Introduction

Introduction

The possible yields from GameFi are high and unimaginable. When compared to traditional games, the blockchain gaming industry is yet to reach its full potential. Accenture's estimates put traditional gaming's value at 300 million, with the revenue for Asia and the Pacific alone estimated to be $72 billion in 2020. In 2020 alone, players spent approximately $5 billion on VR games. GlobeNewswire predicts that the gaming industry will be worth a mind-boggling $545.98 billion by 2028. Such revealing statistics only point to the limitless earning potential of blockchain gaming, which is poised to replace or at least absorb traditional gaming in the near future.

Despite the desire and willingness to play these interesting games on the blockchain, players face a significant entry barrier. Being mostly from developing countries, they do not have the means to get the NFTs required to play their favorite games. The high-entry barrier to blockchain games means fewer players, a slower pace of adoption, and a reduction in the overall growth of the same games that set the entry requirements. Nevertheless, gaming NFTs are an important part of the overall economics of most blockchain games, and it makes no sense to remove the need to purchase NFTs to play altogether.

High entry-barrier

While players grapple with a high-entry barrier despite their excellent gaming skills, millions of investors are eager and willing to put their money to work in the GameFi sector. The millions, if not billions, of dollars already invested in gaming guilds, support this proposition.

Moreso, the speedy adoption of DeFi, a related sector that just became popular in 2020, lends credibility to the promise of GameFi. At its peak in 2022, for example, the total value locked in DeFi protocols, according to data from DeFilama, was $180 billion.

Unsatisfied Demand

Moving back to the gaming industry, several new guilds have earned millions of dollars by creating a surprisingly fundamental system for GameFi NFT rental. Yet the millions of investors across the globe interested in investing in GameFi have no idea whether these guilds exist. When they find out about guilds, savvy investors often get skeptical about the idea. Putting valuable NFTs in new protocols with less automated mechanics sounds a bit scary. The distrust is heightened by the idea that these projects will also have to give their NFTs to players who investors do not know and cannot control.

There is a huge mismatch between the demand and supply of investors and players, which must be met. The millions of NFT owners or investors willing to invest their prized NFTs for passive income need a passive income tool. Several institutions and investment projects in the DeFi space are willing to commit huge amounts to an alternative source of passive income in an evolving sector.

Solution

The solution to the aforementioned needs and problems in the GameFi sector is an NFT rental protocol based on a revenue-sharing model. Revenue sharing makes for a fair and decentralized economic idea where all participants in the income-generation process receive a considerably reasonable amount based on a fixed formula or a flexible agreement term.