As the entire world enters yet another period of enforced lockdown measures on the back of yet another wave of Covid-19 variants wreaking havoc on society and the global economy, the gaming industry continues to grow at pace.
Digital living has never been more important, and gaming, as an industry, sees yet another period of increased growth as more people take to the online world for modern experiences.
Blockchain gaming itself has emerged as the most exciting sector, namely, games that run on a blockchain network using either a completely or partially distributed ledger architecture (with Ethereum being the leader). Players are flocking to them, particularly games that use tokenized cryptocurrency and non-fungible tokens (NFT) that for the first time, provide players a way to verify ownership of the virtual products used by the games they play.
Playing to Earn
The global phenomenon that is crypto already marks a revolutionary tech in gaming, introducing player participation in gaming revenue generation, giving rise to the terminology “Play to Earn” (P2E) in games where players are rewarded with crypto tokens including NFTs for the time invested in games.
The crypto can be used to buy and trade in-game products, cosmetics like skins and accessories, unlock characters and levels, and now, breed more unique items and characters. Players strive to produce the rarest items and breeds, selling them for profit.
This alone showed us already the immense value created by blockchain game tokens and NFTs, with more and more players buying up crypto, and trading NFTs for ever-increasing prices.
Hitting a glass ceiling
However, the main issue with NFTs right now is the fact that they are limited in what they can do. Right now, the majority of P2E games that churn out NFTs are struggling to find a wider audience and create bigger demand, mainly because NFTs can’t really do much other than offer an unsustainable collectibility value.
NFTs right now are static and lifeless. Yes, they do have features and attributes that make them completely unique from each other, but this just means people and gamers can show off items, skins, or characters that are “rare”. Essentially, it’s become a race towards being one of the few to own a limited edition of something.
But the “I have it and no one else does” factor is already beginning to wear thin, even among the die-hard fans of NFT collectors and collectible enthusiasts.
According to Golem network advisor Maria Paula Fernandes, this is because the emotional side that makes an asset valuable is subjective, and most NFT projects don’t actually have that emotional attachment for its users. She gives the example of the Pepe the Frog meme:
“Pepe the Frog was claimed by the alt-right, whose creator sold the NFT and regained his work… NFTs finally allowed these creators to acquire meme rights and rewards.”
But for many new projects, their NFTs don’t have the multiple layers of story, community, and hidden meaning (again, all very subjective). And when those values are lacking, NFTs can be very hard to sell.
If there is a lesson to be learned, one should only look at one of the most popular collectibles in the NBA Top Shot NFT collection. As one of the most popular global sports franchises, these basketball-themed NFTs generated incredible sales as people sought to collect the rarest “moments” of basketball fame immortalized in NFTs.
In February and March last year, the demand was so high that the platform had numerous crashes and sold out within seconds of every launch of limited card packs, even later forcing users to sign up via waiting lists and guaranteed buy events as automated bots found a way to buy out every new card pack.
But in the following months, demand dropped. From a peak of about $200 million in March, sales dropped every month after.
The reason? Less interest as people finally realized there was really nothing much you could do with these NFTs except to show them off, and if the NBA kept releasing more, how rare were the ones you had?
Price was the most tell-tale sign that people no longer valued these collectibles as much, with the average sale price plummeting from over $180 in 2021 March to just $19. So much for rarity value, right?
Getting gamers to derive more value from NFTs
For us at Cradles, the answer to deriving more value beyond a static and subjective evaluation of NFTs is pretty straightforward. Give NFTs objective, intrinsic gaming value by making it a utility token as well, and you give gamers a reason to want those tokens.
So this is the entire thinking behind our new proposal for a new breed of NFTs. NFTs that are not just lifeless static things to show off, but also tokens that serve actual functions that can enrich a game’s experiences and content.
Imagine if players in a blockchain game could:
- customize their items and characters freely, using building blocks of attributes that themselves are tokens. This means unlimited combinations of items and creations that you could sell on, exchange, or use for new experiences.
- interact with game environments and items that continuously evolve according to block time, as a method to measure and increase entropy in a metaverse just like in the real world.
This is what our modular NFTs aim to do in Cradles. Allow unlimited possibilities for the player, and implement a metaverse that actually lived and breathed as it would in real life.
Now imagine what kind of demand that kind of NFT would bring and the new value to blockchain games they would create?
You imagine it, we’re building it.
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