Economic Elements of GameFi Ecosystem

DeFi

Decentralized finance is a system in which financial products are available on a network of public decentralized block chains, making them available to anyone, not through intermediaries such as banks or brokers.

In the GameFi project, DeFi aims to improve the profitability of investors, maximize the efficiency of funds involved in block chain games, facilitate players to sell, rent their game assets, or put their own tokens as liquidity providers (LPs) in pools. Even if the game lacks playability, the use of DeFi attracts players associated with encrypted currencies and spawns a variety of casual games.

Nevertheless, decentralisation is the biggest difference between GameFi and traditional games. In traditional games, game producers/designers often play the role of God, not only designing stories for players to experience the game, but also acting as the central bank to release and recycle game resources. Traditional games can control game resources in time, prevent economic collapse and prolong the game operation cycle because of its powerful centralized means. On the other hand, game companies deprive players of ownership of their assets, and it is not uncommon for traditional game companies to shut down accounts or servers at will.

NFT

NFT digital assets represent real-world objects such as art, music and video. They are usually traded online with encrypted currency, and they are usually encoded using the same underlying protocol as many encrypted assets.

Most in-game NFTs are game items that contain interactive NFTs and NFT collections:

Interactive NFTs can be applied to battle and upgrade, training, merge, cast, inheritance, such as incubators, elves, cards, avatars, advanced, training and inheritance, to enhance player performance in the game. Collective NFTs move away from gameplay by involving entertainment scenes and limited battle attributes, enhancing the fun players have such as land, skin, cosmetics and badges.

In-game NFT has the potential for interoperability compared to regular NFT. Some game platforms have achieved interoperability of virtualized avatars, and some game collaborations will convert irreplaceable attributes to each other. Although some of the game pioneers envisioned cross-game, cross-chain NFT interoperability, there are still some unsolved issues between block-chain technology and the smooth experience of the game.

FT

FT in GameFi projects is often the game currency used to define the potential value of resources in the game, making the economy within the game possible. Money, players, resources and goods form an economic system in which each element is related. Players maximize their own interests during the game, so the value of money controls their behavior and determines what they do and who they do it for. Money plays a leverage role in regulating economic behavior throughout the game, linking different elements together and coordinating player profits.