Hello, this is editor P.
It’s been a while since the NFT Busan event, and I’m back to Research. If you are curious about the review of the NFT Busan event, visit [Outside Protocon] “NFT Busan 2021” Protocon Booth Review!(KR).
From this research, a new series dealing with the NFT game market will begin.
What is NFT?
Image Credit: Idea Usher
NFT stands for Non-Fungible Token, which means digital currency coated with distinctive content.
From an artistic point of view, NFT is like a blank paper, and you can draw and dress anything digitizable, such as paintings, photos, music, and game items, on the blank paper.
In addition, because it operates on the blockchain, forgery is impossible, so NFT functions as a digital certificate for ownership and can apply the concept of “original” to the digital art world where copying and pasting is prevalent. And it has the advantage of being able to showcase or trade the original NFT anywhere as long as it is compatible.
Image Credit: Illustration by OrangeCrush
Then, what is NFT game?
Let’s dig into NFT games now. “NFT Game” is one of the hottest keywords these days. According to DappRadar, the global transaction volume of NFT game items accounted for $2.32 billion in the third quarter of 2021 alone, which is 21.72% of total NFT transactions during the quarter. As such, explosive interest in NFT is reflected in the market, and it is clear that the size of the NFT game market is likely to grow further in the future.
Image Credit: DappRadar
Then, why is the NFT game that combines NFT and games so hot? The answer lies in the NFT game method. Traditional games are Pay-to-play whereas NFT games run in the style of Play-to-earn (P2E), where you earn money as you play the game. It is the same that you grow characters or get items by playing the game, but all existing games are consumed only within the game. On the other hand, NFT games differ in that gamers can make profits by selling digital assets to collectors and other players.
Image Credit: https://tapchibitcoin.io/
The way to play and learn the NFT game is as follows.
- Objects such as buildings, costumes, avatars, and weapons in the game are made of NFTs.
- Players can acquire these items while playing the game and exchange them for other items or game coins at the marketplace.
- Game coins acquired through sales can be cashed in on the virtual asset exchange.
- Players will play more actively because acquiring rare characters or hard-to-get items can make more profits.
Representative examples of P2E games include Axie Infinity, The Sandbox, Mir 4, Decentraland, and Star Atlas. In addition, numerous games are benefiting from the rapid rise of NFT games.
Image Credit: Axie Infinity Whitepaper
Among them, Axie Infinity is the most notable game. Axie Infinity is a game in which gamers raise Axie Infinity like Pokemon Go.
Grown axies can breed with each other to create a new species of axies, and depending on the growth process, it can be made into a unique axie. These axies are issued and traded on NFT, and if you perform a daily quest of the game, you can earn SLP, an in-game coin.
In the Philippines, the number of Axie Infinity users reaches about 30%, and people who lost their jobs due to COVID-19 raised and sold Axies, and it was used as a means of maintaining a living.
Lastly, let’s find out about the most special part about NFT games and wrap it up.
Existing games were played and items purchased were only available within the game, and the ownership of the item was transferred to the user. In other words, when the game service was terminated, the items that the users purchased disappeared.
In addition to shutting down the server, there were several issues due to rollback. Rollback refers to recovering game company server time before a certain point in time. If the item purchased by the user was purchased after a certain point in time, the item disappears.
Image Credit: Lineage M
An example is Lineage M’s pattern rollback case. They tried to reduce the gap between middle class players and below by improving the pattern reinforcement system which is a system that improves the character’s ability.
However, the problem was that before the restructuring, users who were charged for reinforcing the pattern protested, and eventually turned the server around to before the restructuring.
Then, this time, players who paid to strengthen the pattern before the rollback protested, and this case is an example of fatal problems due to the rollback were identified.
In the end, this case shows that if the server is returned to the previous one since the game company manages the server, even if the players purchased the item for a fee, it is not entirely the player’s.
Applying blockchain and NFT to games allows game players to be guaranteed ownership of their assets in the game.
NFT items are valuable as digital assets even outside the game. Therefore, you can get mortgage loans with items, and for some games if you make deposits inside the game then you can earn interest income through staking.
As such, NFT games are not just games, but are spreading to financial products, and NFT games are expected to help us predict the virtual economy that NFT is trying to implement.
In the next episode, we will cover the Axie Infinity game, which was briefly introduced today, so please look forward to the NFT game series that will be uploaded in the future.
You’ve been with Editor P!
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