NFTs (non fungible tokens) are a derivative of the cryptocurrency market. Cryptocurrencies are known as “fungible tokens”, because one unit of a cryptocurrency coin can be exchanged for another unit with no loss in value. NFTs on the other hand are non-fungible because one NFT cannot be exchanged for another with the same value. You can’t change apples for oranges, or Apples for Samsungs quite readily, can you? This same idea applies to NFTs. This makes NFTs a digital good that can be bought and sold. In this article we will explore a few examples of NFT gamification.
In the early days of NFTs, they were primarily traded as artwork that was new, fancy and cool. Cryptopunks and Bored Ape Yacht Club, being two of the most prominent early forerunners in this space, received a lot of attention, especially from celebrities and influencers such as Snoop Dogg and Eminem. In fact, Snoop Dogg and Eminem recently released a music video featuring the NFTs that they own, called “From the D 2 the LBC”. You can watch it here:
These NFTs rose in value when more and more people wanted to own them, pushing prices up amidst limited quantities of available NFT items. Subsequently, people started to see NFTs as investments which could yield high returns. Many of those who bought NFTs were interested in flipping them quickly. These people are nicknamed as “paper hands”.
However, this trend is slowing down, as the cryptocurrency market is trading at low volumes now, coupled with a slow down in the general economy. Instead, new NFT creators are coming up with new methods of attracting people to their NFT projects. One of these new methods is “gamification”.
Now, gamification is not the same as gaming. Gaming NFTs are game characters which can be used in a “play to earn” game such as Axie Infinity, Alien Worlds and Gods Unchained. Players would buy an avatar as an NFT and play the game built specifically for that use. Their achievements in the game may reward them with cryptocurrency coins, thereby motivating them to play the game more and more, and trade up their existing avatars for more powerful ones.
Gamification, on the other hand, is building fun and engagement into an NFT project that is not a “play to earn” game to begin with. Communities who buy into these NFT projects can look forward to interesting mechanics built into the NFT project itself that make owning and trading the NFT a fun experience.
Let’s take a look at the example of WZRDS. The gamification mechanics of WZRDS are designed such that it rewards those who HODL their NFTs (nicknamed as “diamond hands”) and “punished” those who saw this project as purely an investment opportunity for them to turn a quick profit (the “paper hands” I mentioned earlier). By the way, the term “HODL” above refers to those who hold on to their NFTs, with HODL being an acronym for “hold on for dear life”.
The WZRDS project builds an entire folklore around their NFTs, with their brand story clearly and consistently shown across their website and social media. This sets up an immersive story that NFT buyers can expect. What WZRDS additionally does, through its gamification mechanics, is that it encourages the owners of its 10, 000 NFTs to not resell their NFTs. This means that they should delist their NFTs on OpenSea, the “secondary market” where WZRDS are listed on. They are also further encouraged to stake their NFTs by keeping them in a designated spot. This is known in the folklore as “the forest”. By staking their NFTs, owners can gain god-like powers that enables them to punish “paper hands” (called as “COWZRDS” in the WZRDS folklore. How does this happen? Well, those who have received such powers can go to a “Peddler” in the WZRDS universe and buy a potion that would kill a COWZRD.
Interesting isn’t it? Once a “diamond hand” decides to murder a COWZRD, anyone who is holding a WZRDS NFT that is listed on OpenSea at less than 3.2 ETH is at risk of having their NFT “burned” (destroyed). The money they spent on buying that NFT will not be refunded to them, and the NFT they own is just, well, gone! So, the only way to be safe from random burning is to delist the WZRDS item that one owns, and to only relist it on the secondary marketplace if and only if they are willing to list it at 3.2 ETH or higher. But wait, there’s more. As a consolation prize, the murderer and the murdered both get a Half Skull currency once a murder takes place. This Half Skull currency is an ERC20 token, which means that it is a fungible token that can be used as a cryptocurrency.
Several other projects have taken up gamification in their NFT roll outs as well. We are All Going to Die builds an unfolding story as part of their NFT roll out, in a sort of “choose your own adventure” format. The community of HODLers can expect updates on the story and play along as the avatars their own. This extends the interest that HODLers have in the NFT project beyond an immediate scope. As a side note, lest you think that We are All Going to Die is just being morbid, there is a double entendre there. We are All Going to Die is a play on the famous web3 catchphrase WAGMI (we are All Going to make it).
Gamification is something new in the NFT space. It breaks away from the tradition of PFP NFTs (profile pic NFTs) which has become increasingly seen as a source of investment. Many of those who purchase NFTs just to flip them have no interest in NFT projects except for the investment potential. This is not something that NFT creators see as being sustainable because firstly, there are already too many of such PFP NFT projects out there (and many more to come), secondly, the price of PFP NFT items is subjected to market forces entirely, and thirdly, there is no loyalty to the NFT project. It is all too easy to set up a PFP NFT project. PFP NFT project creators do not need any dev ops assistance any longer, thanks to the increasingly easy user interface on NFT marketplaces, the ease of hosting on-chain NFTs and the automation systems increasingly set up by NFT marketplaces.
NFT creators only need to generate thousands of variations of their NFT templates using illustration software and NFT art generators available online and pop them onto secondary markets and voila, a PFP NFT project is born. Gamification NFT creators, however, design an entire story around their NFTs and build engagement mechanics from the get go. This requires them to have higher order thinking, in terms of art direction, dev ops and branding. This in turn allows the NFT project to remain interesting for a much longer period than PFP NFTs.
