Cronos

<ul><li>Ever since its genesis, GameFi has carved out a unique and revolutionary portion within both blockchain and gaming industries</li><li>In light of the current bearish market however, support for GameFi has fallen, with 89% of crypto investors worldwide suffering drawdowns of profit in the last 6 months</li><li>Building towards the future is still important however, as Ken Timsit says, as further work is still needed to formulate sustainable tokenomic models and reliable DAOs</li></ul>GameFi has long been seen as the ideal paragon for advanced living. The ability to earn money while enjoying the adrenaline rush of playing a competitive game and being a part of a vibrant game community was an aspiration that many, especially gamers, held on to, both in their formative years and beyond. First coined in 2020 by Andre Cronje, CEO of Yearn Finance, the term combines the words ‘game’ and ‘finance’, and involves blockchain games that offer economic rewards to players. Hours spent by completing tasks such as competing with other players or progressing through the game are rewarded with in-game assets such as crypto tokens, NFTs, and even plots of virtual land.Indeed, one of the stand-out features of GameFi that draws users and gamers alike to it is ownership over one’s assets. Where data ranging from account profiles and statistics to player inventories and achievements of gamers were once strictly stored on centralized servers owned by game companies, GameFi allows its players to truly own their assets without storing them on a separate server owned by the game company.With the help of blockchain technology, GameFi users are able to oversee the management of their in-game assets wholly on their own accord – which could mean the world especially when considering how traditional web2 games are often at the mercy of the game companies that produced them. If a developer decides to shut down a particular server or remove access to the game from a certain region, gone are the players’ items and rewards.Yet for all the allure of GameFi, it is undeniable that the bear market has certainly been rough on the industry. According to statistics by Chainplay this year, 89% of crypto investors worldwide saw their GameFi profits decrease in the last 6 months, with 62% of them losing more than a staggering 50% of their profits. Additionally, 73% of respondents were averse to GameFi investments for fear of rug pulls and pyramid schemes.To find out more about the reality behind this industry, we spoke with Ken Timsit, the Head of Cronos Labs, the team behind Cronos chain – an Ethereum Virtual Machine (EVM) - compatible blockchain backed by Crypto.com, that focuses on Decentralized Finance (DeFi) and blockchain games.“First of all, it’s important to highlight the fact that we are not just in a crypto bear market, but a global economic downturn,” he says. “Not everyone should expect to earn just by playing. If you’re a user on GameFi, you should play primarily for entertainment.”NFTs and Web3 games form a primary pillar in Cronos’ operations, and the company focuses on providing real in-game utility to NFTs belonging to gamers. Cronos boasts several game titles under its accelerator program, such as “White Forest”, “The New Resistance”, and “D.G Pals”. Just this October, the company organized a Metaverse hackathon which saw over 1,000 developers participate in brainstorming activities for new game applications to be deployed on Cronos.For many, GameFi was seen as a lucrative way to capitalize on their gaming time. At one point, players on popular GameFi platform “Axie Infinity” were even earning upwards of $600 a month. However, a bridge exploit, coupled with over-speculation of the game’s native token, Smooth Love Potion (SLP), led the game to a steady decline in recent times.“The earlier Web3 games had a token economy that was too simplistic and assumed that later players would pay for the gains of earlier players and that everyone would just make money simply by playing,” Ken observes. <img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/9c012755d4c94abaad6be88d5cb4131c.png" /> Coinlive&#39;s interview with Ken Timsit, Head of Cronos Labs The same logic applies similarly for DeFi protocols, he says. Successful projects owed a part to early adopters, such as those who provided liquidity to get the engine going initially.<blockquote>“Now that these short-term gains are further on the horizon, or are unlikely to occur again in the near future, Defi protocols have to think about making their tokenomics more sustainable,”</blockquote>Just as Ken says, building sustainable tokenomics is now more important than ever. Having too low a token value would result in fewer new users, but having high token prices may lead to uncontrollable sell-offs as seen in slash-and-burn events.“Players in GameFi usually earn because they are early adopters, but we want to ensure that gamers who have performed well in the game, such as winning tournaments or contributing to the game meaningfully can also earn as well,” Ken says.Mark Lee, the CFO of GameFi project Monsta Infinite, echoes his sentiments as well.“A sustainable GameFi project needs to strike a balance between token inflation and deflation,” he says. “Healthy tokenomics reward the most hardworking players, as opposed to just early adopters.”Yet even with healthy tokenomics, GameFi projects have also suffered from a lack of successful moderation – racism, hate speech and toxic behavior often run rampant in these platforms, particularly due to their decentralized nature. Decentralized Autonomous Organizations, or DAOs, are what typically come into attention here.DAOs are systems of governance that operate using smart contracts and code, and are meant to reflect the intent and will of the userbase. However, many have still criticized DAOs to be unable to handle contingencies and unforeseen consequences due to the complex nature of the organization. For now, DAOs are mostly capable of simple code-appropriate tasks such as bookkeeping, polls, and on-chain asset management.“While DAOs can be effective in terms of establishing strategic orientations and community principles, DAOs still need to delegate operational activities and responsibilities to the sub-committees and sub-groups that they are overseeing,” Ken says in agreement. “Effectively, the DAO is only going to be as effective as the group of people of who have been entrusted by the DAO to manage those key operations.”However, Ken remains confident that with time, DAOs and management of GameFi projects will improve in the future as their economies and userbase grow.“We can expect that as they [GameFi projects] become wealthier and more successful, DAOs will be able to entrust those key operation to more experienced operators,” he says as we close off the interview. “But right now, many community members are still learning and building the plane as they are flying it.”This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.

[Coinlive Talk] Forging Ahead: Hopes for a Sustainable GameFi Future

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