Huobi Research Institute has just published their latest report: How New Institutional Economy Explains GameFi’s Rise. This report examines the past of GameFi, and describes how innovative features have revolutionized traditional gaming formats. 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. GameFi is the new blockchain game type. It combines commerce and finance with gaming. 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.

Huobi Research Institute has created this report to analyze GameFi. It covers three areas: transaction costs and gameplay. Playability and production level are crucial for games to succeed. GameFi also offers special DeFi tools that dramatically reduce transaction costs and improve the user experience. GameFi protects private property rights through giving players the option to either sell or hold on to certain resources. This increases user independence, stimulates market competition and reduces transaction costs.

The popular GameFi game is used as an example in this report to show how GameFi games are different from other types. It also provides a framework for assessing the overall value of GameFi.

You can read the entire report by clicking here

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