DeFi Application in WidiLand

Source: CoinExpress

“DeFi is the gamification of finance, GameFi is the financialization of games”, said Kieran Warwick, the co-Founder at Illuvium.

Short for decentralized finance, DeFi refers to a variety of financial applications and projects in the public blockchain. Unlike traditional finance where lending and borrowing, trading, insurance and so on must go through a central party, DeFi eliminates the middleman through the use of smart contracts.

Now, many GameFi are utilizing DeFi to bring more revenue streams for players besides Play-to-Earn and selling NFT.

Yield Farming

Yield farming, also known as yield or liquidity harvesting, involves lending cryptocurrency and in return, you get interest and trading fees.

Similarly, in GameFi, you can deposit a pair of cryptocurrency to a pool to get revenue. This is called dual-sided staking. On the other hand, single-sided staking involves only one cryptocurrency, such as the game’s native one, where players lock a certain number of tokens in exchange for more tokens and other special perks.

Moreover, you can see innovations in many games which even allow players to lock their NFT for a certain amount of time to earn rewards, as in My DeFi Pet.

Lending and Borrowing

Crypto holders can lend on decentralized lending platforms to earn interest fees paid by borrowers who are in need of extra funds for arbitrage trading or investment opportunities.

In GameFi, you can lend and borrow not only tokens but also NFT. However, contrary to tokens, because each NFT is unique and has different attributes, the lenders will specify the time and interest paid instead of having an algorithm doing so for them as in Aave or Venus. In return, the borrowers can use these NFT to boost their revenue stream or increase their likelihood of winning in competitions by borrowing powerful pets or characters.

A case in point is Mobox where players can lend or borrow Momo to increase mining power.