Based on the background of DeFi, GameFi came into being. Nowadays, most GameFi are terminal games, which are developing towards mobile games. These games had caught attention of many young people with their ‘Play-to-Earn’ slogan. Generally speaking, if you want to enjoy the process of "play to earn", you must first "pay to play", which also means that most GameFi have a basic admission fee. In this case, no matter if it is a game from Steam, or it is a traditional point card time-consuming game like 'Fantasy Westward Journey' and 'world of Warcraft', or maybe the hottest free entry game with most popularity that are free to players but it may contain additional purchase items(month card gift bags or clothes/skins), they have not much difference with GameFi. The main difference is the payment method, the traditional games are paying with basic currencies, but GameFi is paying with cryptocurrencies instead. Most of the GameFi is replacing account names and passwords with Web 3.0 wallets. The commonly seen cryptocurrencies include ETH, OEC, polygon network, Solana, WAX, Polkadot and BSC.
As one of the representative products of DeFi decentralized finance, GameFi also adopts DAO in management, which is decentralized self-governance organization. Every single coin holder will participate in the future development of the game, affecting the future trend of the game. There is no doubt that among them the biggest interest holder’s voice is being most heard. Some games even have more than one DAOs to manage the game. For example, in the planet mining game, each independent galaxy or planet has their own DAO to manage their domain. However, since there is no absolute governance rights, DAO will not meet all requirements. Some necessary protection measures for the underprivileged players also needs to be considered.
Players can be divided into two categories: ‘play for fun’ and ‘play to earn’. In other words, game players and miners, the former is more willing to spend money on better game experience, while the other one focuses more on making money. But it is often the first kind of people that determines how far a game can go. If a game is full of miners, actually its economic system has actually collapsed.
As players, they are most concerned about the game currency and the corresponding NFT derivatives. Every game has one or multiple kinds of game currencies that can produce, destroy and generate relative sub products in daily activities or rewards. Game currency can be used to trade with others in order to exchange for usdt or cash. The sub products can promote the process of mining, they can also be traded as currency or cash in market.
Therefore, we can sum the difference between the average daily output and average daily consumption of tokens in the game to get the total amount of tokens. GameFi
Now Tokens and sub products can be sold in market, so how will their values be defined?
From the perspective of output consumption, players play games every day and getting tokens as output; produce in the game and consume tokens as well as sub products. Sub products can be used to produce tokens, or be traded with other players in the market. The following settings can be made:
when the consumption or the speed of each production increases, and a more "powerful" sub product will be generated with probability, then there are situations like below:
1. When the cost of production consumption token is relatively low, players accelerate production and produce a large number of sub products for better game experience, which will accelerate token production as well.
2. When the cost of producing consumed tokens is high, or even greater than the selling price of token or sub products, players will stop producing(not excluding the probability of players gambles for the rare products) and sell tokens or sub products instead.
To be specific, the sub products are the completely the outcome of game, which have no additional economic value placing alone in the real world. Their value depends on the popularity of the game: when new people gather in, the sub products are used as "tickets", which is also the necessary item to participate in the game. Those players who ‘play for fun’ collect more and more to raise prices for a better game experience. In terms of game popularity, IP speculation is a common practice to attract players and raise the price of sub products by associating secondary creation (animation, peripheral manual creation, player design competition, related story creation, etc). If the popularity of the game decreases, the price would definitely be affected.
At the same time, there is another factor: the influence of random event variables for games. This event could be: the rules of the game change (Dao autonomy is not necessarily conducive to the development of the game); the performance of the game itself (entertainment, attraction); market impact, etc. The design of game rules also make great influences. Around 2005 when world of Warcraft was released, this event can be called the shock wave of the game industry. The joy of laying with a large number of players and taking part in difficult challenges is really attractive to innumerable people. Several decades have past, the difficulty of the game mode and the number of players required to play has been reduced now. Nowadays the random online matching mechanism has been introduced to meet the changing needs of players but the occasion of countess players playing together is not coming back. At the same time, the rise of various multi-player 5v5 moba games or randomly matched big escape games has satisfied the current crowd's needs for games with their real time interaction and randomness: anonymous social networking, instant interaction and pressure relief. Of course, there are still people who are refusing to socialize but dedicated to independent construction or cultivation games, or stand-alone games similar to 3A, which can be used as a reference for the design of game rules under reasonable circumstances.
The three factors mentioned above affects the token price and also sub product price. Therefore, there will be "goblins" in the market. They don't play games, but when they notice that players' demand for tokens increases, they store coins, copy low-priced goods, raise the price of currency, and then release goods at high currency prices to obtain more currency. When the currency price reaches its expected value, they sell big amount of currency, resulting in a sharp decline in currency prices in a short time. This kind of phenomenon sure have an impact on the game life, which requires game designers to take a deep thought.
Finally, we want to introduce several specific game economic models:
1. Collective and cultivate combat game
Axes infinity is known as the chain Pokemon. The base currency is SLP. Players can get SLP tokens when playing games. Consuming SLP can hatch Axie: a game sub product similar to a pocket monster. To play the game, you must have at least three Axies, which can be obtained by purchasing in the market:
The hatched Axie can be used or sold in market. The cost of each generation of incubation will increase every time, and the corresponding attribute ability will also increase.
2. Sandbox land development game
The essence of such games is land resources. To play the game, you must have a piece of land (purchase from the market), obtaining basic game currency (such as the sandbox token) through the game, consuming game currency to buy and develop land resources, and build towns. Land in different areas have different landforms that can determine the content of land like mines, forests and rivers have different outputs, and different NPCs or monsters appear randomly. The total sub products includes anything related to land and related products, which can be linked to game tokens and sold in the market. In addition, the game has a city government (DAO) to manage the region, and the landlords of the city can vote to customize the game development, or a simple farm type, planting and breeding, and selling corresponding resources.
3. Planetary mining game
For example, mines of dalarnia, their token is DAR. This type of game is kind of similar to the land development game, but not totally the same. This mode has two economic operation lines: landlords and miners. The landlord owns a planet of mines, who can consume game currency to upgrade his mine and buy more mines, attracting more miners to do the mining. However, the income sources are relatively simple (rent collection). In this type of game, the sub resources are more stationary, which is greatly affected by the market like futures. The miners only need to pay a certain expenses to the mine owner so that they can mine to obtain most of the mining income, sell or exchange to accumulate game currency. Besides, they can switch their mining options at any time according to the popular resources in the market for higher liquidity.
4. Racing game
The main part of racing type GameFi is the corresponding game currency, and the sub products like racing cars or assembly parts. Some games focus on racing, such as "F1 delta time" of F1 fanaticism powder. They would launch various F1 related virtual racing cars related production. Their first car called NFT ‘1-1-1’, sold for $110,000. Some other games focus on free track car battles, and their economic model is: you must have a racing car or rent someone else's racing car first, then get game currency by completing the race, and using the game currency to buy racing cars / improved assembles. Some racing games will allow players at a certain level to provide their own bonus for each competition, which will be shared by the participating players according to the ranking proportion, making the overall game with more combats and user participation.
5. Card game
This kind of game focuses on "having your own cards". Its essence is the consumption of game currency and creation of its own cards. Each card exists correspondingly on the blockchain and can be sold among players. The useful cards can help players win games and get more rewards, or gain profits by auctioning due to the rarity of cards.
6. Traditional action game MMORPG
This kind of game is still the old mode of golden coin-sub items (weapons, equipment, spell skills, etc.), and there is no difference with the existing classic game mode of world of Warcraft and Fantasy Westward Journey. Some studios even copied and applied the ideas like mining, developing weapons, buying gold/weapons.
In addition, there are some GameFi without specific sub products, but requires tokens to participate in the game and obtain tokens by winning. There are also composite games like Alien worlds that combines action game MMORPG and land development.
Farmers world economic model
IDO will be launched in December. Recently, it has a great trend and can be paid attention to.
Its economic model is as follows:
Entry requirements: own at least one tool.
Since the recent news release of IDO, the game has received a lot of attention, which is undoubtedly attractive to capital. However, considering that the lowest price of a tool is $650 / piece (11 / 25 / 2021), and for the beginning it may not be able to replenish energy in time, the entry fee will be higher than $700. For now this is a big entry barrier for the ‘Play-for-Fun’ players.
As shown in the figure: use different tools, consume energy, mine, and obtain the corresponding food / Wood / tokens from mining. Consuming food tokens to recover energy; consuming wood / mineral tokens in order to make or repair tools. All projects except 'energy' can be sold in WAX from their official market( https://wax.atomichub.io/market?collection_name=farmersworld&order=asc&sort=price&symbol=WAX ). The methods to destroy tokens in the game : destroy energy food tokens → obtain energy; destroy gold / wood tokens → obtain tools; consume energy and tools → obtain sub products or game tokens. It seems that there are four kinds of tokens used in the whole game (farmer coin, NFT related currencies, with a value of about 6WAX/$5.50) on the trading platform, but all tokens are traded in WAX. All in all, it is still in the form of WAX-USD.
WAX price trend: