NFT Gaming Reimagines Industry’s Dynamics As It Expands Blockchain Ecosystem’s Horizons
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While the legacy gaming industry has grown manifold over the last decade, most games, either online or offline, are structured in a way that usually benefits game developers and perpetuates a one-way flow of value. Legacy games like Call of Duty, GTA, Hitman, Sniper Elite, and others offer in-game purchases whereby players spend actual money to gain access to in-game assets like legendary skins, guns, XP, and more.
Even though players spend thousands of dollars to purchase these items, ownership over these assets usually remains with the game developers. If developers decide to shutter game servers, all in-game assets will no longer be accessible. Additionally, existing in-game assets don’t have any intrinsic value in the outside world. Players can’t monetize them in secondary marketplaces to recover their investments if and when they want to quit playing the game.
This is where blockchain technology enters the picture, delivering actual decentralization and real ownership of in-game assets while rewarding players for their time, loyalty, and investments. With the emergence of cryptocurrencies, non-fungible tokens (NFTs), and decentralized finance (DeFi), a novel concept, NFT gaming, has cemented itself as the gateway to a new world gaming economy that rewards players.
By design, NFTs are unique collectibles minted on the blockchain. Each NFT is unique and holds a relative value for the underlying item represented. This feature makes them suitable to use in games as representations as characters, consumables, and other tradeable items. As players purchase these NFTs, they not only exert ‘true item ownership’ but can even sell, trade, and exchange in-game assets on open marketplaces to generate returns.
Supporting Actual Gamer Ownership
In contrast to legacy games, NFT games, most of which are decentralized applications (dApps), focus on generating value for players. This very paradigm shift allows players to take full advantage of the value of assets acquired through in-game purchases, gameplay, and promotional events.
For example, a player who purchases an armor upgrade in a traditional game only benefits from enhanced gameplay within that context. However, suppose the same armor is tokenized using cross-platform non-fungible tokens (NFTs). In that case, the armor is transformed into a transferable asset that can acquire benefits across connected games or be exchangeable for other digital assets or currency.
Recently, the blockchain ecosystem has been flooded with dozens of NFT games, and gamers are already voting with their fingers. Echoing this reality, more than 840,000 unique users joined at least one of the available play-to-earn gaming smart contracts, growing the aggregate usage by 121% in terms of unique and active wallets between June to July of 2021.
Among the many promising NFT gaming outfits, Xaya, a gaming and dApps platform, has been involved in blockchain development since 2013. The Xaya team released the globe’s first blockchain game, Huntercoin, a fully decentralized Massively Multiplayer Online (MMO) game, in February of 2014. Following its success and several years of research and development, Xaya has teamed up with GeekyAnts to bring Soccer Manager Elite, the premier sports management game, into the blockchain ecosystem.
Splinterlands is another NFT game that is on a mission to empower players. It has established itself as one of the fastest-growing blockchain-based digital card games, with over 326,000 daily players in September 2021. Unlike other card games, each card issued on Splinterlands is an NFT that holds real value depending on the rarity and market demand.
As a result, players can easily buy, sell, trade, or exchange these cards both in-game and on open marketplaces to earn additional income. Splinterland's snowballing growth follows that of the NFT industry at large, particularly in August when trading volumes regularly exceeded $500 million per day. Likewise, Splinterlands witnessed nine-fold growth from July to August as a given its corresponding dependence on NFTs.
With the growth of NFT games, existing chains like Ethereum have come under immense pressure, leading to network congestion, high gas costs, and low throughput. While several layer-2 scaling solutions have arrived, Jelurida’s Ardor blockchain features an embedded solution. A multi-chain architecture that includes a parent chain with customizable child chains makes Ardor perfectly equipped to support myriad real-world use cases, including gaming.
To further enhance Ardor’s capability, Jelurida has also developed Ignis, the child chain of Ardor. With the 100% pure proof-of-stake (PPoS) consensus mechanism and the multi-chain architecture, Ardor has established itself as a fully equipped platform for NFT gaming. These unique attributes are already being leveraged by Triffic, a mobile app that employs augmented reality and gamification to distribute GPS tokens to users based on mobility.
Another emerging NFT gaming project, Bridge Champ, is also leveraging Ardor to offer its global user base the option of online bridge gaming using blockchain technology. The Bridge Champ game environment is based on Ignis and will feature in-game currency for registration and competition management. Game results and gameplay will be secured via the child chain, significantly reducing the possibility of cheating or fraud.
IQ Protocol is another promising project that can connect NFT gaming to the DeFi ecosystem. Developed by PARSIQ, IQ Protocol is a completely new technology for DeFi. The IQ Protocol introduces the novel concept of Power Tokens, which allows businesses to tokenize their services. By assigning LifeTime Value (LTV) to these tokens, IQ Protocol transforms conventional utility tokens into ‘Power Tokens,’ which generate utility over a predefined period, facilitating a new generation of subscription-based businesses and blockchain games.
Ideally, in NFT games, players need to purchase the NFT to experience it and use it in-game. If the player no longer wants the NFT, the primary way to recoup the time and energy invested is by selling it to other players. But with the IQ Protocol, players can rent NFTs for a nominal fee instead of buying them. Additionally, players can stake their NFTs on the lending pool to generate extra yield.
In light of the continued surge in demand for NFT gaming, these innovative platforms and blockchain-enabled solutions will play a critical role in transforming the global gaming ecosystem.