To understand GameFi 2.0, we first have to look under the hood of GameFi 1.0 and why GameFi 2.0 came to be.
1.1 What is GameFi 1.0?
As the name implies, GameFi is the integration of gaming with DeFi, or decentralized finance. GameFi originated with the Play to Earn gaming mechanics and was brought to the mainstream by the breakout title Axie Infinity. In simple terms, it uses the non-fungibility of NFTs to turn game assets into encrypted assets, and transfers ownership of these assets from traditional, centralized gaming companies into the hands of the users. GameFi also uses Play to Earn economics to rapidly attract new users.
1.2 What was the problem with GameFi 1.0?
GameFi 1.0 enjoyed rapid growth in the second half of 2021 as cryptogame titles such as Axie Infinity, Alien World, MBOX and Cryptoblades grew their profits and userbases. GameFi games based on Play to Earn ballooned rapidly, but they came with a problem. Play to Earn is a double-edged sword: speculators lured in by quick profits join early on, only to jump to other games once profits begin to dry up. These players were never loyal to any GameFi projects to begin with, and since most GameFi projects emphasize earning over gaming, the market is flooded with short-lived and quickly-produced products. GameFi is popular because of high earnings, so when the earnings plummet, it follows suit. The number of GameFi projects on the market has rapidly expanded, but the userbase has been unable to keep up. It comes to a dilemma in which supply far outpaces demand, and earnings rapidly decline. Low earnings result in user turnover, which in turn leads to lower earnings, and the cycle repeats.
1.3 The GameFi 2.0?
GameFi 2.0 is a solution to the problems currently faced by GameFi. It strengthens the “game” aspect of GameFi to ensure project survival and utilizes DAO to resolve the problem of game update behavior that damages the user’s game assets due to the revenue orientation of traditional Gamefi products. In addition, GameFi 2.0 uses the decentralized storage of the blockchain to ensure the permanent continuity of GameFi projects. Even if a project’s leadership disbands, project enthusiasts can continue to update and maintain the project for as long as market needs.
What kind of GameFi project is Swords & Dungeons?
In simple terms, Swords & Dungeons is a battle chess MMORPG that builds off of existing technology to provide the best possible GameFi gaming experience. It also revolutionizes earning mechanisms to provide maximum compatibility between “game” and “earn” to satisfy different types of GameFi 2.0 users.
Basic User Gameplay: Play to Earn is the main type of play for basic users. Users can perform daily mining to receive fixed token earnings, and then sell tokens in secondary markets for a profit. Ideal for: Loyal Play to Earn users and those who play solely for earnings.
Intermediate User Gameplay: Play to Enjoy, Enjoy to Earn. Intermediate users can take advantage of character attributes and battle gear to earn NFT and token assets via PvE and PvP gameplay. After earning, players can choose to sell assets in secondary markets or strengthen themselves to challenge more powerful enemies. This play style allows players to earn while having fun gaming. Ideal for: loyal gamers and Play to Earn users who wish to earn while having fun.
Advanced User Gameplay: Play to Govern, Govern to Earn, Govern go Fight. Advanced users can establish their own kingdoms and purchase tokens from basic users to perform kingdom maintenance and upgrades. By improving their kingdoms, advanced players will attract more basic and intermediate users into their kingdoms, which in turn will increase their tax revenue and kingdom power. Swords & Dungeons also has a Kingdom War mode in which Kings lead their subjects to compete for valuable game resources on a shared map.
2.2 Gameplay Diversity
Swords & Dungeons provides a complete set of game features, including: gear, mounts, pets, professions, dungeon battles, wilderness battles, arena, world bosses, and more. The gameplay is, to a certain extent, superior to that of most traditional games in a way that maximizes GameFi user retention.
2.3 DAO Integration
As stated in the Swords & Dungeons whitepaper, SWND, the governing Token, will provide feasible governing features. The future game updates, and any changes to key in-game values must be approved by a DAO resolution. In order to build a truly sustainable metaverse concept, the game’s source code will be shared with the DAO to ensure that the DAO can continue to operate and update the game in the event that the current development team disbands.
Why is Swords & Dungeons called a GameFi 2.0 project?
Swords & Dungeons is seen as a GameFi 2.0 project for the following reasons:
Resolves the lack of gameplay issue: Swords & Dungeons solves the lack of gameplay issue that faces current projects in the GameFi sector. In terms of gameplay and playability, Swords & Dungeons stands on equal footing with traditional games.
Resolves the issue of short-sighted Play to Earn economic models: By dividing users into classes, Swords & Dungeons retains the user acquisition of Play to Earn while establishing a complete economic framework built to last for the long-term. Under this framework, the production and consumption of game assets form a mutually-reinforcing virtuous cycle and fully ensure the asset preservation of participating users.
Provides exclusive gameplay for each user class: Swords & Dungeons provides various classes of gameplay to meet the gaming needs of the majority of users. All GameFi enthusiasts can find a playstyle that suits them in Swords & Dungeons.
Provides users with permanent guarantee of in-game assets: Using DAO, Swords & Dungeons will create a complete and sustainable metaverse concept to guarantee that user game assets do not lose value like in projects designed by a centralized dev team.
GameFi 2.0 Outlook
Swords & Dungeons has the greatest potential to create a GameFi 2.0 subsector within the declining GameFi market. This is one project to keep your eye on.