GameFi Paradigm: Exploring the Aspects of GameFi
In early 2021, DeFi protocols boosted liquidity and significantly increased their TVL, yet the prices of their governance tokens sometimes did not reflect the market surge. The market was flooded with farming programs and staking with high APR rates.
Governance tokens were rewarded as an incentive to attract new players. Simply staking liquidity provider (LP) tokens could earn attractive APR rewards along with automated compounding transaction fees three times daily. Subsequently, selling pressure came in to adjust the previous protocol's excessive inflationary monetary policy with a rare loss to zero all prior profits, by this, being measured by the token offering inflation. Some protocols existed for less than a month.
Detractors of DeFi called these protocols upgraded Ponzi schemes.
For some DeFi protocols, an issue became visible as market participants began to realize that initially high APRs were activated by the issuance of inflationary governance tokens. The issue became more serious when the community consensus didn't find utility in its protocol governance.
The clear solution is to add an additional factor to disrupt the exposed issue. However, the launch of new betting groups, the announcement of additional partnerships and the sale of NFT Land may prolong the project's livelihood but not be feasible methods to address sustainability issues.
What GameFi needs is a new mindset, fitting both the product and the community. The following sections will discuss two directions that GameFi protocols will use: one direction focuses on the "Fi" aspect, and the other direction emphasizes the "Game" aspect.
GameFi Paradigm
In late spring 2021, GameFi and its new play-to-earn system appeared with a similar DeFi story but with more complex ROI thinking. The most notable example is Axie Infinity with its dual-token-plus-NFT legendary system: governance token (AXS), utility token (SLP), and NFT with degrading ability over generations (Axie).
Governance token (AXS), utility token (SLP)
A tokenomics design including a governance token, a utility token, and easy-to-manage protocol groups easily managing community consensus by stabilizing the market price. This is an elegant tokenomics design that has been used in many GameFi protocols, including popular X-to-Earn models today, such as StepN.
Strategic advantage of GameFi is much easier conceptual play users. Users much participation easier boring Defi protocols. criticize advantages game project real good. Research attributes significant income included. Blockchain real process base may
