New play-to-earn games have given rise to the GameFi industry, allowing players to earn cryptocurrency just by playing games. Yes, you heard that right! Play-to-earn games are providing gamers with opportunities to earn cryptocurrency, as well as own pieces of the game itself through the use of non-fungible tokens (NFTs), which usually take the form of in-game characters, lands, wearables, and more.
Not only are these blockchain-based games revolutionizing the world of gaming, but they have directly influenced the way gaming communities operate. Teamwork has been a key component of traditional online gaming, and classic in-game guilds were popularized with the rise of massively multiplayer online role-playing games (MMORPG). Guilds, in their original sense, were informal associations of gamers that would work together on raids, battles, and other missions in order to gain a competitive edge.
Games like World of Warcraft are well known for guilds that bring together competitive players in order to take on the toughest bosses and battles. These groups of players work together to support each other, obtain rare items and armor, and ultimately build a flourishing community. Some of these guilds and clans were influential enough to become widely known by their respective gaming community. In fact, the name “Method” — an influential esports organization — could strike fear in many WoW players’ hearts.
While traditional gaming guilds provide players with a support system and competitive edge in battle, play-to-earn guilds are taking the concept one step further by directly influencing players’ bottom-line earnings.
What Is a GameFi Guild?
Much like their traditional counterparts, GameFi guilds are an organized group of gamers that often work together in-game to complete missions. Though, whereas traditional guilds solely served as a community, GameFi guilds add monetary value to a player’s gaming experience, which is done primarily through two means.
The Rise of DAOs
First, these organizations are often organized into decentralized autonomous organizations (“DAOs”), which are blockchain-based companies governed by a native cryptocurrency token. Holders of the token can vote on matters related to the DAO; in the case of guilds, votes often relate to games that the guild will play and other important manners. These organizations are composed of players, managers, and the gaming guild treasury, and these roles all take shares of gaming profits.
In-Game Asset Lending
In addition, these organizations also own a large collection of in-game assets that can be lent to players in exchange for a portion of their earnings, also known as the rent-to-earn model. This allows players to gain access to expensive NFTs that are required to play a game — and might otherwise take a considerable amount of time to collect on their own or form an expensive barrier to entry for certain games. These players can then play the game with the new NFTs in exchange for a percentage of what they earn in-game.
Which Issues Do GameFi Guilds Solve?
Many play-to-earn games require the purchase or minting of NFTs before playing, and, as these games grow in popularity, so too does the cost to play.
Popular play-to-earn game Axie Infinity, for example, requires new players to have at least three different Axies to begin playing. Axies are Pokemon-esque character NFTs in the Axie universe, and they are typically purchased or bred by players. While they could be acquired for very little cost in the early days of the game, due to Axie Infinity’s popularity as of December 2021, new players have to shell out nearly $300 for just a few starter Axies.
That’s a lot of money to fork out for just a starter team in a new game — and this is precisely the challenge that guilds aim to solve. Guilds connect investors and players together to the benefit of both. Investors looking to cash in on play-to-earn games can purchase NFTs and other in-game assets. Should NFT holders not have the time or desire to play, or they simply do not have the need for a particular set of assets anymore, they can lend these NFTs to gamers through guilds and continue to realize their full earnings’ potential.
Similarly, most prospective players are unlikely to pay $300 to gain entry into a game. Instead, newcomers can borrow assets from a guild through a “scholarship.” This simply means that players are being lent certain character or item NFTs for in-game use.
That is not to say that there is no cost for scholars to rent NFTs from guilds, though. First, players are typically required to pay a certain percentage of their future earnings to the guild in return for these NFTs. In addition, certain games enable players to ‘level up’ their NFTs in-game, which thereby improves the earning potential of these assets. In this case, a ‘scholar’ may spend a considerable amount of time playing and improving a rented NFT, just to return it when they no longer need it. This creates a double win for the guilds that obtain future income streams while compounding a portfolio of more powerful assets through the NFT rental.
Guild Limitations and Kyoko.Finance
While play-to-earn games have unlocked a world of opportunity for a new class of professional gaming, the emerging industry is still in its infancy. Play-to-earn games have yet to reach interoperability, and the blockchains that host these games are largely independent of each other. Transferring NFTs across ‘gamechains’ is not typically feasible, which leads to siloed in-game assets and guilds that are often limited to games on the particular blockchain that they initially focused on.
Kyoko.Finance solves this problem by offering a cross-chain asset lending platform. On the Kyoko platform, guilds and players can collateralize cryptocurrency to borrow against it for NFTs across different gamechains. Meanwhile, guilds and players can list NFTs on the Kyoko platform to realize the earnings potential of their unused assets. This allows guilds to expand beyond a single game or gamechain while supporting players’ investment across various play-to-earn games. Guilds can also qualify for unsecured credit loans through Kyoko’s guild-to-guild lending protocol, which helps guilds obtain the financing they need to expand to new gamechains or grow operations.
GameFi Guilds — Community or Cash Machine?
The play-to-earn trend has introduced plenty of new opportunities for gamers and crypto-enthusiasts. While these opportunities can be quite lucrative, players that failed to get in early will likely have to pay a pretty penny to join the fun. GameFi guilds are a natural presence in this ecosystem given their solution to the skyrocketing cost of entry and ability to expand GameFi access to newcomers.
Through guilds, investors can take advantage of the earnings potential of play-to-earn gaming, while players can skip the high price tags and get straight into doing what they love: gaming.
About Kyoko
Kyoko.Finance is a cross-chain GameFi NFT lending market for guilds and players. Kyoko’s Guild-to-Guild lending, P2P NFT lending, and cross-chain asset lending platform aims to solve the most pressing issues challenging the GameFi market, including the rising cost of entry and siloed in-game assets across different blockchains. Kyoko’s metaverse will also allow Guilds to display their history, progress, and other accomplishments, while players can connect with others in a world that can be built in, developed, and sold off.
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