LONDON, Dec. 28, 2021 /PRNewswire/ — Huobi Research Institute, the leading blockchain application research team, has published its latest research report:How New Institutional Economics Explains the Rise of GameFi. The report delves deep into the history of GameFi and explains how new features are revolutionizing traditional gaming models. Huobi Research Institute analysts use elements from new institutional economics theory to explain GameFi’s recent success.
Since June of this year, numerous blockchain games incorporating NFTs, DeFi and other elements under the “Play to Earn” concept have generated much buzz in the market. This new type of blockchain game, also known as GameFi, integrates finance and commerce with games. Many credit GameFi’s success with the “Play To Earn” model, in which players can earn money by progressing throughout a game. However, Huobi Research Institute analysts use new institutional economics theory to argue that the the key factor behind GameFi’s success is how DeFi reduces transaction costs by enabling the free trading and monetization of in-game items and currencies.
This report from Huobi Research Institute analyzes GameFi through three aspects: gameplay, transaction costs, and property rights. For games, production levels and playability are the basis for success. Secondly, with special DeFi mechanisms, GameFi has enormously reduced transaction costs and improved user experience. Lastly, GameFi effectively secures private property rights by giving players the right to decide whether to sell certain resources or not, which improves user independence and stimulates market competition, reducing transaction costs.
This report uses the popular game Axie Infinity as an example to explain how GameFi games differ from traditional ones in different aspects, and uses a framework to assess the value of GameFi as a whole.
To read the full report, click here.
About Huobi Research Institute
Huobi Blockchain Application Research Institute (referred to as “Huobi Research Institute”) was established in April 2016. Since March 2018, it has been committed to comprehensively expanding the research and exploration of various fields of blockchain. As the research object, the research goal is to accelerate the research and development of blockchain technology, promote the application of blockchain industry, and promote the ecological optimization of the blockchain industry. The main research content includes industry trends, technology paths, application innovations in the blockchain field, Model exploration, etc. Based on the principles of public welfare, rigor and innovation, Huobi Research Institute will carry out extensive and in-depth cooperation with governments, enterprises, universities and other institutions through various forms to build a research platform covering the complete industrial chain of the blockchain. Industry professionals provide a solid theoretical basis and trend judgments to promote the healthy and sustainable development of the entire blockchain industry.
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SOURCE Huobi Research