NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

On August 3, a news report titled “”Spiritual Opium” Has Grown into Hundreds of Billion Industries” called online games a new type of “drug” or “mental opium”, and it quickly swept the screen, and there was a lot of heated debate. Although the Economic Information Daily immediately deleted the original text, but affected by the news, the game stocks fell sharply that day. Tencent fell more than 10%, NetEase fell more than 15%, and China Mobile Games and Xindong fell more than 20%. Outsiders wonder whether this news report is a potential “weathervane” instructed by the regulator to be a prelude to the rectification of China’s Internet game industry.

Games and social interactions have always been called the two most important “ballast stones” of the Internet, and they are also the “catalysts” that promote the continuous evolution and iteration of the Internet business. In Web1.0, web pages are mostly static, unable to form multi-layered content interaction, and the strong demand for games and social interaction has stimulated the advent of Web2.0, shifting to emphasis on interoperability and participatory culture. Games and social interactions stimulate users to use the Internet extensively and profit from it. According to the “Market Operation Pattern and Prospect Strategy Analysis Report of China’s E-sports Game Industry from 2021-2027” released by Zhiyan Consulting, in the past ten years, the annual registration growth rate of Chinese game-related companies has fluctuated and increased, and games have become the Internet. Half of the country.

From physical games to online games to electronic mobile games, games have always reflected people’s needs for a deeper spiritual culture. With the advent of the Web3.0 era, the on-chain game sector has begun to exert its strength. The blockchain has extended the game ecology and presentation form more, and redefines the relationship between users and the game platform and the distribution of benefits. Consumers can also be creators. In 2017, the crypto cat turned out, and by this year the NBA Top Shot became popular. In the first half of 2021, the overall NFT transaction exceeded US$2.5 billion. After June, Axie Infinity’s daily income exceeded 8 million U.S. dollars, and it has surpassed the traditional Internet mobile game giant King Glory. Different from the dominant game model of the Internet’s flat platform, the new NFT game based on the blockchain has created a more self-consistent, fair and shared economic system for the game world. The dual drive of encrypted games and NFT brings A huge market with exponential growth.

Xiao Feng, chairman and CEO of Wanxiang Blockchain, once mentioned that the development of the Internet is a process of “digital twins-digital natives-virtual and real” , and the whole process will include the most comprehensive game platform with virtual and real interaction, and reverse the promotion of NFT. Growing.

NFT development trend in the first half of 2021

The Internet era has brought about the richness of network resources, allowing us to see a large number of text, pictures, sounds, videos, and games. These things constitute the so-called media. The media can make us feel an unprecedented experience and make us seem to be living. In the digital age, in the digital space.

From fragmented time to fragmented value, the biggest change between Web3.0 and blockchain is to turn visualized images of the Internet into assets after confirmation, and automatically capture value. These are mainly reflected in the NFT, even ours A casual graffiti, a Weibo or Moments shared casually, or daily essay notes can all be turned into NFTs, generating unique scarcity value. The Internet provides the “information doll”, NFT makes the page without any changes a carrier that can transmit value, and users truly enjoy the unique digital ownership of Web3.0.

In the first half of this year, taking advantage of the DeFi wave, the NFT market began to exert strength, and the overall transaction size exceeded US$2.5 billion.

NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

Data source: NonFungible data

Judging from the past six months, the most popular type of NFT is the type of encrypted collectibles. Among them, a digital image in the form of NFT was sold at Christie’s auction house for a record price of US$69.3 million. Subsequently, the overall NFT transaction volume reached its peak in May , and the Top Shot platform of the NBA in the United States also began to support fans to purchase and trade game video highlights in the form of NFT.

NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

Data source: NonFungible data

NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

Data source: NonFungible data

Among them, I have to mention that the Axie Infinity game, which became popular as soon as it was launched, quickly attracted a large number of fans with its Play-to-earn gameplay, setting a record of the highest daily income of over 14 million U.S. dollars. If you maintain this magnitude , You can reach the level of the world’s top game.

NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

Data source: Token Terminal

Crypto games are a catalyst for the development of NFT

The success of Axie and the skyrocketing volume of NFT transactions have allowed us to see more possibilities for crypto games. The development of encrypted games in 2021 has many comprehensive factors. Among them, it is very important to benefit from two aspects. One is the combination of Play-to-earn, NFT and the guild; the other is the expansion of Ethereum (such as Layer2 or side chain, etc.).

1. Play-to-earn mode and game guild

With the evolution and development of the software and Internet industries, games have undergone an iterative business model, from selling game software, to paid games, to free-to-play games. Now that it has entered the stage of encrypted games, it is a play-to-earn model, that is, you can earn money by playing games. Axie’s successful exploration on Play-to-earn has brought a lot of enlightenment to encrypted games. It is mainly developed in the Philippines and Venezuela. By playing Axie, the local people can earn hundreds of dollars a month.

2. Scalability provides the foundation for the explosion of encrypted games

The number of Aixie Infinity users was less than 40,000 DAU at the end of April. After the introduction of the sidechain Ronin, the number of daily active users soared to more than 250,000. The side chain Ronin can increase the speed of transaction confirmation and greatly reduce gas costs. Users can also transfer assets such as Axie from the side chain to Ethereum Layer 1 to meet higher security requirements.

NFT and crypto games break the circle: what great changes have taken place to promote the emergence of virtual and reality

Source: Delphi Digital

In-depth report: What are the reasons behind the substantial improvement in the fundamentals of the popular chain game Axie?

In order to solve the scalability problem of encrypted games and NFTs, Layer 2 solutions dedicated to NFTs, such as immutable X’s Layer 2 technology, were even born. The current illuvium game plans to adopt immutable X’s Layer 2 technology, which is a solution developed based on StarkWare. The security of current sidechains, such as Matic, Ronin, and xDai, depends on the situation of their respective sidechains. There is a big gap with the security of Ethereum Layer 1. On the sidechains, transaction speed and fees have been greatly improved. ,

3. Axie promotes the new development of the NFT market

At present, Axie’s breakthrough will have the following effects on the NFT market:

Due to the market hotspot effect, at least in the short term there will be funds to promote the development of the encrypted game market, and more institutions will be willing to try to invest in the field of encrypted games, which will attract more game developers to join. There will also be more and more well-made chain games entering the crypto market. For example, My DeFi Pet, MIST NFT, Decentraland, etc.

Axie’s cold start method will also be emulated by more and more communities, and Axie will not be the last crypto game to achieve a breakthrough. Game guilds will play an increasingly important role in the cold start of encrypted games in the future.

If the encryption game market can achieve sustainability as a whole, including the increase in the number of users and the increase in protocol fees, etc. Then, it has the opportunity to bring support to the warming of the crypto market, but if it focuses on hype, it will only accelerate the cooling of the market.

Axie’s breakthrough will expand the NFT market from an encrypted collectibles market to an encrypted game-based market, bringing greater wealth effects : game asset confirmation, new game methods, new game community systems, and so on. The user group in this market is wider, which is conducive to promoting the cross-circle popularization of NFT.

NFT development is unstoppable

The emergence of NFT essentially reduces the verification threshold before the transaction, so that the cost of trust in the transaction is reduced to a very low level, so that the value liquidity of the transaction is fully released while the scarcity of its value is guaranteed. The current NFT market is still in its early stages, and it is mainly a market supported by collection psychology, aesthetic psychology, and speculation psychology. However, from the rise and advancement of encrypted art platforms, the asset mapping of traditional giants to the breaking of the circle of native encrypted games, it is evident that NFT is constantly making innovations and breakthroughs, and its development is unstoppable.

In the future, it is expected that platform teams with technical advantages, IP enabling advantages, and operational capabilities will gradually enter the game.

1. Technical advantages

This of course is reflected in better NFT presentation forms and transaction circulation, such as faster, smarter, and more convenient NFT creation platforms, sales platforms, aggregation platforms, quotation platforms and even storage platforms, online exhibition platforms, and so on. At present, the creation and trading of NFTs still have a high technical and cognitive threshold. In addition, the opportunity for technology lies in more expressive NFT works. Today’s NFTs are mostly collections, artworks, and game expressions. The expressiveness of the product itself is still relatively primitive. With the development of VR/AR technology in the future, more and more expressive NFT works will appear.

2. IP empowerment advantages

World-renowned brands such as Disney and Lamborghini have begun to intervene in the NFT market, and more and more brands will join the track in the future. This kind of brands with traditional well-known IP advantages is a good starting point to enter the NFT field, but it does not mean that they will definitely be able to gain in the NFT field. Because the largest IP in the future of NFT is very likely to be generated in the virtual world meta-universe, not in the traditional IP field. Therefore, in this regard, the market will pay attention to games with good user experience and project opportunities in the meta-universe field, such as Bored Ape Yacht Club, a virtual plot of Decentraland that has been sold for more than 900,000 US dollars, etc., these are native to the blockchain field. NFT opportunities are equally exciting.

3. A platform with operational capabilities

For example, the reason why the aforementioned Bored Ape Yacht Club has emerged is because the project team has captured the user’s psychology. The low price has room for imagination and is easy to be hyped. Bored Ape Yacht Club priced all the initial 10,000 apes NFTs at 0.08 ETH. These apes sold out in less than two hours, with a total income of 800 ETH, or about 2.8 million U.S. dollars.

In addition to the speculative effect of wealth at low prices, platforms with good operational capabilities can continue to develop their own ecological network. However, most of the current NFT platforms are limited to publishing works, hyping, forming consensus, and realizing. There are still many bubbles in the NFT development momentum in the first half of 2021. The reasons for the bubbles include excessive speculation and excessive financialization, irrational pursuit, and short-term market operation goals. Therefore, platforms such as Axie with long-term operational capabilities are not limited to game play, but develop toward the game public chain to form a complete encrypted game ecosystem.

Cao Yin, chairman of the Digital Renaissance Foundation, once said in an interview with 21st Century Financial Report: “NFT may account for 5%-10% of the total market value of encrypted assets in the future.” This is a conservative estimate; activists believe that the market value of NFT will eventually Will exceed the market value of FT. However, judging from the current situation, even less than 0.5%, there is still huge room for growth in the future.

The author believes that NFT is not limited to art collections, encrypted games and other fields. The cultural value behind NFT can also be used to do greater things. For example, protecting the world’s cultural heritage, protecting the environment, encouraging public donations, and even using NFT to store important references to human civilization, gene banks of endangered species, and exploring the universe. Some public issues have attracted attention through NFT transactions, and NFT royalties can also be used to fund these public undertakings. For example, NFTmart combines the facial makeup in Peking opera with NFT, and launches the Chinese Opera Mask Plus series NFT with Chinese characteristics, which inherits Peking opera culture through NFT. Therefore, in the Web3.0 era, NFT will break the circle through games and promote the development of the Internet to the form of “virtual and real”. It is expected that virtual assets will be combined with physical assets to truly reflect the meaning of the Internet of Everything.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/nft-and-crypto-games-break-the-circle-what-great-changes-have-taken-place-to-promote-the-emergence-of-virtual-and-reality/
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