DeFi is converging with non-fungible tokens (NFTs), with the Ethereum-powered game Axie Infinity seeing a spike in users ahead of the expected launch of the project’s governance token.
Axie Infinity is a decentralized turn-based strategy game that draws influence from Pokemon and Tamagotchi with players able to breed, battle, and trade NFT-based fantasy creatures dubbed ‘Axie’.
Since launching in February 2018, the game has attracted more than 7,000 tokenholders, and more than 4,500 active marketplace participants. It was recently ranked the No.11 NFT game by lifetime Ether volume with 4,570 ETH.
Based on the number of NFT owners, Axie has outgrown all of the titles ranking in the top ten by volume, except for Gods Unchained and CryptoKitties.
Axie Infinity shares some characteristics with DeFi, with users composing guides instructing players how to ‘farm’ Axies to generate a consistent income.
Players can currently earn the ‘Small Love Potion’ (SLP) utility token by playing the game, with the token being required to breed new Axies. SLP is currently trading for $0.046 and has a 24-hour trading volume of $38,200.
The recent spike in Axie Infinity users has been attributed to anticipation for the project’s upcoming governance token.
The token was announced August 9 by the game’s co-founder Jeff Zirlin, who tweeted that a native governance coin would launch before 2021.
Other projects explore NFT-DeFi convergence
Axie is not the only crypto gaming company looking to bridge NFTs and DeFi, with Polyient Games announcing it will issue a membership and rewards ERC-20 token that can be used to provide liquidity to the market’s pool. In July, the company also revealed it would bring an “NFT-focused decentralized exchange” onto Ava Labs’ Avalanche platform.
Speaking to Cointelegraph, Polyient’s Craig Russo described NFTs as beginning to emerge as “a standalone asset within DeFi,” emphasizing the growth of lending markets and fractional trading for the tokens.
A protocol for bundling Compound (COMP) positions into tradeable NFTs has also been submitted to the Kyber DeFi virtual hackathon.
