Written by: WhiteForest, Partner, Foresight Ventures
NFTs Make the Internet Ownable
Everything can be NFT, and it is of great significance to permanently confirm the rights of items on the blockchain, because the blockchain is a public peer-to-peer ledger, which gives people a tool to store value independently, and NFT is used as a value carrier to allow users to store various items. types of assets. As Jesse Walden (former partner of A16Z) said "NFTs make the internet ownable", creators issue NFTs, which enable creators to retain ownership of their content without restricting the dissemination of their files on the Internet. Creators get incentives from the whole life cycle from sale to resale, and consumers buy NFT to truly own a traceable and irrevocable asset, and conduct license-free free transactions through various marketplaces or person to person. As such, NFTs have the potential to upend the ownership model of media product creators, audiences, and developers building for them, a viable alternative to platform-driven monetization.
Ownership is what motivates creativity. In the past private enterprises, only a few people controlled the lifeblood of the entire company, and employees and users were completely dominated. With the increasingly intensified market competition and the development of the modern corporate system, companies have begun to bind the interests of employees and the company by distributing equity, but it is still unavoidable that minority shareholders have almost no influence on corporate governance. And it doesn't address the conflict of interest between the user and the company. When the company is in a monopoly position in the industry, with the help of advanced big data and artificial intelligence technology, users even become the party to be exploited. The emergence of DAO has subverted the bloated organizational structure of traditional companies to a certain extent, allowing every member to become a manager and contributor to the organization, further stimulating the creativity of members.
Tokens are the core of ownership. Various blockchain protocols enable users to have the governance rights of the company through the distribution of tokens. Users are equal to the owners of the platform, which truly binds the interests of founders and users together, creating a strong chemical relationship. reaction.
Token incentives are innocent
image description
Source: duneanalytics.com
Token incentives give them a way to attract users, solve the financial difficulties in the early stage of entrepreneurship, and help these long-tail creators to show their talents, which is exactly the goal pursued by the blockchain.
It is true that purely profit-oriented players like Dajin Studio may have a certain impact on the game experience. In the end, a successful game will select the type of players they want to achieve a balance between gameplay and profitability.
Owning virtual assets is a status symbol
Humans are extremely social creatures with an innate desire to belong to a community. During tribal civilizations, it was difficult for a person to hunt effectively and live alone. A great way to be accepted by a group is to show your identity by showing other community members items that you value. Thousands of years later, people still tend to show status through the items they buy. The two cars in the picture below, even though the car on the left is more fuel-efficient, more spacious, and cheaper (availability), people will still choose the car on the right to show their identity if conditions permit. The item's ability to assert status stems from scarcity and even high price itself.
Here are four figures:
On June 28, 2021, the research institution Strategy Analytics released a report stating that half of the world's population owns a smartphone, about 4 billion people.
According to IDC data, global shipments of wearable devices will reach 400 million units in 2020.
Statista estimates that the global shipment of AR/VR devices in 2020 will be 5.5 million units.
The total number of users of opensea, the world's largest NFT trading platform, exceeds 200,000.
image description
Source: duneanalytics.com
In the past month, opensea has become the protocol with the most income and destroyed ETH on the eth chain. NFTs represented by CryptoPunks have continuously set new highs in prices. Rich people are willing to spend 4 million US dollars to buy an avatar. As early as June 18, the virtual real estate plot NFT in Decentraland was sold for MANA worth more than 913,000 US dollars. Gathering is a trait we acquired early on as hunter-gatherers (those who collected the most berries had a higher chance of surviving), and some psychologists believe it allows us to connect with something larger than ourselves. NFT is the only digital asset that people can actually own, and NFT allows people from all over the world to show their identity by acquiring rare and expensive assets.
image description
Source: nonfungible.com
Blockchain can make games last longer
image description
Source: dappradar.com
I think the reasons why blockchain games have longer vitality are:
Managed on the asset chain and owned by users. NTFs make assets ownable.
Efficient, low-carbon, and low-cost creation of assets.
Perpetual operation of smart contracts. There is no need to worry about game operators stopping servers, which also protects the value of assets held by users.
Player autonomy. Hold tokens to participate in game governance and share game revenue. The Sandbox encourages creators to create voxel assets and sell them as NFTs, and can also create and monetize games in the metaverse. Purchasing in-game land allows free construction and makes it more valuable.
Tokens incentivize developers. By issuing tokens for financing, developers no longer need to compromise on game revenue and can support their long-term creativity.
from the economy. Due to the issuance of tokens and the settlement and value storage of the blockchain, the game can build a world infinitely close to the metaverse on the blockchain. A good economic model design allows blockchain games to have a more self-consistent economic cycle than traditional games system.
Players are used to spending tens of dollars on a piece of equipment or skins to enhance the game experience. If these assets exist permanently on the chain, the game will never stop. I believe players are willing to pay more to buy this "permanent ownership".
Due to the throughput of the blockchain, most games are only settled on the blockchain at this stage. At present, there are relatively large games that are fully running on Dfinity. It is believed that with the improvement of blockchain performance, more and more games will be fully deployed on the blockchain.
Metaverse cannot do without blockchain
image description
Source: NVIDIA
we are at
we are at"Play-to-Earn is the Next Liquidity Mining, Is Axie Infinity Overrated?" "Introduced the Play to Earn mode detonated by Axie Infinity. By playing games, Filipino players can earn $500 a month in the game. This model has inspired a whole new industry—Game farming. Guilds, including Yield Guild, and many gold-playing players poured into this farm. We often joke that NFTs are jpgs, because most NFTs have no use value, but the game makes NFTs play their usability.
In order to better explore the properties and utility of different types of NFTs, here are five classifications of NFTs:
Collectibles: No practicality, only stories and collectibles, such as NBA Top Shot
Game assets: Assets that have a certain utility in the game universe, such as AXIEs
Virtual land: Virtual platforms available for development in the Metaverse, such as Decentraland, Sandbox
Encrypted Art: Artwork marked and confirmed on the chain, such as "Beeple - EVERYDAY: THE FIRST 5000 DAYS"
Others: domain name, title, insurance, etc.
NFTs generally have meme, collectability, rarity, usability, and sociability.
Story Collectible Scarcity Availability Social Collectibles √√√√Game Assets √√√√Virtual Land √√√Crypto Art √√√√Domain Name, Property Rights√
We can see the usability of game assets compared to collectibles and crypto art.
I have thought for a long time in the past that the mainstream of NFTs should not be just collectibles. So what kind of asset type will become the large-scale application of NFTs? I have considered the direction of physical asset chaining and property right confirmation, but I have never found a catalyst for the industry. The success of game modes like Axie Infinity came earlier than I thought, and I saw a great shift.
Game Make NFTs Producible, the game turns NFTs into mining machines and real estate. In a steadily developing game world, holding NFTs can not only enjoy the value-added of the ecology itself, but also get token incentives by playing games.
play to earn has ushered in a new era, and this method of mining through NFTs will create a huge amount of assets and value. Over the next few years, we will see NFT farming operations rivaling earlier Bitcoin mining operations in terms of scale and potential revenue generation. NFT mining will be powered by people in low-income countries, changing their income structure. It is also foreseeable that play to earn will also go through the process from small farmers to intensive agriculture.
This change can't help but make people worry that if most of the players in the game are actually artificial intelligence algorithms, is the game still a game? In fact, in our current world, manpower has already competed with machines and intelligence on a large scale. Self-driving cars will soon replace drivers, and textile assembly lines have already eliminated millions of textile workers. The progress of the world is unstoppable and does not stop with human weakness. When a game develops into a metaverse, it is no longer a game in the traditional sense. Its huge number of participants and the value created will be enough to support its internal normal economic cycle.
Introduction to Play to Earn mainstream modes
NFTs reproduction
This is a typical pattern used by Axie Infinity.
Cost side: 1. Consume ETH to purchase Axie; 2. Consume AXS and SLP to breed Axie.
image description
Source: Axie Infinity
battle rewards
Earn erc20 token rewards through battles, also take Axie Infinity as an example
image description
Source: Axie Infinity
tradable cards
Get tradable card NFTs, which can be sold for profit.
Take skyweaver as an example.
Ranking: According to the season ranking, top-ranking players can get card rewards.
image description
Source: Skyweaver
venue commission
In the game, there are players in the venue or the guild, and the commission used by the venue or the share of the players in the guild can be divided.
Taking Derace as an example, players who own the racetrack can get a share of the horse racing fees and bets.
image description
Source: Guild of Guardians
resource extraction
Landowners get a share of the resources extracted on the land.
the game
Source: League of kingdoms
the game
Bet against the opponent, and the winner will get the opponent's assets or bet rewards.
image description
Source: DeRace
The LEGO world of NFTs is just getting started
Due to the programmability of tokens and the composability of smart contracts, we have seen that the DeFi world has built a very large Lego world, and the composability between protocols has created huge liquidity and income. As an equally programmable token, NFTs have potential far beyond current transactions.
Famous NFTs artwork Hashmasks has entered into some exclusive NFT partnerships with Terra Virtua. Now they have or will get virtual land in four different digital worlds: The Sandbox, Cryptovoxels, Somnium Space and Decentraland. On these lands, they will host community events, fairs and museums. The Hashmasks team will also be commissioned to develop a video game. The game should use Hashmask as the basis for development.
Source: Hashmasks
The NFT work Fluf World sold on August 8 has more expansions in terms of usability. Players who take down FLUF NFTs will first have a 3D rabbit animation with background music. In the future, Fluf World will introduce many interesting functions for NFT:
Player design background story;
Create a voxel FLUF in the metaverse;
Add reproduction function;
Introduce FLUF into different games as characters;
Invite artists to create theme songs;
Add stake function;
Create entity FLUF etc.
These designs all enhance the usability of NFT and give players a "commitment effect". Just as a work of art, people will not have other expectations for it, but after adding these usability, players have expectations for it, and NFT will accumulate value as the promise is slowly fulfilled.
(Conversely, because the artwork does not have a "commitment effect", its price will increase faster)
Source: Fluf World
GamFi Era Begins
At present, the global art sales are basically stable at about 60 billion US dollars, and the growth is slow. The total value of global games has reached 180 billion US dollars. Obviously, the market space for NFT game assets is much larger than that of artworks. The value-added of artworks is mainly generated in the resale link, and the platform captures less of its value. However, the cost of creating game assets on the game development platform is very low, and the platform captures more value.
At present, the circulation market value of AXS is close to 4.1 billion US dollars, and the total circulation market value of the second to fifth places is less than 1.5 billion US dollars. Therefore, there is still a lack of big projects in the market. Looking at the traditional game market, hundreds of games can be accommodated, iterations are fast, and there is no Matthew effect. There is also less competition between games for users as users have enough time to accommodate several games and pay for each one. Therefore, the market structure of GamFi will be very different from DeFi, full of huge investment space.
refer to
refer to
1. NFTs make the internet ownable — Mirror
2. The Ownership Economy: Crypto & The Next Frontier of Consumer Software – Variant
4. https://www.playtoearn.online/2021/08/05/hashmasks-moves-into-the-gaming-metaverse/
IOS
Android