GameFi Although Game is ahead, Finance is the main reason for its rapid development.
GameFi is still in its infancy and far from the playability of traditional games, but it is favored because it can help players improve profitability.
Players’ profits in the game mainly come from NFT transactions, as well as mining and trading of game tokens. Therefore, it is particularly important for players to understand the economic model of tokens.
Token’s economic model
The purpose of players in GameFi is to maximize benefits, and the mode of tokens in the game will affect the behavior of players. It can be said that tokens link games, NFTs and financial properties. A sustainable, fair and attractive token model will have a major impact on the success or failure of the game.
At present, the token mode in the game is mainly divided into single currency and multi-currency.
The single-currency economic model uses one token to handle all platform-related transactions, such as in-game activities, platform governance, and transactions in the secondary market.
The advantage is that the economic model is simple, players only need to obtain one token to experience the game, and the income obtained is also the same token. It facilitates player transactions and reduces the difficulty of resource integration.
However, the disadvantage is also obvious. Since the tokens consumed in the game are also assets that players want to hold value-added, the player’s willingness to hold conflicts with the setting in the game that they have to consume tokens to continue to advance.
Players can easily affect their operations in the game due to fluctuations in currency prices. When the currency price is too low, players will shake the profitability of the game and lose interest in continuing the game; when the currency price is high, continuing the game will consume high-value tokens and lose the player’s assets.
In addition, if the platform adopts the model of continuously issuing tokens, it will cause inflation. Since the single-currency model can easily affect the token’s own ecology, more game projects are more willing to adopt a multi-currency economic model.
Games in multi-currency mode generally distinguish between platform governance tokens and tokens circulating in the game.
- The platform governance token is mainly used to encourage players to contribute to community governance so as to improve players’ recognition of the value of the platform.
- The tokens used in the game are mainly used for mining, trading, daily tasks, and upgrades in the game. Usually, the maximum issuance volume is not set, and some do not even need to become virtual currencies on the chain, and will not be traded in the secondary market.
The multi-currency mode has various forms according to different game settings, and it also has obvious advantages and disadvantages compared to the single-currency economic mode.
The advantages are mainly reflected in the ability to stabilize the economic system in the game. The multi-currency mode allows players to not be affected by the price changes of the main token in the secondary market in the game. The separation from the token traded in the game also allows the game party to adjust the economic model of different tokens more flexibly.
The disadvantage of the multi-currency mode is that it increases the difficulty of integration of the game party, and also increases the learning cost for players.
Dimensions of the economic system to focus on
After knowing the form of the token in the game, it is more important to pay attention to how the economic system in the platform works. The token can be evaluated from the following perspectives:
Issuance and destruction mechanism
Reasonable and limited issuance can prevent token inflation, and an unlimited economic model may cause token devaluation, making players lose confidence in long-term holding.
The destruction mechanism also plays an important role in preventing inflation, and an active destruction mechanism helps to stabilize the currency price. For example, on February 4, Axie Infinity announced that it would no longer issue SLP token rewards in daily missions and adventure modes, and added more SLP destruction mechanisms (including decorating skins, upgrading and breeding Axie, adding emoji and renaming, etc.) . The launch of this mechanism has caused the SLP price, which has been declining all the way, to rebound.
Footprint Analytics – Axie Infinity Token Price
The team’s plan for token distribution is also worthy of attention, and a distribution mechanism with more weight in the community can gain more preference from players.
Broader usability has greater appeal to players. Most of the game’s tokens have functions such as daily tasks, upgrades, purchases, and battles in the game, and some can also obtain additional NFT or token rewards by staking tokens. Use cases that extend outside the game will add more empowerment to the token, such as transactions in the secondary market, integration in other platforms to obtain benefits, etc.
Setting the unlock time after obtaining the token is beneficial to prevent speculative users from affecting the currency price, and can also retain more users. At the same time, keeping the project team and the player on the same lock-in period also helps to align the interests of the two.
Gaming Token’s data performance
According to Footprint Analytics data, the top 5 GameFi token projects by market capitalization are Decentraland, Axie Infinity, The Sandbox, DeFi Kingdoms and Illuvium. Among them, there is nearly 10 times the fault gap with the top three since the fourth.
Footprint Analytics – GameFi Token by MC
The old GameFi game Axie Infinity is still in the top three, but the first position has been shaken. With the soaring discussion of the Metaverse in all walks of life, Decentraland and The Sandbox with the concept of the Metaverse skyrocketed in October, and by the end of February, the gap between the top three and the top three was only a tiny fraction.
Footprint Analytics – Top 5 Market Cap in Gaming
A good user experience and playability are also crucial, and this is reflected in Illuvium. Although it has not been officially launched, players are shocked only by the announced game display trailer. The exquisite graphics and rich game characters are a dimensionality reduction blow for the now generally rough GameFi projects.
Although the platform suffered losses due to attacks and contract loopholes in December, Illuvium still ranked in the top 5. It can be seen that the current players still have a great desire for game quality.
DeFi Kingdoms is different from other top 5 platforms, its main core is DeFi, and the game attributes are just the icing on the cake. This game-like investment experience made DeFi Kingdoms’ token JEWEL rise to the fourth place in market value after its launch.
As more and more funds enter the GameFi field, there is no shortage of GameFi projects now, but projects that are excellent in terms of game quality and token economic system.
Compared with mature traditional games, games in the encrypted world are still in the “child” stage. But its financial attributes and high community participation allow it to open up a new blue ocean in the red ocean of the game field.
The game party improves the in-game economic system through gaming tokens, which is as important as improving the game experience. Whether it is for P2E or users who simply hold coins to increase, it is also a required course to have a sufficient understanding of gaming tokens before entering.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-you-must-know-about-holding-gaming-tokens/
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