The Onset of DeFi in the Gaming Industry

Meghna Das  |  Jul 29, 2021

The open, permissionless, seamless decentralized system built on blockchains like Bitcoin and Ethereum — we are talking about the DeFi universe here. The DeFi industry has been growing swiftly over the past few years and has piqued the interest of investors and technologists globally. The Binance Academy defines DeFi as the “movement that promotes the use of decentralized networks and open-source software to create multiple types of financial services and products.”

Currently, the total value locked in the DeFi industry is $66.08 billion. This number talks about the popularity and acceptance this space has received over the past year. The purpose of DeFi is to “develop and operate financial decentralized applications (dApps) on top of a transparent and trustless framework.” And it is not just the finance industry that has witnessed the potential of Decentralized Finance (DeFi). Interestingly, the gaming industry is reaching places with the amalgamation of DeFi into it. 

Blockchain Gaming Will Harvest the Rewards

One of the biggest benefactors of this DeFi development will undoubtedly be blockchain gaming — a space with great potential to introduce new forms of value for the already familiar and curious gaming world. At present, there are more than 2 billion gamers across the globe, and gaming remains one of the most immersive industries today. Moreover, due to the COVID-19 crawling its effects on every economy, millions of people have been confined to their homes and this has propelled the gaming industry. 

Having said that, it is quite clear that gaming itself is an emerging and popular industry. The more addictive a game is, the more money a gamer is ready to invest in it. And DeFi makes it better as it allows you to earn while playing the game. In addition, DeFi offers gamers a novel method of recompense through blockchain-based tokens and various other rewards powered by impressive arms of decentralized algorithms.

Blockchain or the DeFi gaming industry is new, and it is still finding its feet. However, the adoption of DeFi mechanisms in gaming protocols is increasing rapidly. It is widely being accepted not just in the crypto industry but throughout the world. And this is sure to propel further by the current success of the broader DeFi industry, which gives it a unique upper hand in appealing to gamers.

DeFi and Gaming: How the Two Co-Exists

The distinction between assets utilized solely in games and financial assets is eroding, allowing the emergence of a new asset class. People used to think of in-game assets as a digital currency with no actual value, but today they're seen as legitimate financial assets. 

Both in-game players and investors will use these new, limited in-game assets as financial instruments. DeFi's mechanics allow blockchain games to provide players with a variety of ways to make it worthwhile for them to play and receive rewards. This increased ubiquity of monetary rewards has piqued people's interest. Collectible and trading games are among the most popular blockchain genres, thanks to the ability to purchase, sell, and exchange unique tokens and assets. With games increasingly generating and issuing their native tokens, developers may essentially build their economies and ecosystems and connect through them, in most cases across platforms.

The utility and value of these tokens and NFTs will ultimately determine their success, which is why an increasing number of blockchain games are employing DeFi principles to increase the liquidity of such tokens.

Another benefit of DeFi for gaming is the opportunity for players to make passive revenue by staking collectibles or other assets they've previously accumulated in the game to liquidity pools. One of the numerous ways DeFi’s mechanics reward gamers beyond the means of traditional, non-blockchain-based games is by agreeing to offer liquidity in the ecosystem.

Top Gaming Tokens

DeFi and blockchain technology have made it possible for game designers to assign a certain asset to a certain player. Players can use, sell, or trade their tokens for these products in any way they desire. The more time players spend playing a game, the more valuable the resources become. Given below are some top DeFi gaming tokens that have shown the most success rate this year. 

Axie Infinity (AXS)

Axie Infinity is a video game that allows players to collect, breed, raise battles, and trade token-based creatures known as Axies. Each Axie is a unique non-fungible token (NFT) with unique characteristics and abilities. These Axies can be pitted against one another in 3-vs-3 combat, with the winning side collecting more experience points, which can be used to improve an Axie's stats or evolve their body parts. 

Axie Infinity Shards are the unique governance token for the Axie Infinity ecosystem (AXS). These will offer holders a say in how money in the Axie Community Treasury is spent and utilized to participate in critical governance decisions.

Players were able to stake their AXS to receive weekly incentives, which started in 2021. These prizes began largely to encourage user development and eventually decrease as Axie Infinity matured. Staking awards from AXS are held in escrow for a year when claimed, after which they can be vested. The token is currently trading at $43.66 at the time of writing. 

Enjin Coin (ENJ)

Enjin Coin is a project of Enjin, a corporation that offers a blockchain-based gaming environment with interconnected products. The Enjin Network is Enjin's flagship product, a social gaming platform that allows users to build websites and clans, communicate, and run virtual item stores. Enjin allows game producers to use the Ethereum blockchain to tokenize in-game assets. It backs digital assets issued on its platform with Enjin Coin, an ERC-20 token, allowing them to be purchased, sold, and exchanged with real-world money.

Enjin Coin mints new, unique fungible, or non-fungible ERC-1155 tokens through a sequence of smart contracts to which game creators send ENJ. These tokens can be traded or exchanged for ENJ at any moment on the Enjin Marketplace. More ENJ gets taken from the ecosystem as more custom tokens are produced, making it scarcer. ENJ Token is currently trading at $1.44 at the time of writing. 

The Sandbox (SAND)

The Sandbox is a virtual environment on the Ethereum blockchain where users may create, control, and sell their game experiences using SAND, the platform's utility token. With The Sandbox Game Maker, players may build digital assets as NFTs, publish them to the marketplace, sell and buy them, and then drag-and-drop them to create game experiences. 

The Sandbox intends to introduce blockchain into mainstream gaming by providing true ownership, digital scarcity, monetization capabilities, and interoperability to both crypto and non-crypto game players. In August 2020, the SAND token went on sale on the Binance Launchpad, the entire offering was sold in seven days. Holders of the SAND ERC-20 token can use it to participate in the platform's governance and conduct all transactions inside the ecosystem. The token is currently trading at $0.6642


This DeFi-based gaming industry still has a long way to go. And it is not just blockchain and new technologies that are helping the gaming industry to grow. It is a two-way road. Gaming is proving to be one of the main fields of application in the blockchain industry. In fact, the gaming business has gained a new dimension with the introduction of play-to-earn. It piqued the interest of gamers and investors all over the world, who want to partake in the value of this massive sector thanks to blockchain's decentralized benefits.

Related News