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GameFi-2022: perspectives, problems, and elegant solutions
What are Play-to-Earn and GameFi? What do these definitions mean? Why does the hype revolve around it? Let’s start with the fact that gaming itself is a global market. As of the beginning of 2022, there are around 2.96 billion gamers in the world while the gaming industry market size was $180.3 billion in 2021. According to GlobalData researchers, the global gaming sector revenue will reach $300 billion by 2025.
But regardless of these seemingly phenomenal numbers and growth rate expectations, the gaming industry has a major drawback. In fact, gamers do not exactly own their gaming assets, or in-game items like equipment, weapons, artefacts, and other bonuses that impact the gaming process. Those items exist within the game, they are stored on the gaming servers and are essentially owned not by gamers but by the company, the developer of the game.
Consequently, such virtual items have no practical value and are categorised simply as entertainment. This is exactly the problem that a new economic model — Play-to-Earn — on which all GameFi projects are based, is solving.
What is GameFi?
In comparison with traditional video games that usually offer the Pay-to-Win model (gamers invest for gaming advantages), GameFi projects bring forward the Play-to-Earn model. It means that gamers can not only grow as a gamer by relying only on their skills and knowledge but also get financial rewards for it.
Another distinctive feature of GameFi projects is that they are launched in the decentralised environment, namely blockchain. Therefore, if gamers purchase any given gaming NFT, for example, characters, artefacts or weapons, gamers are their only rightful owners.
How do GameFi projects work?
Currently, there are plenty of GameFi project forms. Respectively, there are several ways to earn money. In general, such games offer several ways to generate income.
Let’s start with the fact that gaming rewards are mostly paid in the project’s token. If a game becomes popular, the currency rate grows. Gamers might purchase tokens for two reasons:
- Utilitarian. Tokens are used to mint cards that allow earning new coins.
- Speculative. In-game currencies allow purchasing unique NFTs that could be resold for profits.
In simple terms, the more the number of active gamers, the higher the value of the in-game currency and gaming NFTs. That is why GameFi projects create mechanics that offer rewards for performing any action in the game: conquering the mission, PvP battles etc.
The NFT technology allows gamers to claim their ownership rights for any NFT object that they got in the game. As in regular video games, users can obtain avatars, weapons, territories, trophies, resources and even pets. It all depends on specific game mechanics. In GameFi projects, gamers can sell gaming NFTs directly or on marketplaces and generate profit this way.
The main GameFi problem
Currently in the market, there are an enormous number of games built on the P2E principle. Far from all are promising. To earn here and now, it is reasonable to enter warmed-up projects that have significant entry barriers.
For example, let’s take one of the popular games Axie Infinity. To enter the game, a gamer needs three characters; the average price of each was around $220 in 2021. Thus, an entry ticket cost around $660. Of course, the majority of gamers are not ready to pay so much to get access to the game.
The GameFi sector statistics shows that most of the gamers are citizens of the countries with emerging economies where gaming earnings could exceed the average wage level. It is only logical that such a high entry barrier for such players is too much.
As a result, in the market, the demand for renting gaming characters and other NFTs is significantly growing. This problem slows down the scaling and new gamers inflow. Apart from that, in society what hardens is the popular misconception that earning solid income is only possible with significant capital investment. But as known, there is always a solution, and here is why.
Lifebuoy for P2E gamers
The meeting of the demand for renting NFT is pursued by recently emerged gaming guilds. Many of such guilds sprung in the Philippines where P2E games got the most spread.
Such guilds purchase gaming NFTs and rent them to their members. Apart from that, they train gamers, hold competitions among them etc.
Nevertheless, the resources of the guilds are limited and they can not purchase enough NFTs to meet the market demand which is constantly growing.
Not a long time ago, a new guild emerged that went further in solving this issue. In addition to renting out their own NFTs, Meta DAO Guild decided to use the resources of other market participants.
The matter is that purchasing gaming NFT is only affordable to people with high income. Such people usually have no opportunity or desire to spend several hours a day completing gaming tasks because, for them, gaming rewards are relatively less valuable, in comparison with the majority of developing countries.
Because of this, games lose in the number of active users. At the same time, the gaming NFT owner misses profit without gaming rewards for participating in the gaming process.
Meta DAO Guild is creating a platform that will bridge such gamers and gaming NFT owners under the name MetaRent.
It is a p2p platform for renting gaming NFTs. If users for whatever reason do not want or can not spend time in the game, they can rent out their gaming NFTs to those who lack money for its purchase but want to play.
Gaming profits are distributed among the gaming NFT owner and the lessee. In this way, investors do not lose money because of idle time while gamers can enter most popular games without initial investments. The platform also offers tools to guarantee fairness and transparency of the deals on both sides.
The MetaRent platform working principle
To cut a deal through MetaRent, the NFT owner needs to register and choose a gamer from the list. Also, the owner can place an ad about renting out the NFT and choose among responders.
Without a doubt, leaseholders risk facing inexperienced gamers that not only bring no profits but also waste the time. The Meta DAO Guild team foresaw this moment by implementing the educational and ranking system for gamers. This way, NFT owners can access the ranking and choose the best candidate among available gamers.
To rent out the gaming NFT, the user locks some funds on the smart contract that will serve as a guarantee that a gamer will get paid. This way, MetaRent provides users with instruments that guarantee that both parties comply with an agreement. The NFT owner has to share part of the gaming rewards with the lessee.
The Meta DAO Guild ecosystem
In addition to the platform for renting gaming NFT MetaRent, Meta DAO Guild also offers other services essential to the GameFi industry development:
- Scholarship is an educational platform for guild members and gamers, as well as a renting system for the guild-owned NFTs;
- MetaExchange is a liquid platform for exchanging gaming NFTs;
- DAO Launchpad is a decentralised fund for venture investments in the GameFi projects.
More details on DAO Launchpad
DAO Launchpad deserves special attention. Gaming guilds gather significant communities around them. That is why new gaming projects address them at the early stages of capital raising and development to get access to financing and, most importantly, to a motivated community. Meta DAO Guild develops a modern decentralised instrument to bring this mechanism to life.
With DAO Launchpad, the community members get opportunities to invest in the GameFi projects at early stages to make manifold profits on it. The fund itself is built on decentralised governance principles. In other words, each holder of the platform’s tokens MDGG gets the voting rights for choosing the GameFi project for investing.
Nowadays, in most cases, it is impossible to enter any project “off the street” since token sales are invite-only. Such sales are accessible only to big venture funds. But DAO Launchpad grants regular investors the opportunities to purchase the tokens of GameFi projects at early stages when the sales are still closed. In addition to that, community members get access to the games themselves during alpha or beta testing. This gives them an opportunity to buy gaming NFTs early, as well as other gaming advantages.
By staking MDGG, an investor gets rewards in tokens of the most promising gaming project in which the fund has invested.
Such investments can bring 1000x in the middle and long term because such numbers are no big surprise in the GameFi industry.
Example: In 2020, the creators of the game Axie Infinity sold 10.8 AXS tokens in the closed financial round and attracted $860 thousand. This way, the initial price of the token was $0.08. Now the price is $66 with the all-time high being $101 in autumn 2021. The profits that venture investors made was 1200x on the peak, or 825x with the current price level.
Meta DAO Guild recently announced that the Private Sale round with MDGG tokens available for sale will be held on February 22. The token sale will start at 22:22 UTC. Preliminary registration is already open on the project’s website. The token offering is strictly limited.
Summary
Last year brought exponential growth and universal recognition to blockchain games. The P2E format won the attention of millions of gamers all over the world while GameFi became a real mainstream. With the rapid growth of the industry several crucial issues have emerged and impacted various market players:
- The gaming NFT owners’ problem: owners missing potential profits because of lack of time for the game.
- The gamers’ problem: gamers not having enough funds to enter a popular project.
- The gaming projects’ developers’ problem: developers seeking active and loyal audiences.
The Meta DAO Guild creators have found an elegant solution to unite market participants. Henceforward, owners will not worry about the gaming NFTs idle time, gamers will have access to the most promising P2E games without initial investments, while gaming projects will be equipped with the motivated community and financial support. Meta DAO Guild is a new chapter in the GameFi sector development.
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