With Crypto reaching mainstream adoption across the world, many are wondering which technologies that utilize blockchain are in fact here to stay or rather is speculative nonsense that will diminish in popularity within the coming years. DeFi, for example, holds great promise and actually demonstrates superior capabilities in exchanging value across the world, at a rate significantly more economical and eco-friendlier than its counterpart, legacy finance. However, there are significant problems associated with DeFi that inhibits its ability to completely replace its predecessor, and therefore are at a relative halt until ingenuity can free this industry.
Video Game Monetization Lacks Fairness
On a separate note, video gaming has historically been a fruitful investment, as 2.9 billion people across the globe actively buy and play video games, netting a total of $175.8 billion USD in 2021. But where exactly does this money go? Nearly all of the finances gained from any one video game go directly to the game developers, while the associated gamers gain no monetary rewards for their efforts. This is particularly unfortunate when you think about the fact that these gamers actively assist in refining the quality of the game by essentially testing the intricacies of its infrastructure every time that they play it.
The importance of raising this issue goes back to Blockchain; We now have the technology necessary to allow fair distribution of a game’s monetary value to all players and developers involved. The application to this technological feat is called Play-to-Earn, where the actual in-game items are encoded as NFTs and can therefore be traded and valued as real-world money within any one blockchain ecosystem. What’s more is that the ownership of these NFTs is truly that of the holder, meaning any one player has the full right to price and trade their in-game NFT assets as they see fit.
The Advent of Decentralized Gaming
The idea of tradeable assets and making real-world money within a video game represents the industry known as Decentralized Gaming. While Decentralized Gaming has been in the workings within the crypto-space since as far back as 2018, its mainstream adoption did not occur until the start of July 2021, where eyes turned to Axie Infinity (known as the Bitcoin of Decentralized Gaming) for its extraordinarily high Play-to-Earn potential. Since that time, Axie Infinity’s token raised ~22x and holds a market cap of nearly 8 billion USD. Collectively, the total Decentralized Gaming market cap, as of October 8th, 2021, holds a 16.9 billion market capitalization.
While this market capitalization is impressive considering how young this sector of the crypto-industry is; Is it sustainable, and better yet, is there further room for monetary growth?
From a sustainability standpoint, the fact is that many of these Decentralized Games have replaced jobs held by citizens in developing countries where their work wages and living expenses do not match up appropriately, therefore forcing them to look for alternative options. Decentralized Gaming provides this alternative job, and with that delivers heightened wages through Play-to-Earn, and job security inherently through the collective community ensuring the validation and monetary sustainability of the actual ecosystem. Therefore, with 10s of millions of people across the globe using Decentralized Gaming as a legitimate job avenue, we can assume that this market capitalization is relatively stable.
How Decentralized Gaming Could Potentially Rise Further
Assuming more people in developing countries with this mismatch of wages to living expenses gain the access to the internet, or simply learn about Decentralized Gaming and already has internet access, we can assume that Decentralized Gaming’s market cap will rise from these new influxes of users over time. However, how exactly does the Decentralized Gaming industry absorb some of the conventional gaming’s $175.8 billion annual market cap? The answer is a simple concept, but difficult to actuate on: You must make Decentralized Games that are equivalent, or potentially superior, to conventional games.
This is where the Decentralized Gaming industry has been lacking; Games like Axie Infinity, while rewarding through monetary gains, is comparatively simplistic to conventionally popular games like Call of Duty or League of Legends. However, as of October 2021, the tide seems to be turning in Decentralized Gaming’s direction. With Decentralized Games like Cryowar launching in mid-October, which rivals the strategic complexity, graphics, and overall enjoyment of Tier 1 games like League of Legends, experts believe that a large influx of conventional gamers will soon be coming into the Decentralized Gaming sphere.
These games, while performing equivalently to conventional games, actually hold superiority over conventional games due to its ability to distribute real-world monetary rewards to gamers, and allow the players true say over how the game develops.
With Play-to-Earn providing job stability across the globe, and Decentralized Gaming providing fair distribution of the game’s value across all those contributing to its development and refinement, we can confidently say that Decentralized Gaming’s current $16.9 billion market cap is justified. With the industry finally releasing Decentralized Games that are truly comparable to conventional apex games, along with the rising global exposure of Decentralized Gaming, we can confidently say that this market cap could be just the tip of the iceberg.
DeFi Revolutionized in 2021/2022
However, as stated at the start of this article, DeFi has various problems associated with it that inhibit its ability to replace legacy finances, and that ingenuity is required to fix the industry. The ingenuity, we believe, will be derived from the DEX protocol built from us at Sigmadex. Through years of meticulous development and extensive self-auditing of our algorithms, we are proud to say that we have solved the major problems in DeFi, which largely include impermanent loss, front-running, over-collateralization on loans, amongst others (learn more about the intricacies of our methodology in our article here, and issues with over-collateralization here).
But how does correcting DeFi relate to Decentralized Gaming, and how exactly does supporting a DeFi-related project like Sigmadex help you capitalize on the uprising of Decentralized Gaming within the marketplace?
Sigmadex Provides Economy for Decentralized Gaming
We at Sigmadex know of the seriousness behind Decentralized Gaming, particularly for those who rely on it as their primary income source. Therefore, we are glad to announce that our DEX solution has infrastructure specifically structured to maximally benefit the trading of currencies derived from Decentralized Gaming ecosystems. This means that by supporting Sigmadex, you are directly supporting the entire trading economy that represents the Decentralized Gaming industry, rather than taking your chances at investing in any one game. In extension, by supporting this protocol, you are ensuring the security and longevity of millions of citizens’ jobs worldwide, and also capitalizing on this multi-billion-dollar industry in a truly inclusive way.
To learn more about Sigmadex, check out our website. For the savvier mathematical and/or computer science readers, check out our Lightpaper and Github for an in-depth explanation of each of our components whose validity is verified through auditable mathematical models.