The year 2021 has been a boom for NFT. Art and collectibles have the most use case and follows by gaming, according to data from The Block, global Non-Fungible Token (NFT) trade volume reached $8.8 billion in 2021, with arts and collectibles accounting for 59 percent of the overall volume and gaming NFTs accounting for 41 percent.
Gaming in NFT is an opportunity for developers as gaming has the highest market share in the entertainment industry. For gamers out there, it is an opportunity to gain income, not only do pro gamers that have an opportunity to earn but you can earn in web 3 through projects that implement Play 2 Earn model.
With a LOT of Web 3 games out there I believe that a good web3 game, in my opinion, will be those that mix exciting AAA-quality graphics with long-term mechanics backed by robust tokenomics.
So, why tokenomics is important?
Tokenomics is a crucial idea to take into account when making an investment decision.
A project that has clever and well-designed incentives to acquire and keep tokens for the long haul is more likely to outlive and perform better than a project that hasn’t established an ecosystem around its token.
How can you determine a good GameFi based on Tokenomics? Consider these:
Token Utility: What is the use case of the token. Utility drive demand. Eth is used for transaction fees also it’s been used on a lot of dApps as well as move erc20 tokens around.
Distribution: How projects distribute the token. How many the teams get, the treasury, the private sale, etc. If the token is distributed to the team too much there is a huge risk of the dump.
Vesting Period: The vesting period is how the token will be unlocked. Unlocking at once and in a short time can sink the price of the token.
Supply: Knowing the supply of the coin or token. Get to know how much the token is available and that will be available in the future. There are max supply and circulating supply
Circulating Supply: The total amount of coin/token that is in circulation. Most projects either lock some supply of the token into a vesting period or it is not yet mined yet.
Max Supply: The total amount of supply including the circulating supply and the supply that is locked or that still hasn’t been mined. Some have an infinite or finite supply.
If the coin/token supply is very limited, it will be very scarce and could have a higher price if it is paired with a currency or stable coins. Just common sense if you refer to the law of supply and demand.
Market Cap: Token Price*Circulating Supply. It’s the indicator for you to identify how easy it is to manipulate the token price
If you see a coin/token has a very low supply but a very low market cap compared to the other token, meaning it has a lot more potential to the upside than the coin/token that is compared with it. That's why you should focus on the crypto market cap rather than on the value in USD think in percentage terms.
Burning Mechanism: Some blockchains or protocols “burn” tokens and permanently remove them from circulation — to reduce the supply of coins in circulation. According to the laws of supply and demand, reducing a token’s supply should help to support its price as the remaining tokens in circulation become more scarce.
Staking: If you stake a token, it will be locked up. Staked tokens like ETH2.0 cant go to the exchanges. If the token is staked means it will halt selling pressure. This means it can go back to exchanges
Yields: Some coins/tokens have offered yield. It is used to incentivize people to buy and stake tokens. Tokens are staked in liquidity pools — huge pools of cryptocurrencies that power things like decentralized exchanges and lending platforms. These yields are paid out in the form of new tokens.
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