What are the core elements of GameFi?

GameFi= Game + DeFi, that is, a blockchain game with decentralized financial properties, contains NFTs and token mechanisms, and can also be understood as the gamification of DeFi.

nGameFi solves most of the pain points of NFT without scenes and unmatched value to some extent, and attracts a large number of players with the Play-to-Earn model.

Since the second half of 2021, the heat has grown rapidly.

According to Token Terminal, from January 20, 2021 to January 20, 2022, in the blockchain project contract revenue ranking, chain game Axie Infinity ranked third with a revenue of $1.27 billion, behind Ethereum and Filecoin, surpassing OpenSea.

According to Blockchainamer statistics, as of December 10, 2021, the cumulative investment amount of the GameFi track reached 5.4 billion US dollars, of which 4 billion US dollars in 2021, in addition to blockchain funds, SoftBank, Sequoia and other traditional investment institutions are also listed.

GameFi is so hot, what is its core element?

Core elements of GameFi:

Blockchain: Blockchain's distributed data storage technology is GameFi's infrastructure that provides players with verifiable ownership of assets and ensures that assets can be traded both inside and outside the game.

At present, the mainstream public chains used by GameFi include ETH, Polygon and BSC, among which Ethereum has an absolute advantage in the number of GameFi, while Hive, BSC and WAX are more dominant in the number of users.

According to Footprint Analytics, as of December 21, 2021, the total number of Gamefis was 1216, of which 501 were running on Ethereum, accounting for 41. Users on Hive, BSC and WAX accounted for 33, 10 and 15, respectively.

nToken: GameFi's token system, which is a micro-economic unit in the game. A good token economy is an essential foundation for a game's success. The token system is divided into a single token system and a multi-token system:

Single-pass system:In-game tokens and secondary markets use the same token, players buy tokens to enter the game, and the rewards obtained in the game are also this kind of token;

Multi-token system: Different types of tokens are set up in the game, usually divided into in-game tokens and governance tokens. In-game tokens are rewards for players' basic behavior, such as daily tasks, PvE duels, etc., while governance tokens are usually used to motivate players to complete complex tasks in the game, such as PvP duels.

nNFT: A non-homogeneous token is an encrypted digital proof of stake recorded on the blockchain that cannot be copied, tampered with, or split. In the context of GameFi, NFTs are the equipment, skins, etc. obtained through upgrading monster fighting in the game.

However, unlike traditional games, players have the right to use, earn and transfer NFTs. Only with these three rights can the player's private property rights be protected.

In traditional games, players only have the right to use equipment, while the right to earn and transfer rights are greatly restricted, and the transaction of equipment, characters and so on is in a gray area.

nDeFi: That is, the decentralized financial ecology on the blockchain, assets can realize the most basic lending, mortgage, and transaction functions of various advanced financial derivatives of traditional financial institutions on the chain. Different from traditional finance, DeFi does not rely on any intermediary endorsement, but performs the setting function through smart contracts, which is transparent, efficient and fair. In the context of GameFi, DeFi provides a trading basis for in-game assets, guarantees the right to earn and transfer the above-mentioned NFTs, and deploys a good private property rights system on the blockchain at a fairly low cost.

The nP2E business model is the result of the above elements, and blockchain, token systems, NFTs and DeFi are the basis for the P2E model to significantly reduce transaction costs and improve the user experience for players:

GameFi's game resources (i.e., NFTs) can freely choose the transaction object and transaction price; GameFi's game currency (Token) can be freely traded and priced. With these, GameFi can truly empower players and make them the protagonists of the game world.

Taking PUGG as an example, UE4 technology creates the top picture quality of the game, Layer2 cross-chain technology realizes visual NFT transactions, and virtual bar scenes create safe and efficient encrypted social. GameFi and SocialFi share the characteristics of blockchain decentralization natural adaptation, the two in the process of intersecting and colliding, the game provides the most natural encrypted social place for social networking, combined with cryptocurrencies, crypto transactions, this platform with unlimited development can achieve business circle breaking, covering more life and business scenarios... A decentralized UGC platform, what can you think of?

That's right, metaversal!

At present, the concept of metaverse is still in its infancy, and GameFi is recognized as one of the most important thresholds closest to the metaverse, opening up the channel between GameFi and SocialFi, and providing an open shared platform for each user to highlight value and obtain benefits in the perfect and self-consistent economic system built by DeFi - even if this is not the most complete face of the metacosm, it is also a feasible platform for the metacosm to enter.