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Your ELI5 guide to Web 3.0 and GameFi

Before Web 3.0

Web 1.0 was mainly focused on content consumption with a few users posting content and the majority consuming it passively. The internet was mainly designed for information access and one-way communication. Static websites and personal sites were the main websites available.

Web 2.0 which is the version of the internet most of us know today, brought us user-generated content, usability, and interoperability for end users. It’s also called the participative social web and is currently prevalent in social media.

What happens with Web 3.0?

Web 3.0 is the next generation of the internet that will bring in a new level of decentralization and a higher level of ownership to the internet. As big tech harvests user personal data for their own personal gain, a greater need for people to become shareholders and participants has been arising. 

Web 3.0 brought forth the idea of “shares” through cryptocurrency tokens and allowed participation in shareholder governance through utilizing these tokens. Web 3.0 platforms are built upon decentralized blockchain protocols where there is no centralized ownership of content, services, or platforms. It means that web 3.0 content creators can be compensated fairly and access to information is open to the public.

Web 3.0 exploded onto the scene during the DeFi summer of 2020. It was this time period where decentralized cryptocurrency applications or DAPPs were prevalent and decentralized finance began to offer cryptocurrency users supreme capital efficiency through their lending, borrowing, and earning protocols. According to DeFillama.com since 2020, the total volume locked within these DeFi protocols jumped from $600M to $213B, more than 35000% increase within just two years! 

Web 3.0 Total TVL

Source: Defillama

GameFi 101

Anything within the Web 3.0 space can be “tokenized”, whether it’s a piece of art, quote, tickets, or even social media output existing in the form of a non-fungible token or “NFT”. 

The NFT space has been growing exponentially just like the DeFi movement with total market cap exceeding $18B from only $600M since last year, a YoY growth of more than 3000%!

Source: NFTGO

One of the greatest movements in this space is happening within the gaming industry. NFT gamers now have the ability to participate in voting, purchasing in-game items, and even investing in their favorite NFT game through holding the game’s token. The entire space is relatively new and has a market cap of $2B and is growing rapidly. Compared to the traditional gaming industry market cap of over $100B, this is just the beginning.

Source: NFTGO

Source: Statista

NFT P2E Saga

The NFT gaming space has popularized the Play-to-Earn (P2E) system, where players can play and earn gaming tokens that can be exchanged for real monetary value. In traditional games, the in-game assets you purchase generally don’t have any value outside the game since you can’t sell or rent them out and hence don’t have full control over them. 

P2E games changed this concept using blockchain technology, cryptocurrencies, and DeFi products. As P2E games have an in-game token and a marketplace to trade it on. This process is governed by the community, which gives it the right to be called decentralized. 

Players can swap the in-game currency for other cryptocurrencies and fiat money, or stake it on the blockchain and earn a passive income in the form of Annual Percentage Yield (APY). All P2E games offer different APYs, gaming guilds also have that feature (GG included😉). 

On top of that, players can trade their in-game assets (NFTs) on a marketplace. Recently it has become possible to rent them out for a small percentage, which can generate a passive income for players. Galaxy Guild is building a platform for that as we speak (*wink*).

The exciting developments within NFT gaming has even caught the attention of the traditional gaming sector seen in the example of traditional platform game Decimated releasing their own gaming token and NFT item marketplace.

Web 3.0 NFT Gaming
Web 3.0 NFT Gaming

Source: Decimated

GameFi is continuously evolving the concept of ownership of in-game assets while giving players the option to yield returns from owning them and participate within the wider NFT community. As innovation within the space continues to charge ahead, it is inevitable that more and more capital as well as developers jump into NFT games and Galaxy Guild will be there to participate!

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