Yat Siu, Chairman and Co-founder of Animoca Brands – the company behind the Sandbox game, addressed this topic during his latest keynote at the Hong Kong Blockchain Week 2020.
Siu kicked off the speech by narrating another pandemic called the Black plague that was affecting the whole world back in the 14th century. Because of it, 10 million people died in Europe. That somehow ended the feudal society and marked the beginning of the new reigns of people that enjoyed something new: property rights.
All the money back then was controlled by centralized organizations of the feudal system, while the banking system existed just to support feudal society. However, when property rights were distributed throughout Europe, it allowed for major banking institutions to become powerful and introduce financial innovations. One of them was the concept of “double-entry” which led to the conceptualization of our financial accounting system.
Why does blockchain matter then?
According to Siu, we are going from the double-entry to a distributed ledger financial system where blockchain executes the same verifications of the former method but across millions of nodes. This technology innovation is marked on something else which is DeFi. In the last few months, Decentralized finance has swelled considerably in the total value locked (TVL) in the form of loans, liquidity pools, etc.
Why are Non-fungible Tokens (NFTs) appealing?
Non-fungible Tokens (NFTs) really represent true digital ownership. According to Siu, DeFi now is working as the bank, NFTs will deliver the merchants and the properties.
“In fact, the NFT is effectively a property right,” said Siu. “You don’t just lock value in non-fungible tokens, you actually own the asset and receive all the benefits attached to it”.
Now that over 2.6 billion gamers have virtual assets but do not really own it, that is where blockchain and NFTs come into play. First widely known as a result of the famous CryptoKitties game, now an influx of blockchain games such as Axie Infinity or the Sandbox has utilised the format of non-fungible tokens as a way to verify digital ownership for their players.
It is estimated that there are only 147,636 people who actually own a NFT this year; compared to more than 47 million blockchain wallet users. Siu suggested that these users should own some properties to fuel the DeFi revolution. Besides, since the sale of NFTs (100 million USD) is relatively small compared to the value of the gaming industry (149 Billion USD in 2019), Siu believed that we are just at the very early stage of this revolution.
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