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The internet has been a catalyst for radical change throughout its evolutionary journey, touching all aspects of our lives. Web 2.0, for its part, has introduced several unprecedented avenues for financial innovation on a global scale.
Gig savings have been one of its biggest contributions. From taxi reservations to in-home massages and freelance job opportunities, everything is now seamlessly accessible with just one click. So much so that by 2023, the total valuation of gig savings is expected to reach $ 455 billion. And through it all, Web 2.0 is continually providing jobs for people with diverse skills and experience.
However, the internet is rapidly moving to the next phase of innovation.thanks to the emergence of web 3.0. For this reason, what was unimaginable to most people is no longer so. as a means of subsistence, for example. In the entertainment world, the gaming industry is large and has been for some time.
Currently worth $ 178 billion, the global market valuation of traditional games is expected to reach $ 268 billion by 2025. And it is, among many others, a market that web 3.0 can potentially disrupt, completely transforming the relationship between gamers, games, and game developers. .
Ongoing innovations in blockchain technology, cryptography and tokenization have a crucial role to play in this regard. Web 3.0 fosters new economic opportunities, in addition to striving for decentralization and community orientation.
To do this, it relies heavily on the burgeoning blockchain and cryptocurrency industry, which has a current market cap of over $ 2.5 trillion. Non-fungible or NFT tokens are a product of this industry and when it comes to digital games they have huge implications and reach.
In-game assets can now represent real monetary value, and in-game worlds are no longer just collections of intangible fighters, weapons, racing cars, and the like. Game finance or GameFi is emerging as a viable economic alternative, especially in markets devoid of the excesses of conventional finance.
Southeast Asia, in particular, has emerged as the breeding ground for GameFi ecosystems, which are of tremendous importance to the global business landscape. But what makes this region a perfect incubator for GameFi?
Against uncertainty, inflation and corruptionthe stabilizing effect of GameFi
The economies of Southeast Asia are for the most part fragile, increasingly succumbing to the dominance of the US dollar, British pound or other First World currency. In addition, inflation is rampant in these regions, particularly in the Philippines, Thailand and Vietnam.
Global economic shutdowns due to Covid-19 have further compounded the problem. In the past two years, more than 81 million people have lost their jobs in Asia-Pacific. To make matters worse, there are serious financial inequalities. In Thailand, for example, the ultra-richconstituting 1% of the total population controls over 58% of the nation’s wealth and resources. And above all, corruption is rampant in the ASEAN region, where countries have appalling Corruption Perception Index scores.
As a result, disadvantaged communities in the region are looking for alternative livelihoods and economic models. GameFi provides an answer, especially in the post-pandemic scenario. As people remained locked in their homes, deprived of conventional means of income and livelihood, innovative play to win (P2E) games seized the opportunity.
For example, titles like My DeFi Pet have earned gamers daily income and have become more than just ways to kill time. At the height of the pandemic, the majority of active P2E gaming players were from Southeast Asia.
Because they could earn US dollars, players had additional incentives to be serious about honing their skills. The positive reviews empowered local youth, who were able to earn $ 1,200 per monththat too from one game. And as money transfer accounts became largely inaccessible during the pandemic, GameFi was a legitimate source of family income for many.
In addition, the emergence of organizations like Yield Guild Games (YGG) has strengthened GameFi’s prospects. To participate in P2E games, players must have access to in-game NFTs, which some people cannot afford. YYG compensates for this limitation by offering community support and scholarships to promising players. Leasing of metaverse related assets is also possible, which adds another dimension to their economy.
Tech-savvy but unbankedfuture financial inclusion
Large sections of ASEAN’s youth are very tech savvy, which is a big reason for the adoption of GameFi. Over 90% of the region’s 213 million young people have accessed mobile internet in recent years. But at the same time, there are nearly 290 million unbanked people in Southeast Asia, which means that only 18% of its population has access to conventional financial instruments.
GameFi caters to those stuck in this limbo, while related blockchain-based solutions give them access to digital wallets and borderless payments. Financial services such as lending, borrowing and insurance have also become more inclusive than traditionallyadding to GameFi’s overall value proposition.
Additionally, GameFi brings liquidity to game assets, providing real utility and enabling off-chain transactions. This means that players have several options for using their gaming assets in an offline setting. Players can choose to split their assets and mine them in DeFi protocols.
Others could use them as collateral against loans or trade them in secondary and derivatives markets. Arguably, GameFi unleashes the previously untapped potential of game assets, something that was unattainable in the traditional gaming space.
To conclude, it is imperative to underline the leading role of Vietnam in the evolution of GameFi. Axie Infinity, GameFi’s most popular offering, is a Vietnamese product. What’s more, the underlying technology is also superior to regular blockchains, with instant block confirmation, negligible transaction fees, and over ten thousand transactions per second.
Tri Pham, co-founder of KardiaChain, is convinced that blockchain will be a pillar of the future society of humanity. He has launched several initiatives contributing to the massive adoption of blockchain, from infrastructure layers like KardiaChain to application layer games like Mytheria and Thetan Arena. KardiaChain is the national blockchain in Vietnam, while My DeFi Pet was the most played game on Binance Smart Chain during the GameFi 2021 peak.
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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high risk investments in Bitcoin, cryptocurrency, or digital assets. Please note that your transfers and transactions are at your own risk and that any loss you may incur is your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in Affiliate Marketing.
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