DeFi could be seen as a revolutionary open-source movement that has some implications for NFT gaming. It allows gamers to earn money in a different way with the appearance of new digital assets. Nowadars these assets can be transformed into financial income

But, what is DeFi? What are the benefits involved? What are its implications in NFT and why is it important? We will explore all these questions in this article!

What is DeFi?

Let’s start with the basic concept. Decentralized Finance, also known as DeFi, is an umbrella term comprising all the financial services provided on decentralized systems (public blockchains) and enforced by software (smart contracts). Therefore, through DeFi users can do most of the things traditional banks do but in a faster way and without requiring paperwork or the presence of third parties. With DeFi people can purchase insurance, trade derivatives and assets, earn interest, borrow, lend and send money, and much more.

Is also a global financial system that operates via peer-to-peer. In other words, there is a direct interaction between two people, an interaction that does not require being routed through a centralized system. This allows interactions to be pseudonymous and transparent as it is open to all users on the platform. 

Users can engage with DeFi through defi applications or decentralized apps also known as << dapps >>. Most of these Dapps run on the Ethereum blockchain. Do not require people to open an account or make an application to engage with DeFi, unlike traditional banks.

Benefits

Undoubtedly, it has become a revolutionary way to do finance. It challenges the traditional operations of global institutions, government agencies, and Wall Street banks. And, it is not insignificant sinceit offers unique opportunities and benefits such as the following: 

    • Offers flexibility: Users can move their assets without requiring approvals from third parties. They can do it any time and anywhere in the world as long as they have an internet connection. This eliminates the payment of expensive fees and having to wait a long time for these transfers.
    • It is faster than traditional financial systems: There are instant updates that can go as rapidly as every 15 seconds. This allows users to be always up-to-date with the latest interest rates and rewards. Also, it must be mentioned that these rewards can be significantly higher than the ones obtained on Wall Street. 
    • It is based on an open-source technology: Users dont have to open an anccount to access the DeFi. They only need to create a wallet.
  • Transparency is achieved: Private organizations rarely offer transparency to their clients in terms of allowing them to see the full set of transactions made by all the users of the network. This is not the case with DeFi, as anyone involved can consult these transactions if they want to. However, the information they access does not compromise the privacy of other users as we are going to see in the following point. 
  • It allows users to be on DeFi pseudonymously: This means that users are not required to provide their personal information to access DeFi. For instance, there is no need to give their names, email addresses, or any other personal data that can compromise them.

“Play to earn” DeFi games: The implications and benefits in gaming

Even though DeFi is a relatively new financial system, the gaming industry is already experiencing the benefits of its development as the new concepts of ‘blockchain gaming’  and ‘play to earn games’ are introducing a new form of value and know-how for the industry. 

It must be noticed that gaming remains one of the most prominent and immersive industries nowadays. It offers gamers a new way of monetary compensation for doing what they love: play. These compensations are given via blockchain-based tokens and other rewards driven by the mechanisms of the decentralized system and blockchain technology.

DeFi games are still finding their feet on the market. Nevertheless, the constant evolution and success of the DeFi mechanisms are appealing to gamers as they open a new asset class. 

Before, people considered in-game assets as digital coins with no value in real life. Nowadays, with DeFi games, these in-game assets could be considered financial assets as play-to-earn videogames offer assets that can be used as financial instruments for both, outside investors and gamers themselves. 

 

NFT gaming

DeFi was created with the pillars of the structure of digital currencies such as Bitcoin. But the concept was expanded until DeFi became the digital alternative to the prominent Wall Street. Although, the main difference between Wall Street and DeFi is that Wall Street has a tangible presence. Meanwhile, DeFi offers a more open, free, and fair financial market because it’s digital. At the end of the day, anyone with an internet connection can have access to DeFi anywhere in the world. 

Now that DeFi has unlocked opportunities for game developers to construct DeFi protocols directly into platforms across various blockchains. The most used is Ethereum because Ethereum-based games offer innovative incentive models. This relates to another point to highlight, DeFi allows game developers and entrepreneurs to create their own native tokens, meaning they can create their economies and ecosystems. 

For instance, in G4AL we have developed our own token named Game Gold Token ($GGT) that can be used to purchase G4AL products and services and you can safely cash your earnings through our G4AL Broker. Pre-book $GGT tokens to get exclusive benefits.

More variety of liquidity pools means players can have more opportunities to trade in-game currency for cryptocurrencies or borrow and lend in-game tokens to other players. In turn, the more capacity gamers will have to earn passive income on collectibles or other digital assets. 

In conclusion, it could be said that DeFi is the fuel of success for NFT gaming. Even though DeFi could experience volatility as it is a new mechanism in the financial sector. Its progress in development is already a point of interest for gamers and game developers. The path could be long, but the future is bright.