Do any of you remember when everybody predicted that blockchain gaming would become mainstream? Everybody seemed to be on board with that idea some time ago. Blockchain arts, which exclusively came from the NFT (non-fungible token) world, was also prophesied to make a wave because NFT represents uniqueness and rarity.
However, these two never really took off in the crypto space. In fact, people quickly forgot about them. With the rise of IEOs in 2019 and then DeFi projects in 2020, most crypto traders started to look elsewhere and not really interested in blockchain gaming and arts. But out of nowhere, suddenly, the discussion about cryptocurrency gaming and arts started to come back in late 2020, and people started to talk about mixing the concept of these NFTs with the currently popular DeFi protocols, especially since September’s correction month. So, where are this blockchain gaming and arts nowadays?
Yield Farming Is Great But Not Sustainable
So, as we all know, the middle of 2020 was a very great year for DeFi protocols. The yield farming concept suddenly became mainstream with COMP, YFI, UNI, and SUSHI all taking the center stages in the crypto space. Yield farmers who entered very early and dumped at the top became rich out of nowhere.
However, we all know that this yield farming concept is never sustainable, as the protocols can easily print a lot of money out of nowhere, and when the token price is very high, the whales would just withdraw these newly printed tokens and dump them. Repeat it again the next day until it’s no longer profitable, and they will leave to find greener pasture on other protocols.
That’s why when the month of September came, these same DeFi projects were dumped the most by crypto whales. They don’t want to take too much risk and rightfully so. The crypto space which previously embraced the concept of deflationary, would not be too kind to hyperinflated tokens like yield farming coins.
Blockchain Gaming And Arts With DeFi Features
This is why the crypto experts and analysts started to think of new kinds of blockchain projects that can sustain the long-term prospect of DeFi. Instead of just staking UNI LP tokens, they want to keep the traders’ interest at heart. This is how blockchain gaming and arts become popular again.
The concept of CryptoKitties mixed with DeFi suddenly became popular. Dego Finance, Rarible, Aavegotchi suddenly are sought by the always-hungry yield farmers. Whether they can become as mainstream as Uniswap or SushiSwap, we will never know. But we know the demand is rising for NFT-DeFi marriage concepts.
Even Binance started to take notice of this trend and that’s why they have been investing in NFT assets inside Decentraland, which is basically a VR game put on the blockchain. While Decentraland doesn’t have a DeFi element yet on top of its game, we can obviously say they enjoy the rise to popularity after the recent conversations about NFT/DeFi combo on many crypto mainstream media.
Is This What The Future Looks Like?
Everybody can agree that DeFi is fundamentally strong as compared to the ICO days back in late 2017. Unlike CeFi (centralized finance), DeFi decentralizes and liberalizes a lot of financial aspects in our society. There’s no centralized third parties like banks that you have to trust. However, the hyperinflated rewards of DeFi or yield farming tokens have made the idea of DeFi not really that sustainable.
That’s why the idea of having activities like those you can find on blockchain gaming and arts are probably the answer to DeFi sustainability. The sense of owning something unique and rare inside one DeFi protocol is what might be able to attract yield farmers to something more long-term. Just look at how Satoshi Nakamoto NFT was successfully sold for more than 100 ETH on Dego Finance protocol (which is not even that mainstream compared to YFI or Uniswap or SushiSwap). If this is what the future of crypto looks like, it’s actually really cool. Everybody knows blockchain gaming has huge potential for it to really take off.