Playing games is either liver or krypton in the public's concept, or you get money, and generating income while playing games sounds like utopia to most of us. However, thanks to the Play-to-Earn movement, this situation is not far from reality. Since May 2021, blockchain-based games have achieved great success. The number of accounts or wallets connected to blockchain games reached 754,000. Gaming-related unique active wallets grew by 25% compared to Q2 and an impressive 509% year-over-year.
Blockchain Based Games
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Blockchain Based Games
Blockchain is one of the most disruptive technologies created in the past few decades. By constructing a credit network and its traceability and encryption features, it enables individuals to conduct transactions safely between peers, and at the same time proves the ownership of related assets. If applied correctly, this technology is likely to be combined with any industry and change the original solidified model of any industry, and games are no exception.
Blockchain-based games are seeding a new micro-economy where gamers around the world can create monetary value by doing what they love. Blockchain will transform into a decentralized Web 3 type. Here, players go from consumers to true owners, who not only determine the future of the game's story, but also have full control over their in-game items, not just the individual games themselves.
Simply put, by releasing non-fungible tokens — NFTs. An NFT is a tokenized representation of a digital asset that essentially transfers its ownership to the wallet that holds it. Ownership is recorded on an immutable, accessible, distributed and decentralized ledger called a blockchain.
This is the main difference from traditional games. Blockchain game NFT includes in-game virtual land, in-game items, and game-related collectibles. For example, blockchain games like Decentraland or The Sandbox have virtual lands to build on, NFTs for battles and other types of activities, and virtual pets.
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A new way of NFTfi
A large number of players are vying for a position in the emerging market. Major platforms include Strip Finance, Banksea Finance, Drops DAO, Unbanked, all of which offer some form of NFT-backed lending services as users seek liquidity while holding assets.
Now, the NFT market has entered a new phase by matching lenders and borrowers on a peer-to-peer platform. The mechanism of NFTfi is actually very simple. Just like the previous lending market, the platform matches borrowers and lenders without direction, and does not underwrite loans by itself. The platform makes money on all the interest earned by the lenders. Borrowers list their NFTs on the site, and lenders can then make an offer to lend the tokens. The principal, term and annual interest rate are subject to negotiation.
Unlike the multi-year terms of traditional lending markets, lending in the NFT-backed space is hyper-accelerated. Periods are usually 7, 30 or 90 days. The indicators of the NFTfi business model are more similar to pawn shops or subprime loan businesses than to banks. It sounded crazy a year ago, but we are entering a world where loans secured by NFTs are routine.
Digital identities will help governance link voting power to users rather than tokens and help in the development of DeFi credit scoring. In addition, NFTs representing identities will also simplify the onboarding process for users, especially on financial platforms. This may bring additional benefits to the airdrop. Most current protocols distribute tokens to wallets, but they don't know how many tokens the same user owns. If the UID is associated with a personal identity, the protocol can only airdrop to NFT holders, making the system fairer. Perhaps NTFfi is the next industry hotspot is also a possibility.
