Category: DeFi Kingdoms

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Metaverse Weekly: Ape’s, Chikn’s & a Whiff of Meta

Over the past week, numerous announcements, partnerships, and developments have been announced that have the potential to impact the metaverse space. The market cap of the metaverse cryptocurrency sector ends the week hovering around ~$29 billion USD. Most of the sector was down in price over the past week, though recently released ApeCoin (APE) ended the week up on a 15% gain.

APECOIN
Price action of APE over past seven days. Image credit: CoinMarketCap

Among top mentions in the metaverse market this week include these key players:

  • Avalanche NFTs & DeFi Kingdoms
  • Meta
  • Fidelity
  • Coinbase

Chikn NFTs Arrive in DeFi Kingdoms

The popular gamified DEX DeFi Kingdoms (DFK) recently made a major expansionary move to the Avalanche network. On Avalanche, DFK is utilizing the Synapse bridge to create a brand new realm called Crystalvale. This new realm will come along with a new power token in CRYSTAL.

This expansion to Avalanche has opened up DFK to an additional partnership with Chikn, the young NFT project featuring chickens (and soon roosters) as yield-generating NFT mints.

Chikn has a unique economic structure, deploying three separate tokens to power its ecosystem.

Those three tokens are:

  • Chikn – an upgradeable chicken-inspired NFT that lays $EGG
  • EGG – the governance and utility token for the ecosystem
  • FEED – harvested via the chikn.farm app, FEED is eaten by chikn to entice upgrades and higher yields.

These three tokens provide functionality and a self-sustaining economic system. Now, with an added utility to Chikn NFTs with the coming integration to DFK, both projects can cross-pollinate their user bases to facilitate new growth in the metaverse sector.

Chikn NFTs
Chikn NFTs

Facebook-Rebrand Meta Reveals Hefty NFT Costs

The parent company of Facebook, Meta, recently announced an eye-opening 47.5% cut on NFT sales stemming from its virtual reality platform called Horizon Worlds. This cut makes Meta the most expensive in the entire industry and it isn’t even close.

The fee can be broken down into two different parts. The first part is an immediate 30% hardware platform fee which covers Meta Quest store sales while the remaining 17.5% fee comes from the Horizon Worlds platform.

A comparison between fees across NFT marketplaces is provided below by Twitter user @dustdust213

The massive platforms of Looksrare, Rarible, and OpenSea have substantially lower fees of only 2-2.5%, laughable in comparison to the massive cost pressure Meta is putting on its own creators.

Investment Giant Fidelity to Launch New Metaverse ETF

Fidelity Investments announced its intentions to launch a new metaverse-branded exchange traded fund (ETF). The ETF, called FMET, will enable interested investors the ability to invest in a metaverse-specific fund, providing exposure to the fast-growing asset class.

Assets that can be expected to receive consideration for the fund include the following stocks & cryptocurrencies:

  • Meta
  • Nvidia
  • Unity Software
  • Microsoft
  • Decentraland
  • Axie Infinity
  • The Sandbox

This opportunity provides a brand new on-ramp for metaverse projects to receive liquidity and investment assistance. With new buyers stemming from the Fidelity channel, growth can be more readily achieved moving forward.

This announcement also further solidifies the broader interest in metaverse applications from external investors.

Coinbase Developing a BAYC Movie Trilogy

The most interesting development over the past week was the major Coinbase announcement of a coming Bored Ape Yacht Club (BAYC) trilogy. BAYC is one of the most prominent NFT collections in the world today, with a floor market cap of over 1 million ETH (~$3 billion USD).

Users have the opportunity to participate in the project. The call for the community to participate is essentially a casting call. Those holding BAYC NFTs can deposit them to a Coinbase Wallet and connect them to the degentrilogy.com website to participate, bringing any ideas for characters and storylines.

The very first instalment of this new trilogy is said to premiere in June 2022.

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Metaverse Weekly: The Expanding Tokenomics of GameFi Protocol DeFi Kingdoms

DeFi Kingdoms (DFK) is a young play-to-earn (P2E) gaming protocol built on the Harmony Network. The protocol is fueled by its native cryptocurrency JEWEL. The JEWEL token powers in-game purchases and rewards such as NFTs (Heroes), collectables, and more.

DFK launched in the summer of 2021 with the intention to develop a gaming-powered yield farm. By leveraging the smart contract applications of the Harmony blockchain combined with Uniswap’s V2 protocol, DFK has managed to attract a healthy usage for its JEWEL token.

DeFi Kingdoms: Serandale: https://game.defikingdoms.com/ 

Tokenomics of JEWEL

The JEWEL token essentially works to function entirely like a gamified DEX (decentralized exchange). JEWEL employs basic DEX tokenomics in that DFK users essentially participate in yield farming to earn JEWEL tokens.

The JEWEL token itself has two key functions to understand overall. They are:

  • Depositing at the DFK Bank
  • Delegating JEWEL to a liquidity pool in the Gardens

When JEWEL is deposited at the Bank, users can exchange it for xJEWEL governance tokens which come with a yield, incentivizing participation. The other option is to simply delegate tokens to a liquidity pool, meaning that the user exchanges their liquidity to the pool to generate higher returns.

At genesis, 10 million JEWEL tokens were pre-mined and distributed out to multiple channels, including:

  • 5 million towards game development
  • 2 million towards marketing
  • 2 million to form the original liquidity pool
  • 1 million to the founding time

While the initial distribution of tokens was highly centralized, JEWEL has a fixed supply of 500 million tokens, meaning that only a small percentage of tokens was pre-mined and airdropped in the original distribution.

JEWEL token is capped at a fixed supply of 500 million possible tokens. The remainder of those tokens will be introduced into DFK via the yield farming mechanisms and follow the following supply curve:

Source: Messari

An important note about DFK’s JEWEL token is that the max supply can be changed at any time through governance. Users participate through the DFK Bank (via xJEWEL governance tokens) in which they receive governance power and rewards in exchange for their liquidity.

Criticisms of DeFi Kingdoms

While the tokenomics of JEWEL function properly, the current development of DFK  has been a subject of criticism as the protocol lacks a true gaming experience. The label of being a “gamified DEX’ is something that developers have even acknowledged.

As Ismail Mert Tarihci of Admix stated: “DeFi Kingdoms has been thriving on the future implied development of an actual game being built on top of the current DEX (decentralized exchange) mechanics of DFK.”

A push forward in the DFK roadmap is the integration of new realms into DeFi Kingdoms. The first of these new realms is the integration of a new DFK token called CRYSTAL via the Avalanche network.

Integrating Avalanche (AVAX) and the CRYSTAL Token

Towards the end of Q4 2021, it was announced that DFK would be integrated into Avalanche (AVAX) as a new accessible realm powered by its own token CRYSTAL. 

The move allows DFK to take advantage of the low costs and fast transaction times typically associated with the Avalanche blockchain network. It also expands the overall use case of the DFK ecosystem as a whole. This new realm is called DeFi Kingdoms: Crystalvale and is bridged to the main realm of DFK.

DeFi Kingdoms: Crystalvale: https://defikingdoms.com/crystalvale/ 

The CRYSTAL token operates very similar to that of JEWEL. It can be used to purchase or mint new Heroes (NFTs), utilized as liquidity in the DEX or farms, and serves as the Crystavale realm native currency.

The value of both JEWEL and CRYSTAL are linked through shared utility since they power many of the same features (called Power Tokens). Additionally, JEWEL fuels the gas fees for the main DFK blockchain where CRYSTAL transactions are settled, meaning JEWEL literally powers CRYSTAL.

Because of this, the incentives for holding JEWEL have expanded substantially. Those holding JEWEL are now the beneficiaries of increased transaction volume due to CRYSTAL.

Summary

The expansion of the DeFi Kingdoms ecosystem to include Avalanche not only provides an improved use case for DFK but also directly incentives higher usage of both the JEWEL and CRYSTAL tokens simply through basic economics.

While the further development of a true game on DeFi Kingdoms remains a speculation of sorts, for now, the protocol experienced substantial growth over Q1 2022 and looks to expand on that growth over the rest of 2022.