The Hunt for Web 3 Gaming Models - PerfectionGeeks
The Game Is On: The Hunt for Web 3 Gaming Models
April 27, 2022 11:00 AM
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The Hunt for Web 3 Gaming Models - PerfectionGeeks
April 27, 2022 11:00 AM
Web 3 gaming, or GameFi, has changed the crypto world, accounting for 49% of the industry’s blockchain use. More than 1.4 million individual active wallets interacted with blockchain games in 2021, and venture capitalists have financed over $4 billion in games.
The development of NFTs ( non-fungible tokens) last year accelerated the boost of games. The Blockchain Game Report 2021 from DappRadar emphasized that “gaming” NFTs had over $4.5 billion in trading volume and accounted for 20% of the total NFT sales in 2021. Much of that was triggered by the skyrocketing increase of play-to-earn (P2E) tokens, mostly from one game – Axie Infinity.
But subsequent backlash and cratering token thrifts have transformed the way players, innovators and investors view this developing industry. And yet P2E isn’t a flash in the pan established on one successful game, but a possible route for the deployment and evolution of many new tokenomic models that bridge the gap between economic incentives and in-game experiences. The search for new models is on.
Web3 gaming is the function of decentralized gaming where the movements of a gaming ecosystem or a gaming platform, particularly that of the ownership of gaming assets and decision-making in all gaming aspects are delegated away from any major authority.
Web3 games are developed by combining blockchain into the gaming ecosystem and they let gamers express their view as to when and how the game should be created. Web3 gaming also lays down the basis of play-to-earn for players, and it transforms the pay-to-play element for them by offering asset trading, tradeable game tokens, and an opportunity to earn in cryptos while playing.
Web3 gaming delivers fair virtual markets for the gaming industry, where players can access and have a full license of in-game digital assets. These assets are held in the form of gaming NFTs and are distinctive.
Web3 gaming also delivers a wide scope of interoperability between different gaming ecosystems by connecting the in-game assets and players across platforms. The interoperability element relies on the type of blockchain forum that one selects for inventing a gaming ecosystem. For example, Polkadot or Solana have the interoperability component in the form of cross-chain communication bridges.
Axie Infinity, which is created on the Ethereum blockchain, saw the price of its AXS token increase exponentially by 31,500% in 2021. Axie was the first game to show an inventive tokenomics model within plays and deliver great economic incentives to the groups.
Its model had two groups of tokens that accrued value differently. The AXS token was the governance token, whereas the SLP token was circulated as in-game rewards. The SLP tokens could be traded on exchanges or used to breed new cute digital creatures. Breeding Axies needed both tokens and created NFTs that could be traded on NFT marketplaces. This multi-token economy and their interaction made an extreme economic model around the game.
The game’s popularity, however, put extreme force on its tokenomics. The rate at which SLPs were made was five times higher than their “burning” ratio, or the rate at which they were removed from circulation. That resulted in a steep fall in the price of SLP tokens, making the whole game ugly for users. You could play the game only after buying thousands of dollars’ worth of NFTs.
Still, the $3 billion market cap of Axie endlessness and its staggering $1.2 billion in annualized earnings signaled a huge chance in P2E games. Axie Infinity’s valuation has both intrigued and repulsed gamers and businesses in the traditional gaming industry.
Building on Axie’s popularity, guiding global gaming studio Ubisoft declared Ubisoft Quartz, a platform for managing and selling gaming NFTs. The backlash from gamers in its residents, however, was immense, and the project passed a quiet death. Gamers were repulsed by the blatant income grab of an NFT model, which added slightly to the general game experience.
Early last month, Axie’s SLP price collided, developing concern about the sustainability of the game’s tokenomics model. Based on our discussions, there seems to be a general belief among creators in Web 3 gaming that Axie’s P2E model may not be sustainable.
The founder of SuperGaming Roby John, one of India’s biggest gaming studios, began bluntly that “present crypto tokenomics models look more like MLM (multi-level marketing) or pyramid schemes. If the number of users remains low or static, the whole model collapses”.
While this has accomplished little to dampen the confidence around GameFi, it has sent serious innovators on a quest for new tokenomics models. Shreyansh Singh, director of Polygon Studios, believes the possibility for GameFi to make a complete financial ecosystem around gaming, including microloans for in-game assets, is immense. But that will take models created from scratch.
“The Web 2.0 ecosystem is not understandable with tokenomics, and the Web 3.0 ecosystem is not experienced with game development,” he said.
Numerous models are being experimented with. Ish Goel of Web 3 game PlotX thinks that skill-based P2E games will see massive adoption. He is gamifying projection markets with a P2E token and has seen profitable adoption in his initial rollout.
Both deal accrual and value collapse become critical in the new era of gaming tokenomics, according to Vish. He thinks Star Atlas on the Solana blockchain seems to catch an economics model similar to the whole world. By making a strategic and comprehensive metaverse play with incentives to make cities, warships, and so forth, it mimics models of land expansion and price preference that we see in the real world.
Last month, Siddhart Menon, a co-founder of WazirX, an Indian crypto business, and SuperGaming’s John declared the launch of Tegro Games. Siddharth announced its goals of creating a sustainable gaming model through effective categorization of Web 2.0 and 3 elements.
Tegro has ranked Web 3 gaming models into four generations with a variety of NFT and fungible token plays. Gen 0 contains pure NFT plays for games with low trade commonness. Gen 1 is designed for maximum liquidity and a combination of fungible and non-fungible plays. Gen 2 is developed for predictable supply and long-term liquidity. Gen 3 is a pure P2E play akin to a service economy or job economy. Ultimately, Gen 4 links to economic governance.
“We are now at a tipping point where every significant gaming title has a Web 3 system in place. However, most will begin at pure NFT plays, which isn’t something that saves players sustainably,” Menon said.
The search is on for tokenomics examples that will discover a sweet spot between in-game backgrounds and economic incentives. With the time it takes to create a game, we can expect several of GameFi models to hit the market within the next 18 months.
Gaming DAOs are the Gaming Decentralized Autonomous Organizations that serve as gaming platforms based on open-source regulations. They are not affiliated with any gaming executives or operators. Gaming DAOs are communitarian at the core and concentrate on making a player-driven gaming ecosystem.
Gaming DAOs can redistribute the ownership of a game in a whole community of different gaming ecosystems. This redistribution happens between players, game developers, investors, and traders.
Gaming DAOs power play-to-earn in Web3 gaming. It is a revolutionary gaming idea that pays players for their gaming participation and victory in the game. Traditional gaming standards do not have the same advantage. They deliver a one-sided deal of importance to the game administrators or operators.
But, in Gaming DAOs, the play-to-earn quality rewards both the player and the game designer. Play-to-earn powers the gaming economy, where the players are rewarded for their gaming talents.
Gaming guilds constitute informal classes of gamers, positively organized multi-game clans, and e-sport teams that employ play-to-earn on the expected communitarian ground. These gaming guilds are financialized as they function in a similar way to that of acquisition clubs. The funds of the gaming regulations are shared by the participants to purchase and acquire in-game digital assets.
The players in gaming guilds then play games with these in-game assets obtained in the state of unique NFTs, earning in-game tokens collectively and by splitting the income among all the players.
Gaming guilds have massively influenced the Web3 game market as they have an immense amount of accumulated in-game assets. They are also the growing base of new gamers, game speculators, and gaming NFT traders.
Another type of Gaming DAO applies the evolving class of incubators and accelerators. They majorly concentrate on developing the Web3 gaming platforms by delivering their expert ability to the founders. These professional incubators and accelerators pledge funding to build new gaming ventures. They also deliver advanced tools and technological solutions to build and upgrade the Web3 games.
Incubators and accelerators play an essential role in the development of Web3 gaming by delivering gaming grants and taking strategic initiatives to support the gaming clans and designers. This type of DAO brings together all the gaming stakeholders and investors to develop Web3 gaming financially.
Another essential type of Gaming DAO is that of the game developers. These DAOs venture into various Web3 game evolutions on a common platform. These DAOs determine the terms and conditions of how the game will be created ahead.
These terms and conditions are regulated by smart contracts. Designers’ Gaming DAOs autonomously run those using smart contracts.
Particularly entail the moderation of gaming content, in-game collectible policies, in-game voting, and auctions.
Web3 gaming has changed the whole landscape of gaming by integrating metaverse and blockchain technology into the gaming industry. It democratizes the gaming sector by eradicating central game administrators and proprietors of the gaming platform.
With revolutionary technologies like blockchain, DAO, and the metaverse, Web3 gaming also powers the financial aspect of the gaming sector. It helps the competition players encounter in lucrative activities like in-game digital asset trading and play-to-earn in the formation of NFTs. Therefore, Web3 gaming is a positive effort toward a changed digital gaming industry. You can reach our PerfectionGeeks Technologies Expert.