Will Blend have an impact on Web3 games?

Written by: apix

Compiled by: Shenchao TechFlow

The financialization of Web3 game NFTs has been a hot topic in the industry. Will the lending feature launched by Blur have an impact on game NFTs? Although it seems to have little effect at the moment, this possibility will increase as Web3 games develop and grow. Crypto researcher apix shares his views on this issue in this article.

Most people's first impression of this topic might be "lending has no impact on game NFTs," but since they are all NFTs, why is there no impact? Let's take a longer view:

But first, let me explain what Blend does:

1. Traders can use their NFTs as collateral to borrow ETH.

2. Traders can lend out NFTs at prices much cheaper than the minimum floor price.

Currently, we do have large game collectibles like Digi, Dimensionals, and Treeverse, and their floor prices may be very suitable for Blend.

But these are all genesis series. Once released, games will have larger ecosystems and cheaper NFTs.

Yuga has been doing this for a while—BAYC→MAYC→BAKC→Otherside →HV-MTL → Vessels.

There are over 200,000 items in the Yuga ecosystem, with the cheapest priced at $560. I hope they can go further and eventually make Yuga's assets very cheap. So, let's take a look at the main issues facing lending and game NFTs.

1. They are too cheap

No one will take out a loan for a $1 game skin and pay a 15% annual interest rate for it. This is unrealistic, and players won't be interested in it.

2. No lending based on the characteristics (Traits) of game NFTs themselves

Blur is optimized for traders, meaning each NFT is treated as a floor price.

There are no bids or loans based on traits. However, traits play a huge role in game NFTs. Different skins, land with resources, etc., have a significant impact on prices.

3. Chains and tokens

Another important issue is that Blur only allows trading on ETH.

But 99% of game collectibles have important components of their ecosystems on other chains, which have lower fees and better technical support.

Moreover, game NFTs are often of the ERC-1155 standard, which is also not supported by Blur.

For example, Otherside Plots have 1,804 different traits, and all Parallel Cards are ERC-1155.

Therefore, the lack of trait-based lending, support for other chains, and ERC-1155 excludes games from this NFT financialization. But there is one thing that changed my mind.

Blur clearly believes that NFTs will play an important role in our digital future, but we have already seen many discussions about PFPs, arguing that PFP projects will never have another boom. While I disagree with this, it is clear that there are currently very few participants in the NFT space.

This means we need a significant catalyst to increase attention, demand, and use cases for digital collectibles.

The obvious answer is games.

Games can be a catalyst for driving another wave of bull markets and mass adoption. Perhaps in the future, we will see Blur develop features like trait-based bids and multi-chain support because they don't want to miss out on Web3 games; they don't want to miss out on the upcoming 100 million to 1 billion Web3 gamers.

And there are real-life examples to prove this; we see Csgo skin values hitting new highs every so often. Players can also lend them out for a while… or gain some liquidity without losing their collectible skins.

These use cases make a lot of sense to me, which is why I believe that Blend and other lending platforms may also have an impact on game NFTs. Of course, in the short term, no Web3 game will become as massive as Csgo, but these things can also work on a smaller scale.

And Web3 degens might drive prices up due to speculation. This opens up space for products like Blend.

TL;DR

Will lending platforms like Blend have an immediate impact on Web3 games? ------ No.

Will this situation change in the future? ------ Possibly, if Web3 games perform well, this possibility will increase.