Throughout its growth, the internet has influenced every area of our lives. Web 2.0, for example, has opened up new worldwide financial innovation opportunities. Gig economies have been a major contributor. Everything from cab booking to home massages to freelance work prospects is now available with a simple click. So much so that by 2023, the gig economy will be worth $455 billion. Web 2.0 continues to hire people with varied skill sets and expertise.
However, web 3.0 is swiftly advancing the internet towards the next era of innovation. As a result, things like gaming as a career are no longer unthinkable for most people. The gaming business is huge in the realm of entertainment and has been for a long time. Traditional games are currently valued at $178 billion and are anticipated to reach $268 billion by 2025. Web 3.0 has the ability to drastically revolutionize the interaction between gamers, games, and game makers, among other markets.
Blockchain, cryptography, and tokenization advances are vital in this area. Web 3.0 promotes new economic opportunities, decentralization, and community building. The booming blockchain-cryptocurrency business, with a market valuation of over $2.5 trillion, helps it do this. Non-fungible tokens (NFTs) are a product of this sector, and they have huge significance and scope in digital gaming.
Game worlds are no longer assemblages of immaterial warriors, weaponry, racing vehicles, or anything. A potential economic alternative, especially in economies free of traditional finance’s excesses, is gaming finance (GameFi). Southeast Asia has established itself as a breeding ground for GameFi ecosystems, which is very important for global economic landscape. But why is this location ideal for GameFi?
GameFi’s calming influence on uncertainty, inflation, and corruption Southeast Asian economies are typically weak, falling to the dollar, pound, or other first-world currency supremacy. It is also common to see high inflation in these countries.
Covid-19-induced global economic shutdowns have compounded the issue. Over 81 million individuals lost work in Asia-Pacific in the last two years. Worse, there is extreme financial disparity. In Thailand, for example, 1% of the population controls almost 58 percent of the nation’s wealth and resources. Plus, the ASEAN area has the worst corruption perception index ratings in the world.
So the region’s poor communities seek new livelihoods and economic models. GameFi has an answer, especially post-pandemic. Play-to-earn (P2E) games rose to the occasion as individuals remained confined to their houses, bereft of traditional income and nourishment.
Games like My DeFi Pet, for example, allowed players to make money and become more than just pastime. During the epidemic, most active P2E gamers were from Southeast Asia.
Gamers were motivated to improve their abilities because they may earn US Dollars. Positive response encouraged the region’s kids, who earned $1,200 monthly from just one game. Because remittance accounts were inaccessible during the outbreak, many families relied on GameFi for revenue.
Also, companies like Yield Guild Games (YGG) boosted GameFi’s possibilities. P2E gaming requires in-game NFTs, which some individuals cannot pay. By giving community support and scholarships, YYG overcomes this barrier. Renting metaverse assets adds another layer to their economics.
Tech-savvy but unbanked?
The ASEAN young are particularly tech-savvy, which drives GameFi adoption. Over 90% of the 213 million young people in the region now have mobile internet. However, approximately 290 million people in Southeast Asia remain unbanked, meaning just 18% of the population has access to traditional financial services.
GameFi helps individuals in limbo, while blockchain-based solutions provide access to digital wallets and cross-border payments. The company has also made financial services more inclusive than before, contributing to GameFi’s entire value offer.
GameFi also provides liquidity to in-game assets, enabling off-chain transactions. Gamers may use their gaming assets offline in a variety of ways. Players can fractionalize assets and use them in DeFi protocols.
Others may pledge them as loan collateral or trade them in secondary markets and derivatives markets. GameFi, in a sense, unlocks the hitherto untapped potential of in-game assets, which was previously unreachable.
Finally, Vietnam’s pivotal role in GameFi’s progress must be emphasized. GameFi’s most popular product, Axie Infinity, is Vietnamese. As well as superior to typical blockchains in terms of quick block confirmation, low transaction fees and over ten thousand transactions per second.