability of the cards.

Cross-Platform Free Trading and Liquidity: Once cards are NFT-ified, they become blockchain assets that can be freely traded across different markets, significantly enhancing liquidity. With the development of on-chain TCGs, platforms like Collector_Crypt and Courtyard.io now offer round-the-clock trading support. Compared to traditional physical cards that can only be traded through specific channels or privately, NFT cards enable 24-hour global circulation, significantly lowering transaction barriers and friction costs.

Lower Fees: Traditional TCG trading platforms (like eBay) charge fees of over 13%, resulting in high costs for sellers; in contrast, on-chain platforms like Courtyard charge about 6%, and Collector_Crypt even charges only about 2% (which will be compared in detail later), showing a clear advantage in fees and gradually attracting more users to on-chain trading.

The Beta Effect of Pokémon TCG: Its investment attributes cannot be overlooked, but for investors unfamiliar with the Pokémon ecosystem, entering this field often presents a high barrier. The core value of Web3 lies in quickly realizing the presentation of value; any asset or information with a premium can be tokenized, gradually forming the on-chain Beta of TCG Pokémon. Several projects benefiting from Pokémon premiums have emerged on-chain, such as $CARD, which achieved a tenfold price increase, or the upcoming airdrop of the Phygital project $PKMN, providing investors with new alternative investment targets.

The core functions of on-chain TCG platforms are mainly divided into two categories:

Gacha: Users obtain digital cards randomly through on-chain blind boxes or card packs, enhancing gamification and entertainment. For example, Courtyard's blind box mechanism allows players to experience the thrill of opening packs while ensuring that all cards correspond to real assets stored in a professional vault.

Secondary Market: Users can freely trade or resell the cards they obtain on the on-chain platform. Some platforms even offer a buyback mechanism, such as Courtyard supporting users to sell unsatisfactory cards back to the platform at 85%-90% of the original price, ensuring basic liquidity and reducing user participation risk.

According to data from the past two months, the trading volume in the TCG market has shown a continuous upward trend: from about 10 million in mid-June to about 40 million in September, an increase of nearly four times. Initially, the market share was almost entirely occupied by Courtyard.io, but with the addition of new platforms like Collector_crypt and Phygitals, as well as various airdrop expectations stimulating user activity, these platforms' shares are gradually expanding.

So, what level has the trading volume in the on-chain TCG market reached? As part of the on-chain RWA track, xStock's trading volume from mid-June to early July was comparable to that of TCG. However, starting in early August, TCG's trading volume significantly increased, and by September, it had gradually surpassed xStock, reaching more than three times its scale. When considering "which assets are more suitable for being on-chain," on-chain TCGs demonstrate stronger appeal compared to on-chain stocks, further confirming their high compatibility with blockchain.

Key Points of This Section — Overview of On-Chain TCG Platforms

NFT cards issued by various platforms generally correspond to physical ownership and are equipped with different authenticity verification mechanisms.

They are deployed on chains like Base, Solana, Polygon, and Flow, with the common feature of low fees and fast transactions, providing advantages over traditional platforms.

Transaction fees are generally lower than those of traditional platforms like eBay, while also supporting royalty sharing, benefiting creators and holders.

Global shipping is supported, with customs duties applicable in some regions, and a few platforms have additional withdrawal or storage fees.

Collector is currently the leading platform in the TCG collectible asset market, with its core business based on the sale and circulation of card assets on Solana. The overall mechanism is:

Physical cards are stored → Minted into redeemable NFTs → Users can open "electronic packs" or trade on the secondary market at any time.

The platform has introduced a GACHA capsule card mechanism, which not only provides a highly realistic pack-opening experience but also serves as the main source of revenue for Collector_crypt. The official website shows prices of 50 USDC and 250 USDC.

Based on the official probability distribution and market pricing calculations, Collector's Gacha model possesses positive expected value characteristics. The expected value of a single card draw is approximately $258.89, higher than the cost of $250. This means that participants, on average, have a positive return in long-term statistics, with most users able to draw cards close to the cost to reduce loss risk, while in some cases, there are explosive upward potentials (Epic and Legendary cards can yield several times or even tens of times returns). Combined with instant settlement and buyback mechanisms, Collector effectively transforms the entertaining card-drawing experience into a positive EV behavior with investment value.

Platform Revenue

The platform's main revenue comes from 2% of Gacha and secondary market transaction fees, as well as 2% withdrawal fees, while the main cost is the buyback of cards at 85%-90%. Driven by the anticipation of the $CARDS token airdrop, the platform performed strongly in August, with revenue nearly doubling compared to July, peaking after the token TGE. In a single week, it achieved a net profit of $2.3 million, with over 120,000 Gacha pack openings, showing a sharp growth curve.

As of now, the platform has opened nearly 1.5 million Gacha packs, with total trading volume exceeding $180 million.

Token Economics

In the $CARDS token distribution, about 16% is allocated to early investors, with an initial Launchpool release of 5%, while the team and foundation collectively hold over half. The remainder is used for liquidity and market expansion.

During the early Launchpool phase, funds raised, after deducting issuance and liquidity costs, were 100% used to purchase Pokémon cards as the platform's base inventory. The official statement also indicated that more detailed token usage will be announced in the weeks following the TGE. Currently, $CARDS does not have clear functional designs, such as payment, staking, or fee discounts.

However, considering that Collector already has strong cash flow, if it uses part of its profits to buy back $CARDS or continues to purchase rare Pokémon cards to maintain the platform's attractiveness, it could become an important price catalyst.

Currently, Collector primarily focuses on Pokémon cards, but as an already popular on-chain TCG platform, its future potential is immense. Almost all types of TCGs, including sports cards and other anime or movie IPs, can be sold on-chain just like Pokémon. Recently, the platform will collaborate with the well-known Web3 NFT project Moonbirds to launch physical collectibles and issue corresponding on-chain certificates on Collector.

This "off-chain physical + on-chain certificate" model, leveraging the inherent advantages of blockchain in transaction efficiency and authenticity verification, is likely to become a new trend in the collectibles market and will further drive the development and expansion of Collector.

Phygitals operates similarly to Collector, with the core gameplay involving purchasing card packs and opening cards of varying values. Users can choose to hold, trade on the secondary market, or resell to the platform at approximately 85% of the market price. The price range for card packs includes $25, $50, $80, $250, and $500, with different price points corresponding to varying rarity and potential value. In addition to Pokémon cards, the platform has also introduced other popular IPs like One Piece, expanding the variety of collectibles and audience base.

A major highlight for Phygitals in the future is the upcoming launch of a live pack-opening feature. Drawing on the successful experience of live token issuance on pump.fun, the platform aims to create a trend phenomenon similar to youth subculture through a "live + asset issuance" model. This highly interactive and entertaining gameplay is gradually becoming a new narrative direction, expected to bring higher user engagement and topic popularity to the platform.

Additionally, Phygitals will soon implement free custody and withdrawal services (excluding shipping costs). The platform will fully integrate with a single custody partner and has achieved price advantages compared to other platforms.

Platform Revenue

Before the TCG concept exploded in popularity, Phygitals' trading volume had been relatively modest. It wasn't until the first wave of excitement around $CARDS heated up the market that funds began to seek "track leaders," with premiums gradually penetrating the next batch of TCG platform tokens with airdrop expectations.

Currently, Phygitals has officially announced that it will conduct a token auction on Hyperliquid, with the token code $PKMN, indicating that it will rely on the HL ecosystem for issuance. Following this announcement, a large number of airdrop players flocked to the platform to open packs, pushing its weekly net revenue to exceed $1.3 million, with approximately 170,000 pack openings.

At the same time, the project has also engaged with the lending protocol HypurrFi within the HL ecosystem on X, hinting at future DeFi services such as lending and perpetual contracts centered around Pokémon cards. This not only highlights the value attributes of Pokémon cards in the on-chain RWA space but also showcases their potential integration with the DeFi world.

Data shows that the current trading volume in the on-chain TCG market is approximately $630 million, accounting for about 8% of the global TCG market size. As the market gradually recognizes the advantages of on-chain game cards and their natural fit with blockchain in terms of circulation efficiency and transaction attributes, this proportion is expected to continue to rise.

To this end, we conducted a sensitivity analysis: referencing research institutions' forecasts for the global TCG market's trading volume increase, it is expected to reach $11.6 billion by 2030. Regarding the proportion of tokenized TCG markets, based on an optimistic assessment of the track, we assume an increase of 3% and a decrease of 0.5%.

The analysis results indicate that in the most optimistic scenario, if the global TCG market and the tokenized TCG market expand simultaneously, the market share of tokenized TCGs is expected to rise to about 17% by 2030, corresponding to a trading volume of $2 billion, representing an approximate 300% increase from current levels.

1. Strong IP Empowerment

Pokémon is the most profitable entertainment IP globally, with cumulative revenue nearing $100 billion, covering the entire industry chain of games, animations, cards, movies, and merchandise. Additionally, its card segment has already formed a global collectible ecosystem, boasting a large community of players, collectors, and investors, with users having a high emotional and value recognition for scarce cards. This strong IP reduces the "education cost," as users enter the market not for blockchain but due to familiarity with the brand and emotional connection.

Moreover, Pokémon cards have long had substantial trading volumes and transparent pricing on platforms like eBay, TCGPlayer, and Heritage Auction. This mature price anchoring mechanism, combined with on-chain tokenization, allows NFT/tokenized cards to inherit the value consensus of the real market directly. The foundation of user trust does not stem from Web3 technology but from the existing mature market offline.

Pokémon serves as an entry case, proving the feasibility of transitioning traditional collectibles to on-chain assets. In the future, this can quickly expand to:

• Sports cards (the new generation after NBA Top Shot)
• Other anime/manga IPs (such as One Piece, Naruto cards, etc.)
• Movie/game derivative IPs (Star Wars, Marvel, Nintendo)

These markets also have active trading and collecting cultures, with user groups highly intersecting with Web3.

Equally important is its cultural penetration and network effects. Strong IPs inherently possess "cross-cultural communication" capabilities, enabling them to break into mainstream player and collector circles beyond the niche of purely crypto users. The secondary dissemination effects of the IP itself (social media topics, celebrity collections, news reports) can further bring sustained user growth and capital attention. Therefore, IP is the most critical lever for the on-chain TCG market to break through existing boundaries.

2. New Narratives and Compatibility After Asset Tokenization

On-chain NFTs correspond one-to-one with physical cards, and the information is transparent and verifiable, addressing common issues of authenticity and trust gaps in traditional markets. Users can not only confirm the source of the cards but also track complete transaction and custody records.

Additionally, in terms of liquidity and immediacy, mainstream platforms offer 85%-90% guaranteed buyback + instant settlement, allowing users to quickly realize their assets. In contrast, traditional platforms like eBay require a settlement period of 7-14 days and face issues of transaction opacity and difficulty in arbitration. The on-chain mechanism significantly enhances transaction efficiency.

On-chain TCGs also have cost and price advantages. Traditional platforms like eBay typically charge transaction fees exceeding 14%, while on-chain platforms like Collector_Crypt and Courtyard have lower transaction costs and clearer structures. Furthermore, with each resale, the original cardholder can still earn through the on-chain royalty mechanism. This means:

• Users pay lower fees.
• Original holders can share in the trading value over the long term.

As users gradually become aware of this price advantage and value return mechanism, ordinary TCG traders are likely to shift their habits from traditional platforms to on-chain ones.

3. New Financial Play

Based on high-value cards, developers are exploring using NFTs as collateral, leading to the emergence of lending, perpetual contracts, staking, and other DeFi services, gradually forming what is referred to as "Collectibles-Fi." This not only introduces a new financial narrative to the collectibles market but also allows cards, originally limited to collecting and trading, to gradually evolve into RWA with financial asset attributes.

Moreover, the advantage of Web3 lies in its efficient value transfer mechanism. By issuing tokens related to card releases, investment opportunities can be further expanded, making TCG-related tokens Beta assets in this track, providing investors with new participation paths beyond physical cards and NFTs.

The integration of TCG and DeFi is not a new concept. Early Web3 already saw the emergence of NFT lending tracks, such as Blur Lending, which had a peak TVL exceeding $100 million, and Gondi, which reached approximately $60 million. At that time, blue-chip NFTs like CryptoPunks and BAYC indeed supported a considerable lending market. However, its fatal flaw lies in the instability of the underlying asset value; once NFT prices plummet, the entire lending market can collapse rapidly.

TCGs also face systemic risks, but compared to pure NFTs, physical assets like Pokémon cards have a more solid foundation:

• Nearly 30 years of history and ecology, with a relatively mature market price formation mechanism.
• Long-term cultural influence and emotional value, with users often growing up alongside their assets, leading to stronger asset recognition.

Therefore, the stability of TCG's underlying assets and cultural stickiness may provide a more solid support for DeFi integration than blue-chip NFTs, and we hope the TCG market can develop into an ecosystem similar to the former NFTfi track and continue to thrive.

It is essential to pay special attention to the sustainability of card supply. Taking Pokémon TCG as an example, some series of card packs have been hotly traded in the secondary market due to long-term supply shortages. For on-chain TCG platforms, ensuring a continuous and stable supply will be a long-term challenge. For instance, Collector_Crypt's Legendary Gacha series has already shown signs of insufficient supply; if it cannot be replenished in time, it will significantly weaken user stickiness and consumption habits, making this issue worthy of ongoing attention.

The rise of on-chain TCGs has validated the logic that collectibles on-chain = tradable + financializable. Pokémon is the beginning of this trend, but not the end.

From a market size perspective, the volume of sports cards is nearly double that of Pokémon and carries a global fan economy and investment attributes; at the same time, other classic IPs like One Piece and Yu-Gi-Oh! also have large collector communities and mature secondary markets.

As these IPs gradually enter the Web3 world, the market space for Exotic RWA will be further expanded, forming a diverse ecosystem covering sports, anime, and entertainment culture. This not only has the potential to push the on-chain collectibles market beyond existing boundaries but may also become a new engine connecting fan economies and decentralized finance.

About Gate Ventures

Gate Ventures is the venture capital arm of Gate, focusing on investments in decentralized infrastructure, ecosystems, and applications that will reshape the world in the Web 3.0 era. Gate Ventures collaborates with global industry leaders to empower teams and startups with innovative thinking and capabilities to redefine the interaction patterns of society and finance. Website | Twitter | Medium | LinkedIn

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References:

https://www.gamedeveloper.com/business/pok-mon-series-has-sold-480-million-units-made-52-9-billion-cards?utm_source=chatgpt.com

https://www.zionmarketresearch.com/report/trading-card-game-market

https://www.vice.com/en/article/pokemon-has-become-the-highest-grossing-media-franchise-of-all-time/?utm_source=chatgpt.com

https://dune.com/zkayape/pokemontcgsol

https://dune.com/socialgraphventures/ripfun-kpis

https://dune.com/hashed_official/xstocks-metrics

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Original: “How On-Chain TCG Could Unlock the Next $2 Billion Market: Landscape Overview and Valuation Outlook”

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