Gaming nfts are here the term gamefi is taking the space by storm. Over the last year a lot of new gaming focused projects have been launched. This new sector of utility for ntfs is an interesting concept as web 3 continues to grow. One of the biggest issues with Legacy gaming from Skins to end game tokens and currencies is that ultimately the studio and Publishers own the rights to everything. If a game gets abandoned or shuts down all of the Investments that were made are lost. The blockchain provides an interesting new way to allow these types of projects to live on.
What is GameFI?
For all intents and purposes this new category is the combination of Gaming and finance or ownership. Defy has been around for a few years and many tokens have been launched exploring new and unique ways to create well 3 yield staking and more but the rapid growth of in Estes has created a brand new category to explore. As digital ownership becomes more prevalent and relevant in the space we suspect that more and more studios are going to explore how the ideas of transferred ownership from Studios to collectors will change and evolve.
While the category is still relatively immature, the idea that I can own my character or my skin or even parts of the economy is revolutionary for this new asset class. Let’s start with ownership, owning an nft is really just proof of record on a blockchain that you own the contract and the corresponding image associated with it. The ability to own your skin in a game or even own your character provides a unique way to allow collectors 2 prove that they own the in-game assets. This provides two things: first it allows The Collector through proof of ownership to show if an item is scarce or not. For example end the popular game fortnite epic games May release a set of skins for a. Of time and imply scarcity. There is nothing stopping big games from re-releasing that skin at a future date for a future season. We have already seen many examples of Epic doing this and when that happens the scarcity around that item diminishes. Additionally ownership of that character or skin provides additional interesting utility and that hypothetically you could use that character or skin or item in other games or even the metaverse. To put it simply as long as there is a set of Standards around these characters and skins if epic games were too so choose to allow nft used to be used in fortnite for example, collectors could use their individual Bored Apes, Clone X, or any other 3D avatars that they own.
While the future is bright for gaming nfts most of the Innovation is being done by defy startups and not major Studios. The general public is still reluctant to embrace digital ownership and web 3 ends the pushback from many journalists and Gamers around the idea of nfts remains strong. We believe that the outcome of web3 gaming is inevitable once people understand that they can own the assets that they’re spending their hard-earned money on. Eventually enough momentum will break through and in the future this will be the norm.
Many web 3 games are using these non-fungible tokens in lieu of seed rounds or external investment. but they are also introducing unique mechanisms that allow collectors to make money on they’re bats. The concept play-and- earn has gained popularity over the last year where collectors earn in-game currency that is based on its own token and players can extract those tokens in the form of erc20 tokens and sell them on exchanges. There are pros and cons to this mechanism and we have seen examples including Axie Infinity running into turbulence as the market matures and exploits are found. Another popular mechanism that is used buy games like crypto Raiders is the Dual currency component essentially there is a governance token as well as an in-game token and staking your governance tokens allows you to earn in-game currency that you can then use to play the game or sell to others that may want to short cut their gaming experience.