The literal translation of GameFi is gamified finance, which is essentially a comprehensive concept of Game+NFT+DeFinance, which refers to the use of games to present the value of decentralized finance and NFT through the distributed structure of the blockchain. In other words, it is to present decentralized financial products in the form of games, then gamify the rules of DeFi, and transform props into NFTs.
Decentralized finance is relative to traditional finance. It refers to applications in various financial fields built on an open decentralized network. Simply put, it is blockchain technology plus traditional finance. Its goal is to build a multi-layered financial system, based on blockchain technology and cryptocurrency, to recreate and improve an existing financial system.
The outbreak of any field has its deep-seated reasons, such as the influence of the general environment, the example of industry leaders or the investment of capital, etc. The development of the GameFi field is the same.
The rapid popularity of GameFi in 2021 can be roughly summarized into the following reasons.
1. The Rise and Spread of the Metaverse Concept
2021 is known as the first year of the Metaverse. The term Metaverse comes from writer Neil Stephenson’s science fiction novel “Avalanche”, which describes a real human being living in a virtual space together with a virtual human through a VR device. future settings.
The current consensus definition of the metaverse is that it is a virtual space that is parallel to the real world and independent of the real world. This space is an extension of the dimension of human existence. Ultimately, we will be affected by these activities in the virtual world in our life in the real world. Influence.
When talking about the Metaverse, GameFi is often mentioned. This is due to the distributed structure of blockchain technology. Through the distributed structure and blockchain technology to confirm the rights of assets, it can be well connected to the real world. Make a mutual mapping with the virtual world.
At present, GameFi is a hard facility for the financial system, bank lending system, and value storage system, and it is quite mature. Therefore, the two concepts of Metaverse and GameFi have the effect of promoting and influencing each other.
2. The rapid development of related industries caused by the global epidemic
The epidemic has caused great changes in people’s production and life in the past two years, including the way of entertainment. When we work, meet, shop or play in a non-contact virtual environment, we find that this is actually a more convenient and efficient way.
Under the epidemic, some resource-exporting countries in Southeast Asia have encountered an economic crisis. To solve the economic crisis, it is necessary to seek new economic growth points in addition to resource exports. The economic system mapped by GameFi just provides such a possibility, so that ordinary people can In the reality of high consumption and low income, earning a certain amount of income through the virtual world, the spread of the popular chain game Axie Infinity in the Philippines and other Southeast Asian countries has become a very powerful booster for the development of GameFi.
3. Economic benefits of Play-to-Earn
The core of the GameFi field is an economic model like Play-to-Earn, which we call earning while playing. It is different from the Free-to-Play model in the traditional game industry. Chain game players can earn real money through encrypted assets. Players who participate in virtual economy construction and games can earn rewards through their own participation behaviors. In the market Sell and get a profit.
In this case, the development team of Chain Games has changed from the service role of the traditional game development team to a company-like architect, and the player has changed from the player who pays to play the game to a person who contributes to the development and expansion of the company. The transformation of the identities of both parties has transformed the original player’s behavior of spending money to play games into a behavior similar to working and making money. They can claim rewards from the market through games, which is the most meaningful point for current blockchain players. .
4. The positive role played by the game guild
The influence of game guilds in the field of GameFi should not be underestimated. Guilds are the best link between project parties and players. On the one hand, game guilds guide members to benefit by mining high-quality GameFi games. On the other hand, community governance also depends on guilds. Coordination, the most important thing is that the game guild is the gathering place of players’ initial capital, which can exert greater influence on the game market through unified layout and overall planning.
NFT is a non-fungible token, which is a proof of property rights with scarcity, uniqueness, indivisibility, immutability and verifiability.
FT is a homogeneous token Fungible Token, which refers to a token that can be replaced and split. For example, there is essentially no difference between the bitcoins in A’s hand and the bitcoins in B’s hands. One $100 bill in A’s hand is equivalent to two $50 bills in B’s hand. Equivalent to 100 US$1 bills in C’s hand, this kind of interchangeable and splittable is a homogenized token.
Non-fungible tokens are NFTs, which are the only indivisible tokens. For example, it is equivalent to a numbered renminbi. There will not be two renminbi with the same number in the world, nor can a special numbered renminbi be split into several parts or exchanged for equivalent small renminbi. It is a non-homogeneous token.
Compared with the homogenized token, the key innovation of NFT is that it provides a method of marking the ownership of native digital assets, and this ownership exists outside the centralized service and is not subject to any centralized organization. control, so NFT can well solve the problem of asset ownership verification.
Based on the properties of NFT, it may be widely used in the following scenarios in the future.
The first is the field of intellectual property. NFT can be a painting, a song, a video or a photo. In this field, NFT plays the role of a patent office, helping to register the copyright of each unique thing. , to help it identify patents.
The second is physical assets, such as property rights certificates for real assets such as houses and real estate, which can also be presented in the form of NFTs.
The third is records and identity certificates. Because NFTs are unique, they can also be used to verify identity and birth certificates, driver’s licenses, academic certificates, etc., which can be securely stored in digital form to prevent abuse or tampering.
The fourth is financial bills. All kinds of financial bills actually carry a lot of information in the process of circulation and transaction. If combined with NFT, it can not only confirm the rights but also facilitate tracking. In addition, in the future, various types of NFT asset transactions themselves can form a subdivided financial market.
The last one is ticketing. For example, concerts, movie tickets, drama tickets, etc. can be marked with NFT. Although these tickets seem to look the same, in fact, each ticket has a different seat number. Naturally, NFT can also be used here. field is applied.
At present, the application fields of NFTs in the market are relatively single, mainly concentrated in relatively small circles such as games, encrypted artworks, and game props of chain games.
The above picture is the current data of the top 10 NFT trading markets. It can be seen that the number one NFT trading market is OpenSea, the world’s largest NFT trading market, with 1.38 million traders, a transaction volume of 14.6 billion US dollars, and an average transaction price of 939 US dollars.
The second is the popular global chain game Axie Infinity, which has 1.62 million traders and a transaction volume of 3.9 billion US dollars. In third place is the cypherpunk pixel avatar CryptoPunks, which has an average price of $120,000.
Although from a global perspective, the number of players in the entire NFT is in the millions, but from the perspective of transaction volume, we can see such a trend in the popularity of the entire market.
There are nearly 3 billion game players in the world and a market size of 175.8 billion US dollars. Among them, 400 million players participated in the transaction of game account equipment, and the market size of game asset transactions also reached 38.8 billion US dollars.
However, there are problems in the traditional trading of game props. Hayek, a famous economist, said that protecting private property as much as possible is definitely the most important and necessary condition for the continuation of human society. So, what problems exist in the current asset trading market?
The operation of the entire trading market is still centralized, and there is a problem with asset ownership. The player has no way to actually obtain the ownership of the game props and assets that he spent money on. He can only use it in the game, but there is no way Ownership of real assets; game developers can arbitrarily modify the property values of game assets, and the interests of players cannot be guaranteed; after the player’s account is stolen or blocked, or the game is stopped, the game assets he purchased will be impossible. Verify.
On the left side of the picture are some cases of legal lawsuits about game asset ownership. Even if there is a trading platform, including some game asset trading platforms such as Steam Market or the domestic NetEase’s Zangbaoge, game asset trading is still restricted.
The restrictions are mainly reflected in three aspects. The first is that the scope of the transaction is very small; the second is that players in different countries face the problem of inconsistent currency and difficult payment and settlement; the third is the high credit cost of centralized game asset transactions , the risk is high. Because it is a centralized operation mechanism, there is no way for everyone to completely trust this centralized system. If the centralized credit collapses, the interests of all players will be damaged.
The scale of NFT transactions is increasing year by year
From the data of State of the DApps, as of December 2021, there are already 665 chain game DApps circulating in the market. From the overall data from 2017 to 2021, the number of chain games shows a relatively stable growth trend. In addition, the data of DApps radar also shows that the number of transaction wallets and transactions of chain games in 2021 will show an upward trend in fluctuations.
Therefore, I believe that this will be an outlet in the future, and I hope that together with traditional high-quality game developers, we can ride the wind and waves to create greater value under the new outlet.
Domestic game developers may have paid attention to the NFT and chain games track before, but due to the lack of technical accumulation in the new field and the difficulties in market operations, there is no way to develop the entire NFT or chain games.
We hope to help more traditional CPs to take their first steps in new fields through the product solutions provided and the media promotion cooperation in operation. Products can truly be promoted in global markets including Southeast Asia.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/in-depth-analysis-of-the-relationship-between-gamefi-and-traditional-games-insight-into-2022-game-trends/
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