Crypto winter and the frequency of GameFi project failures in the second half of 2022 have shaken the Crypto community’s confidence. The difficult market is where conquerors with innovations are born, and Real Yield is used by many parties for its products, including ROFI Games.
Real Yield in traditional finance is defined as nominal return minus inflation. Consider the following: If a bond yields 8% and inflation rises to 7% over the bond’s life, the Real Yield is 1%.
The high-yield component of decentralized finance has come to an end in an age where risk is always calculated to be minimized. The market requires new trends and solutions from projects with sustainable elements, and the term Real Yield, which was previously only used in traditional finance, has now been pushed into the decentralized financial market with many new opportunities.
Real Yield in DeFi
During the recent uptrend period, the decentralized financial market saw significant leaps from various projects. Protocols were quickly profitable during these boom years, but they quickly fizzled out when the downtrend arrived, rendering the above miracles merely a demonstration of project development under an economic model. unsustainable.
As we all know, the revenue generated by projects cannot always offset inflation for a variety of reasons. As a result, it is normal for a project with many users and a dizzying growth rate to lose money. And, in particular, financial protocols such as Farming with attractive APR and APY levels in previous years have been a double-edged sword, causing many users to fall into the “rat traps” that have been set up.
APY refers to the amount of interest earned on your savings and APR is how much interest you owe.
APR, which stands for Annual Percentage Rate, is the interest rate on an account plus any fees you’ll have to pay. It’s calculated on a yearly basis and shown as a percentage. APY, which stands for Annual Percentage Yield, is the rate you can earn on an account over a year and it includes compound interest.
Following the DeFi summer, the crypto industry is now convergent on a new niche. Like most other segments before it, it is covered by a new concept: “Real Yield”. The term refers to protocols that encourage token ownership and liquidity mining by sharing fee profits.
Real Yield = Revenue – Token Emissions
Revenue is the revenue of the project, Token Emissions are the number of tokens that are rewarded through Incentives for users.
The Real Yield concept assists Defi in breaking free of the “free money printed out of thin air” mentality. Instead, protocol DeFi projects must devise more long-term methods of generating revenue from protocol activities.
Transaction fees on AMM and Derivatives protocols, Platform Fees on NFT Marketplaces, and Borrowing fees on Lending protocols are examples of popular business activities that generate a sustainable source of yields for DeFi protocols.
Applying Real Yield to GameFi
Before paying Tokens to users for Incentives activities, projects using the Real Yield model must generate a large enough revenue, which necessitates the provision of products and services outside the market. It must have sustainability, real utility, and real profit, and bring value to the community.
The emergence of this keyword aids GameFi in balancing the two concepts of Game and DeFi, which have previously been skewed toward Incentive factors in finance. Released games must be attractively designed from the gameplay, have unique features, meet users’ entertainment needs, and entice them to return to the game multiple times.
Therefore, GameFi projects that use the Real Yield model require carefully selected products that meet utilities and entertainment needs, as well as an appropriate release and event strategy. This gives game developers and studios an advantage because their internals and experience allow them to capture game trends and select products before bringing them to DeFi.
