Aavegotchi: What Are The potentials For This DeFi Cryptocurrency?
While the
Blockchain’s capacity to host videogames and collectibles is often touted, it
is rarely ever brought to fruition in any way resembling huge success. While
there’s yet to be a killer app in the gaming area for blockchain, a couple
collectible apps have made their mark in the blockchain world, particularly cryptokitties back in 2017.
The logic behind
Aavegotchi is, basically the same behind cryptokitties: Aavegotchies are
Ethereum-based Non-Fungible-Tokens that work both as collectibles and units of
value. Their creation, as happened with cryptokitties, is random – making all
creatures unique, but certain ones decidedly rarer than the others.
Wait, I don’t get it. What IS
this?
It’s hard to get
the logic behind Aavegotchi (and cryptokitties) at first, yes.
These types of
NFTs come from humanity’s tendency towards collecting, and our desire to own
shiny things (see: Gold for most of mankind’s history, or diamonds during the
last century.) These types of NFTs are usually pure luxury items, their value
more than anything speculative than reality-based: A rare cryptokitty is worth
a lot not because it has intrinsic value, but because some people out there
will pay lots of money for it.
The very same logic can be applied to Aavegotchi: These cute little spirits that we summon from portals are worth something because people out there will pay something for them… well, for the most part.
A mostly, but non entirely, speculative value
This “for the
most part” when speaking about Aavegotchi’s inherent value is a part of what
makes it stand out. Aavegotchies, as it happens, don’t just come out of
nowhere. There are two things that need to happen in order for a user to create
a new Aavegotchi spirit-thingy.
First, the user
must obtain a portal from where they can summon demons from the nether realm,
or whatever it is Aavegotchies are. These portals, as you probably expected,
cost crypto, specifically in the form of a GHST token. This alone already gives
every Aavegotchi out there an intrinsic value, although said value isn’t
guaranteed to be as high as the GHST token you paid for it, in the same way the
baseball cards you get from a pack aren’t guaranteed to be worth the cost of
the pack itself.
Then, once you
get your portal and open it, you get a choice of ten different,
randomly-generated creatures, each with its own looks, abilities, and
properties. Each creature costs a different amount of crypto to summon and, you
guessed it, the rarer your creature’s traits happen to be, the more crypto
you’ll need to stake as collateral to summon.
This gives
Aavegotchies a second degree of value: On top of the cost of the portal,
there’s also the amount of money staked to summon the creature and keep it
summoned.
Wait, staked? Or paid? Which one is it?
While it can
feel like a payment, the crypto you stake to summon a creature is just that,
staked. You can actually retrieve it at any time, either partially or totally.
However, if you
retrieve 100% of a creature’s staked crypto, the portal it came from will close
and the little demon will vanish into the ether.
Alright then. Why do we have to stake crypto for
this?
Because that’s what Aavegotchi is really about: Getting people to stake their tokens, in the same way they could stake them in other blockchains, but making it fun and collectible.
But why would I want this? Why would anyone pay
more for an aavegotchi than it originally cost?
Because humans
like to collect shiny things, as seen with every single collectible market.
Rare baseball cards are worth way more than the materials they’re made of. Coin
collectors can pay thousands of dollars for coins whose face value is less than
a single dollar.
Humans are weird
like that. We like having rare things, so we pay for them more than they’re
worth.
Oh, also,
there’s the whole traits thing. That’s where a good chunk of the speculative
value comes from.
Why do traits matter?
You remember how
the crypto you use to summon an aavegotchi is staked? Well, there’s this thing
about staking cryptocurrencies: It’s supposed to give people back earnings as
collateral. It’s the whole reason why people stake to begin with.
Rarer
aavegotchies will have higher amounts of crypto staked – and, the way staking
works, the more you have staked the more crypto you’ll receive. This means that
rarer aavegotchies, and aavegotchies with more staked crypto, will return
higher yields than lower-tier ones.
And then, for
the last value-affecting part, is the game portion of it.
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You can also play with them?
Yes, there are
mini-games you can play with your aavegotchies. And the better traits and
equipment they have, the better they’ll perform. Different traits and equipment
will be better suited for specific types of games, so if you want to do well in
them all you’ll need a whole team of them.
Fine, that sounds fun. But will this work?
It might, or it
might not. The interesting part here is how much it could boost gaming in the
blockchain if it works.
There are plenty
of videogames that form competitive communities. These communities are
dedicated, and often they host events with actual cash prizes. If one of the
games you can use your aavegotchi in were to become big, and generate an
e-sports communities around it, the aavegotchi that are good at that game would
inherently receive a huge value boost.
Then, there’s
the way these cute little NFTs entice people to stake, rather than hold, their
crypto. Having many people staking is good, because it gives the blockchain
more processing power to power its inner transaction. In other words, more
people staking means the blockchain becomes more scalable, and thus faster.
It’s yet to be
seen whether Aavegotchi will become a thing, but there’s already a decent
amount of hype around it. While it might be wise to buy into it, this is
definitely a project to keep an eye on.
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