DeFi Kingdoms 👑

Where gaming meets finance

I have been very excited to pen this piece for you as I only learned about DFK around Thanksgiving. New comers to the game will be pointing and shouting, “WHALE!” 🐋 right about now, but I am far from it. When I discovered the game, JEWEL, the native token of DeFiKingdoms, was trading in the $5 to $7 range. Sure, today it is oscillating around $20 like a buoy slapping the waters of Willapa Bay, but savvy GameFi enthusiasts entered at a price far, far below $5. And good for them! It’s always amazing to see early adopters get rewarded for their belief in a project. Just think about all the other crypto opportunities they were watching soar around them while waiting for DFK to take off. 🛫

Welcome to the Kingdom! 👑

Is it too late to get into DeFiKingdoms? That depends on what your goal is. If you are looking for a moonshot 100x then you’ll probably want to look for yet to be developed projects that are either pre-token launch or extremely nascent in their lifecycle. Stay tuned for future editions where I’ll be bringing a few sticks of potential alpha dynamite 🧨 to you. However, if you are looking for enjoyment out of a classic 8-bit style game in the spirit of Final Fantasy or the Legend of Zelda while also getting paid to play, then I think you have come to the right place.

You read that right, this is a play-to-earn game. I’ll tell you right up front that it will require money to play. This is considered GameFi, which is the lingo for the gamification of finance. The wrapper on top that you see is the world of DeFiKingdoms in the realm of Serendale. This game exists on the Harmony blockchain so all your transaction fees and best way to onramp to JEWEL is going to be through their on-chain token: ONE, which currently is trading in the $0.27 to $0.33 range. Since ONE is such an inexpensive token that means that your transaction fees (often referred to as gas fees) are roughly $0.0001 to $0.001. That’s right, that is not a typo. You are paying a fraction of a penny in fees compared to the bulk of the play-to-earn games that exist on the Ethereum blockchain where the price of ETH is ranging from $3,000 to $5,000.

How much do I need to start playing? That depends. I know… you probably loathe that answer, but it’s true. Do you want to get into the gameplay with a Hero NFT (Non-Fungible Token)? Or do you want to simply be an investor in DeFiKingdoms and take advantage of the rising price of JEWEL?

If you are wanting to be a gamer and earn money while questing, then you are going to need a hero:

This is where I get to flex a little bit and enjoy the fruits of my labor. What am I talking about you ask? Well… there are five different rarities of heroes: common (grey), uncommon (green), rare (blue), legendary (orange) and mythic (purple).

I don’t have any mythic heroes or else I would have gladly shown that off, but I did summon this fellow right here and I’m awful proud. Not just because as the rarity increases the statistics of the hero go up, but also the value. So as an investor in the game and from the play-to-earn perspective Galaric here is solid ROI (Return on Investment)—if I were to sell him of course.

Where would you go about doing that? Well, I’m glad you asked.

Let’s kick in the door to the Tavern and explore. For those of you who paid close attention to the map shared earlier you noticed that there are a number of different areas within the realm of Serendale that you can explore. Simply click the name tag of the region you want to explore and you will be whisked away into that area. In the Tavern you can buy, sell, hire or rent out heroes, and you can view the catalogue of heroes browsing the entire heritage of heroes summoned into Serendale. The most valuable of these are the Generation 0 heroes, or Gen0. I won’t go into the full game mechanics in this edition of DFK, but in future editions I’ll dig deeper for those interested. Today, we’ll just do some window shopping.

Once you’ve bought your Hero NFT, which you own entirely and can do with as you see fit, you can try and re-sell it for a quick profit, run it through some Profession quests to earn in-game rewards (You can earn JEWEL by questing or sell your rewards for JEWEL), or breed it with another hero at the summoning Portal. Coming in the near future there will be PvP (Player versus Player) and PvE (Player versus Environment) challenges and quests too. These game dynamics haven’t been built yet, but thus far the DFK team has NOT disappointed in the quality and speed with which they are expanding the ecosystem.

What if I don’t want to play the game with a Hero NFT, how else can I earn money?

Plant some seeds in the garden!! Huh?

There are three ways outside of buying a Hero NFT to earn JEWEL, which if you recall is trading around $20 per token: (1) buy the JEWEL token and HODL it as it appreciates, (2) visit the Bank and Single Stake your JEWEL for additional yield on that token you just bought in option 1, or (3) take your JEWEL and create a LP (Liquidity Pool) pair in the Gardens with a second token of your liking. I’ll provide a VERY brief overview of these options as I could write an entire article on this section alone—I just may.

When you put your JEWEL in the Bank you are actually exchanging it for another token called xJEWEL, which is the governance token of DFK. This actually removes JEWEL from circulation, which in turn helps the JEWEL price appreciate. Your reward for doing that is that you will earn a percentage of all of the transaction fees for in-game transactions AND it makes you eligible for some juicy airdrops, which is lingo for free stuff given to holders of the governance token such as those Gen0 heroes I mentioned earlier. In fact, right now there are snapshots being taken daily for xJEWEL holders and they will be rewarded with not-yet-minted CRYSTAL tokens, and a chance at new Gen0 heroes, both of which are going to be used in the first expansion of DFK across blockchains to the Avalanche chain. Transaction fees in the Crystalvale expansion will be paid in their native AVAX token, which currently trades in the $78 to $123 range—I suspect it has been more volatile as of late as those AVAX whales 🐋 are learning about DFK and buying some ONE, which if you recall trades for ~$0.30.

Back to the gardens and those LPs. I won’t go into DEXs right now, that is fodder for another day, but in Decentralized Exchanges, or DEXs, the source of liquidity to facilitate trading comes from large amounts of capital being parked on the exchange. Why the heck would you do that? Well… the exchange will reward you with a steady stream of tokens as a percentage earnings of the trading fees in that pair. What percentage? Let’s take a look at my JEWEL-ONE LP pair that is currently providing a juicy APR of 461.3%. 💰 😎

I won’t go dive all the way into the LP rabbit hole, but I feel obligated to mention that a key aspect to be aware of when getting involved with anything offering such an insane percentage return is to understand how solvent the provider of that yield truly is and how volatile the underlying assets are that you are locking into that liquidity pool. In order to discern solvency you want to look at the TVL or Total Value Locked into the DEX or protocol offering the yield. In the case of DFK, the TVL is an impressive $1.1bn. To put that in context the kingpin of DeFi TVL is Curve with $22bn. DFK ranks in the top 50, which is astounding considering they only just launched and their marketcap to TVL ratio is top 5 so they are punching way above their weight class. A true force to be reckoned with.

How should I interpret this information?

With such impressive numbers DFK is soaring up the ranks of all of the DeFi leaderboards and garnering more attention from those enormous marine mammals with giant mouths ready to swallow millions of tokens in one fell swoop. It seems inevitable that DFK will continue to see their marketcap rise, but let me provide you with an analogous comparison to the #1 play-to-earn game by size: Axie Infinity. Their AXS token peaked at $164 on November 7th and perhaps not so coincidentally the JEWEL price has gone from just under $4 on that same day to roughly 5x that today. Where does AXS sit today? ~$75 or less than half where it was at its peak exactly two months ago.

Axie remains the #1 play-to-earn game by marketcap, but not by recent volume. That award 🏆 goes to, you guessed it:

Let us dream for a moment at would could be. What would the price be of JEWEL if DFK if it were to see its ~$1bn market cap grow to that of Axie?

So, are you late? Is DeFiKingdoms still a good investment with ample upside compared to the risk? What else is on the horizon for DFK? You have to answer these questions for yourself. Be the captain of your own ship. I am merely your guide as you set sail in the rough open seas of the Metaverse.

Thanks for stopping by The Metaverse Illuminated, I trust this edition has brought more to light for you. Remember, you call the shots, take what works for you, discard the rest.

If there are specific topics that you would like me to address you can get in touch with me through substack, via twitter @tmifma or email me at tmifma@gmail.com. Stay alert for the next edition of TMI.