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In 2020, DeFi jumped into the limelight and a decentralized financial revolution quietly unfolded around various decentralized protocols built on blockchain networks (mainly the Ethernet network). Taken together these protocols constituted an open financial system built on transparency, accessibility and inclusiveness. This revolution was followed by the rapid emergence of various innovative DeFi projects, including Yearn Finance (YFI), a farming protocol for lazy people represented by the AC system.
Founded in 2020, Yearn Finance aggregates multiple DeFi interest-bearing services and offers users the best rates without the need to constantly transfer their funds. Furthermore through YFI users save up on the cost of Gas. This aspect can be considered equivalent to visiting Bankrate.com, where you can see which banks offer the best rates on savings accounts. Moreover you don’t have to choose just one account . You just deposit your money at Bankrate and the company automatically chooses the highest rates for you, even when those rates change.
The big difference, of course, is that like all DeFi, Yearn is made up of code that anyone with an Internet connection can access and use. It is not controlled by a bank nor any other centralized institution. This gives Yearn’s “Vaults” more flexibility in how they generate returns, rather than simply aggregating interest. For example, when you deposit some WBTC (an ERC-20 token that tracks the price of BTC) into Yearn’s WBTC vault, then the vaults contents will be strategically applied to pursue maximum revenue.
GameFi on the rise
After the explosion of DeFi, GameFi started to flourish in July and August of this year. Axie Infinity initially led this rise on the chain and stirred the market on its own. Since then, the market value of GameFi has risen rapidly and thereby attracted both capital and users to participate in the on-chain gaming ecology with different roles. GameFi has gradually become one of the most searched protocols and many new GameFi projects have started to financialize NFT games. Moreover, this gamification of Defi has amplified the mutual benefits for and the common interests between developers, players and publishers. A new win-win relationship is being formed, as players begin to shift from “Play to Enjoy” to “Play to Earn“.
The rise of GameFi is being fueled by YieldGuildGames (YGG), a decentralized autonomous organization (DAO) from the Philippines. YGG both sponsors and unites millions of Play-to-Earn players in a novel ecosystem which further enhances the meta-universe. This DAO aims to create the world’s largest virtual world economy by investing in Play-to-Earn games and their in-game assets to enable revenue-making through blockchain-based economies.
But YGG also has its shortcomings, because of the complexity of GameFi’s gaming ecosystem. As the guild gets involved in more and more games, the professionalism of the guild’s players is also prone to rise. However, at the same time more ordinary players will join who cannot compete with professional players. Such a situation leads to a low gaming revenue and will indirectly cause membership losses (of professional players) for the guild.
This raised the question on how to protect the conflicting interests of both ordinary and professional users, whilst also guaranteeing the ideal gaming revenue output. This gap in the market requires a protocol which fuses DeFi’s vault system with YGG’s guild model. It was based on these expectations that the GameFi protocol (GFI) was born.
The GameFi Protocol
First of all, the GameFi protocol supports ordinary player users who lack professionalism and have only limited time. Users can efficiently allocate their digital assets into different GameFi projects through GMiner and cooperate with professional players to get the maximum benefit.
Simultaneously, the GameFi Protocol incorporates Yearn’s vault strategy to maximize returns on users’ assets in GameFi, whilst balancing the risks. Moreover, this lowered threshold prompts passive players who are not proficient in GameFi products to deposit assets in one of the GameFi Protocol’s various vaults. Users can rest assured of their investment as the Protocol will automatically adjust to changing rates in the pursuit of the highest possible returns.
On the executive level, the GameFi Protocol aims to combine YGG’s gold farming guild with a DAO community governance model to play an adjusting role in selecting quality games and players, distributing gaming revenue or NFT props flow. It thereby catalyzes the continuous development of better quality games and a better revenue model for the protocol.
The GameFi’s gaming ecosystem adds evermore links and players, which will make the whole ecosystem more stable so that the collapse of a single link cannot lead to a total system breakdown. Therefore the GameFi Protocol combines Yearn’s vault strategy and YGG’ guild model to reconstruct a chain gaming ecology. This not only significantly reduces the thresholds for participants, but also maximizes revenue for members. This latest initiative from GameFi marks a significant step in the transition from “Play to Earn” to “Everyone to Earn”.
