DeFi Kingdoms - March Updates
/DeFi Kingdoms, or DFK for short, is a gamified decentralized exchange platform that I have been following for several months now. I am dedicating this segment to DFK this month because there has been so much progress made in the last thirty days that I think it is both necessary and interesting to everyone on this call. Additionally, if you are interested in a deeper dive into the topic of GameFi I was also recently on a WTIA panel discussing this topic.
DeFi Kingdoms went live in August of 2021, and since then it quickly grew to become the largest project on the little-known Harmony blockchain. Since that time they have continually delivered on or very near to their roadmap, which includes features like NFT heroes that level up, the ability to trade, quest and summon new heroes, a yield farm, lands, and more recently a first-of-its-kind expansion. Pictured below is Serendale, the first DFK outpost.
Source: https://game.defikingdoms.com/#/
In early March the Perilous Journey kicked off. This was a one-time event in which DFK community members were able to send their hero NFTs on a dangerous quest. So dangerous in fact, that most of the NFTs sent were permanently destroyed (technically burnt by sending to the garbage address). The reason to participate in this event, and risk loss of valuable NFTs was that there were rewards for participating and any heroes that survived were permanently altered to become more powerful. This may seem like a strange way to describe an NFT, but in DFK NFTs are sort of alive in that they level up, go on quests and have unique features that make them sort of alive in a sense.
About a week after this event, the surviving heroes returned from the Perilous Journey (PJ) and this event marked the beginning of the in-game functionality that enabled players to move from Serendale (the DFK outpost on Harmony) to Crystalvale, the outpost on Avalanche. We participated in this event, and happily the rewards did outweigh our costs.
The expansion to the Avalanche chain was done in a novel way. Technically, AVAX has a feature called “subnets” which enable other networks to connect to AVAX with their own blockchain that they have control over. What DFK did was create their own blockchain called the DFK Chain. There are many important implications here. First of all, having their own blockchain means that DFK can use their own native token as the currency. This means that Jewel will now be used to pay transaction fees in addition to its other existing functionality. According to the team, as much as 50% of the Jewel used for transactions will be burned. This is very bullish for the long-term value proposition of Jewel as it flips the token into disinflation.
As the end of the month drew closer, the speed of announcements and releases accelerated. Avalanche had a summit in Barcelona and DFK had a very strong presence. Pictured below are Dreamer and FriskyFox from DFK.
Two new hero classes were announced for the new outpost of Crystalvale. These heroes have new genetics that can result in a third new class of hero that has yet to be announced.
That same day, it was announced that DFK was going to support Coinbase Wallet - which is an alternative to MetaMask.
Additionally, a crypto token that’s been given out to players in the game as a quest reward was revealed to have additional utility in the form of an upcoming zone called “The Hatchery” which will turn these tokens into NFTs. Essentially the eggs will hatch into in-game utility pets that heroes can equip themselves with that will boost their abilities in game.
Without skipping a beat it was also announced that a partnership was formed with BENQI that will provide in-game lending to the platform.
Still not content with the number of announcements, the team went on to announce that Ramp was integrating with DFK and it went live immediately. This enabled people to buy the Harmony ONE token directly inside of DFK using a debit card for the first time. Up until this point, buying Harmony ONE to play DFK involved using shady exchanges or making complicated bridging transactions. No more.
And the hits just kept coming as slides leaked previews of the upcoming combat system and Hero Duels features slated for the coming months.
And at the end of the month, Crystalvale did launch on schedule with only one slight delay as an overactive spam filter tried to meter the number of people bridging assets onto the new DFK Chain.
The art and music from the new zone are top-notch. At the time of writing the zones that are active are the Cradle, the Gardens, the Marketplace, The Docks and The Jeweler.
Source: https://game.defikingdoms.com/#/ (DFK Chain)
The tokenomics in DFK have always been compelling to me. With the Crystalvale launch things are even moreso. For example, in order to participate in the garden on CV, the tokens that are required are Jewel and xJewel. This pair is actually Jewel paired with a deposited version of itself and the payment is being issued in Crystal, the new power token on DFK Chain. One of the reasons this is interesting is that it means you can earn CV rewards without cashing out from Serendale. The tokens are bridged over to another blockchain, but the xJewel token represents balances held in the bank.
Even more interesting is the fact that the new Ice Gardens will begin issuing rewards for other liquidity pools with Crystal as the base pair. The supply of Crystal is only ¼ that of Jewel, and at the time of launch the overwhelming majority of the tokens will be unissued or locked. In other words, in order to capitalize on the Ice Gardens you need crystal which means you need Jewel, which means you’re long Jewel which means you’re long Crystal.
With APRs between 3,104% and 4,208% - it’s no wonder that these pools are quite popular. Bear in mind also that if the Serendale gardens are sold to bridge funds into the CV Ice Gardens, the rewards on Serendale will start to go up while the CV rewards decline. And if you compare the locked APR with the unlocked APR what you will see already is that gardens on BOTH outposts are compelling for different reasons. For example, if you can earn 4,000% APR but 95% is locked, or 200% APR but only 40% is locked, which option is better? It kind of depends on your time preference at the end of the day. If you are bearish, then rewards now are better. If you are bullish, then a locked balance is worth more because you can get it at a discount today.
In closing, I have been thoroughly impressed by the speed of delivery and the creativity of the DFK team. I don’t know what the gaming project will dominate ten years from now, but I do know that the future belongs to teams that just keep on building and investing back into their communities. As we move more into a highly connected future, projects that can bridge between chains and connect us are at least pointed in the right direction.
Thank you,
