Introduction

Conventionally, within their ecosystems, individuals and nations will experience an increasing level of disorder over time.

We call this phenomenon an increase in entropy. The increase in entropy will bring a devastating blow to the entire ecosystem. Specifically in Crypto and GameFi, it means the imbalance and collapse of their economic systems.

This phenomenon has brought great challenges to all stakeholders of the project.

The increase in entropy is inevitable, and the current problems of GameFi cannot be completely solved by its own mechanisms.

What we need to do is to build on our strengths and avoid our weaknesses, combine GameFi on the blockchains with traditional off-chain games, and use each other's strengths to solve the weaknesses, thus ushered in the golden era of GameFi.

The On-chain Predicament of GameFi

In order to find a high-quality construction solution for GameFi, we need to have an understanding of the current predicament GameFi is facing.

The existing economic model is collapsing.

On March 29, the Ronin public chain behind Axie Infinity was hacked and lost $610 million in assets, which also caused criticism from the community and further shook players’ confidence in the game. But Axie's predicament isn't here. Affected by the COVID pandemic, the employment rate in many countries has dropped significantly. Axie Infinity launched the "Play2Earn" game model to broaden the income source of unemployed people in developing countries, which is undoubtedly a revolutionary innovation. Axie Infinity’s daily active users increased from 38,000 at the end of April, 2021 to 252,000 within two months. It has become the most trafficked Dapp on Ethereum, and Axie has also become the largest NFT collection series in history.

With its success, Axie's unique "Three Tokens" model of NFT+$AXS+$SLP has also become an object that the industry is eager to imitate, thus a number of "Axie-like" GameFi have blossomed on the market. But it is worth noting that with the decrease of APY, many games, including Axie, are facing a situation of "guild escape", gold diggers and guilds are constantly moving from one game to another, creating false prosperity, and leaving a turbulent situation.
Even though Sky Mavis, the parent company of Axie, launched the Ronin public chain and began to develop new games after Axie’s first crisis, this dumping trend has not been stopped. As of now, RON has fallen by 60% from its historical high, while SLP, which carries the dumping pressure of the entire Axie ecosystem, has continued to decline without turning back. Axie is inevitably heading for a "death spiral", and this has become a problem for many other similar games to think about.

The second predicament is the contradiction between the lack of NFT use cases and excessive supplies in the GameFi ecosystem.

Decentralized games are different from traditional online games. The copyrights and ownerships of game characters belong to players, and game development is highly bound to users' rights and interests. Therefore, in GameFi, it is more appropriate to use NFT to express users' rights and interests. But in addition, NFT has a relatively weak sense of participation in the GameFi ecosystem. In addition to breeding tokens and proof of equity, it is difficult for NFT to find more use cases to complete deflation. In addition, every time the price of NFT is high, it will cause the supply of breeding tokens and NFT to increase, which will result in the over-supply of NFTs and tokens in the ecosystem. $SLP in Axie Infinity is a very typical case.

The third is the over-emphasis on financial attributes, which has caused a contradiction in the gameplay.

GameFi had around 72,000 daily active players as of June 7, 2022, down 50% from February, according to Footprint Analytics. The reason behind this is that the market has been depressive and the overall profit return of the GameFi project has decreased, which has led to players’ exit of the crypto market.

It is true that GameFi's combination of adding financial elements to gameplay attracted a large number of players who favored asset appreciation in the early days. However, when the price of a token suddenly drops, it will cause a massive price rally as these players scramble to get out of the system. We can see that with the falling prices of $AXS and $SLP, the overall DAU (Daily Active Users) growth rate of Axie slows down. The horse racing game Pegaxy, which was popular in the Philippines not long ago, also caused a large loss of players due to hyperinflation.

This means that the development teams of GameFi, in the development process, should not only pay attention to the improvement of gameplay brought by the complicated economic model, but also need to take actions to ensure that the backlash of financial attributes is limited to a reasonable range.

Finally, the current GameFi products are weak in communication. The communication here is manifested in two aspects:

• Lack of player interaction in the gameplay.
• Blockchain games are isolated from each other, both NFT assets and game tokens can only play an important role in a single game.

The above two points are on the contrary to the spirit of Metaverse, and this is what GameFi, which has always advertised itself as an important carrier of the Metaverse, needs to improve.

YeehaGames aims to connect on-chain and off-chain

Based on the current predicament of GameFi, there are already multiple improved solutions on the market.

However, we have noticed that these solutions, whether it is the modification of the economic model or the improvement of gameplay, are more on-chain based, ignoring the huge off-chain users in traditional games.

Based on this situation, YeehaGames has a more comprehensive and scientific solution.

YeehaGames is an incubation platform for GameFi projects. It not only provides "Blockchainization" solution support for traditional games, but also provides integration of off-chain resources for on-chain GameFi projects. The purpose is to connect on-chain and off-chain to provide GameFi with more possibilities.

The "Blockchainization" of traditional games can solve the three major pain points in traditional games:

The P2E concept will be deeply rooted players’ mind

In traditional games, it is difficult to systemize boosting or gold farming. Only a small part of the revenue share of blockchain games will be attributed to the developer's revenue. For example, in 2020, Roblox's developers share was only 17.5%; while the Axie Infinity agreement stipulates that the commission ratio is only 4.25%, 95% of the income generated goes to the players. With the arrival of the Web 3.0 era, the X to Earn model has been widely accepted by the crypto projects, and all user behaviors will be supported by value. At that time, the relationship between games and players will no longer be limited to simply "payment - game experience", and players who enjoy great autonomy will be more active in the game.

In-game asset ownership verification:

The inability to openly/freely trade accounts and in-game items, the inability to enjoy account ownership, and the fact that the account no longer has value after a game stopped operating, has always been a problem that traditional games cannot get rid of. The emergence of blockchain games just hit the pain point of traditional games. Through NFTs and other asset ownership verification methods, the player's asset ownership is firmly bound to the player's own hands, thus ensuring that the player's investment in the game will not be worthless due to the end of the game’s operation.

Blockchain is more conducive to the control of the total amount of game resources:

Compared with traditional games, taking card games as an example, most game manufacturers will try their best to launch newer/good-looking character cards and stronger promotions to drive up the payment rate. However, this usually breaks the current level of in-game character balance. Such an increase in intensity will lead to a higher difficulty to the later stage of a game, since most of the income comes from the first month, and the later stage growth will be weakened.

The blockchain games have certain restrictions on the total amount of resources in the game, and under the P2E mode, any character (NFT) of any attribute has a certain investment return. Players don’t have to worry about losing effectiveness of their old characters every time a new patch goes live with the new characters.

At the same time, through the connection between on-chain and off-chain, it can also bring more benefits to the majority of on-chain games:

The emergence of a large number of potential users:

According to DappRadar data, at present, the number of daily active players on GameFi remains between 1 million and 2 million, while the number of global game users is as high as 3 billion. Although there is a high requirement for entry to convert the gamers to GameFi players, the huge difference also fully shows that GameFi has extremely broad user potential.

At present, the player groups of traditional game players and GameFi players have a low degree of overlap, which means that the two player groups do not have much interest in each other's games. But by connecting the on-chain and off-chain games, the It is very likely that the user groups of both parties will be brought together.

Taking into account the needs of differentiated groups:

Different game players may have different needs. For example, people in developing countries tend to earn money in games; people in more developed countries often use games as entertainment and social channels, and have higher requirements for the quality of gameplay. The game earning effect is not paid much attention to, and they are even willing to pay for high-quality games.

Through “Blockchainization”, games, which combine multiple advantages on-chain and off-chain, can take into account the needs of groups of diversity.

Improvement of game experience:

In the real world, the games and entertainment of Web2 have reached a relatively advanced level; while the blockchain games in the metaverse scene, if they still stay in simple cards, battles, treasure hunts, and pet development logic, they may lack continuous appeal to a larger audience. At the same time, the introduction and integration of widely used technologies such as AI/VR should not be just using wallets to log in, and blockchain games should enrich the technical input of games. And there are new explorations and innovations in scenarios such as the Metaverse.

For traditional games, YeehaGames can: provide "Blockchainization" solutions; help design economic models; connect on-chain resources. For on-chain games, YeehaGames can: match off-chain resources; optimize game technology and enrich game experience.

The End

As mentioned in the article, the number of players in the current GameFi products is far from the total number of global players of traditional games. But this also reveals the huge potential contained in GameFi itself.

Since 2018, blockchain games have experienced a wave of momentum. But from the current development status, even if blockchain games have already achieved certain development results, it is still in its infancy and cannot support the new revolution for the overall game industry. Gradually, GameFi, as an important carrier of the both blockchain and traditional games, will surely usher in its own golden era, and in between, what GameFi needs to do is to improve itself.