DeFi Kingdoms: The Billion-Dollar Blockchain Economy Built on a Video Game

I thought about titling this post “How to Make $400/Day from a Blockchain Video Game,” or perhaps “The Decentralized Dungeons & Dragons Game for Aspiring Hedge Fund Traders.” Both titles would be accurate, though neither would fully capture the immaculate ecosystem known as Defi Kingdoms.

Today I present to you a review of an incredible online game. This game also happens to be a billion-dollar economy, or at least it was before a recent drop in all digital currency markets. Now it’s something like half a billion, which to me is still “a lot.”

The point is, it’s a video game you can play to earn real money—potentially a lot of real money—and it’s also a fascinating social experiment.

It’s Called DeFi Kingdoms: An Online Game with NFTs as Characters

If you have no interest in gaming, entrepreneurship, or sociology, I’ll save you some time: you might as well stop reading now.

For me, however, those three topics are the central compass point of my professional and personal life. When they converged for me through this game recently, I began losing many hours to it—and these were very happy hours! The time I’ve spent thus far has been a literal investment, not only in education and enjoyment, but also financial profit.

How much profit? Within a short time of immersing myself in the DeFi Kingdoms (DFK) world, I was earning $400/day at interest rates of 300% or greater.

These rates will drop as more people enter, but there are several other ways to make money with DFK. It’s both a short-term opportunity and (even better) a long-term investment.

Interested? Well, settle in, because it will be a long post. We’re going to cover:

• What DeFi Kingdoms is
• How it works
• Why it matters
• How you get paid

Before I go any further, you might expect a disclosure of some sort. See below. ⬇️

Disclosure: there is none! I receive no benefit from writing about DeFi Kingdoms, nor do I have any affiliation with the people who make it. It’s just an amazing thing that I wanted to share.

Okay, with that out of the way—let’s dive in.

What Is DeFi Kingdoms?

In short, DeFi Kingdoms is a blockchain play-to-earn game that uses RPG elements in a retro-art style with collectible NFTs, integrated with a decentralized exchange to trade digital assets. Let’s break that down a little.

Blockchain: that thing that made Bitcoin possible. Think of it like a record-keeping system that can never be reversed, only added to (“what happens on the blockchain stays on the blockchain”)

Play-to-earn: you play the game, you make real money (yep, that’s right, keep reading)

RPG elements: an RPG is a role-playing game, like Dungeons and Dragons from long ago, or World of Warcraft more recently. As the player, you control characters who specialize in various skills. They go on quests, level-up, and eventually go into battle.

NFTs: cool digital art that can only be owned by one person at a time. In this case, the NFTs are characters known as heroes. Unlike most NFTs, these heroes evolve and improve over time as they gain experience from quests (and later, battles)

Decentralized exchange (DEX): an automated bank you use to transfer different digital currencies, and that pays rewards for “staking” or depositing your funds

You can read about blockchain and NFTs elsewhere from people who are smarter than me. For our purposes, let’s delve more into the play-to-earn part.

Play-to-earn effectively begins with another game known as Axie Infinity.

Once Upon a Time in the Philippines

The play-to-earn (sometimes called pay-to-earn) subculture can trace its rise to a single game, Axie Infinity. At its peak, Axie had something like two million people playing the game at once. Many of them were in countries like the Philippines and Venezuela, where they earned more from playing the game than they could from available job opportunities.

I didn’t play Axie myself, but I thought it was pretty cool that so many people (especially in poorer countries) were making real money from it.

To learn more about Axie, check out this short documentary filmed in the Philippines during the first part of the pandemic. It has a very DIY vibe that I find charming. My favorite part comes towards the end, where an elderly shop owner couple talks about playing Axie all day when no one was frequenting their store. This is the future!

There was just one problem with Axie: the game itself kind of sucked.

I don’t want to knock it too much. It inspired an industry and the creators deserve a ton of credit for that. It’s just that, gameplay wise, Axie was kind of limited. (They might be fixing that this year with some forthcoming updates; we’ll see.)

So after that, along came a bunch of other games that tried to follow Axie but didn’t get very far. We won’t waste time covering them.

THEN along came DeFi Kingdoms, the first game that (I think) has real potential to take down Axie as the market leader. More importantly, I predict it will become an amazing resource and microeconomy for hundreds of thousands of people.

It’s already doing that for tens of thousands of people, many of whom are extremely engaged with it every day.

So to sum up: DeFi Kingdoms is a role-playing-game built on a blockchain, a collection of NFTs, and a decentralized exchange where you can earn APRs of 300% or more on real money. 🤯

Keep reading to learn more about each of those things.

How It Works (First, the Money Part)

Here’s an important thing to know: if you don’t care about playing an online game, you can still invest your money with DeFi Kingdoms and earn an APR of 300% or more. This is not a joke!

In fact, it’s how I got started. After hearing about it from a couple of different places, I deposited a few hundred dollars to see how it worked. When I checked back the next day. I had already earned more than a 1.5% return—which is crazy! Loan sharks don’t make that much.

Naturally, I started researching further while depositing more funds, and before long I was bringing in $400/day in interest. That’s when I got serious and started diving in even more.

The next image is a screenshot of one of the “gardens” you can deposit funds in. This one consists of two tokens, Jewel and AVAX, and so far players have deposited more than $41 million in it. This garden pays interest on the deposits at the annual rate of 341%. (Note: this rate will change over time.)

Granted, these investment returns are paid in Jewel, the token and currency of DFK. Right now about 55% of Jewel is “locked” until summer 2022, when it begins unlocking on a twelve-month cycle. The other 45% can be exchanged into any digital currency you want, including Bitcoin, Ether, or a stablecoin like USDC, which trades on a 1:1 basis with U.S. dollars.

Like I said, this is real money! You can use DeFi Kingdoms strictly as a decentralized exchange to earn extremely high interest on the money you already have.

What’s more, you can “claim” your earnings and re-deposit them as often as you want, even daily. This enables you to earn much more than the advertised APR, since you’re constantly increasing your initial investment.

As a quick example, imagine you deposited $1,000 in one of the Gardens that’s paying 250% APR (I’ll explain more about how it works further down). 250% is an incredible return on its own, but the compounding makes it even more amazing.

• $1,000 @ 250% APR = $2,500 in one year
• $1,000 @ 250% APR compounded daily = $12,079 in one year (1107% interest!)

If you have more or less money to deposit, well, you do the math.

How It Works (Now, the Game Part)

As I said, you can participate in the investment side of DeFi Kingdoms without doing anything else. However, the best way to experience DFK—and perhaps the best longterm investment strategy—is to get into the world of heroes, the NFT game characters.

Heroes are not cheap. Pricing varies by quite a bit, but at the moment you can expect to spend at least $500 on an entry-level hero. To play the game well, you’re going to need more than one—potentially a full guild of them, depending on your goals.

But you don’t have to make that sort of commitment at first, or ever. You can jump in and see how everything feels, and then decide if it’s for you or not.

Also, a good hero is going to level-up and provide ROI that far exceeds your acquisition cost. At least that’s the goal!

There are a bunch of “get started” guides that can explain these things in much more detail. I’ll link up a few of them at the end of this post.

There’s also an extremely active Discord (with more than 70,000 members at the time I’m writing this), a subreddit, and a ton of YouTube videos.

Warning: I’ve spent dozens of hours studying up on this topic. If you’re compulsive like me, be careful. It’s a rabbit hole like no other I’ve fallen into for a long time. 🙂

Play-to-Earn: All the Details

Alright, let’s get back to the money! As I said, even though DeFi Kingdoms is a fun game, it isn’t just a game you play for fun. Here’s what you need to know to make it a fun, PROFITABLE game.

Part I: The Bank

There’s an in-game bank, which serves as the simplest and easiest way to make money. You buy jewel, you deposit in the bank, you earn interest. You can take it out at any time with no fees or penalties.

At present time, the bank is paying annual interest (APR) of 24.59%. Does your bank pay that rate? Of course not, your bank is run by an evil corporation. They pay something like 0.25% or perhaps nothing at all.

Solution: fire your bank, deposit funds with DFK.

I keep whatever game funds I’m not actively using for something else in the bank.

Twenty+ percent interest is pretty cool. However, there are two other areas in the DFK ecosystem that are much more profitable, both in the short-term and with a longer-term perspective in mind.

Part II: The Gardens, AKA Liquidity Pools:

For a much higher return (that potential 300% I mentioned), you need to invest in the DFK Gardens. For those familiar with DeFi or crypto in general, the Gardens are liquidity pools. If you haven’t heard of liquidity pools before—it’s a little complicated. This article provides a technical description, and this one provides a quick little writeup.

Problem is, even the quick little writeup includes lots of other terms you might not have heard of, so let’s try this: liquidity pools make it easy for trading to take place on a decentralized exchange (i.e. something that isn’t Wall Street). When users deposit their funds in the DFK Gardens, they’re supporting the whole DFK ecosystem.

Accordingly, they’re rewarded with high rates of “emissions,” which are paid out in Jewel.

Did you get all that? If you didn’t, don’t worry. We could make it even shorter by saying: deposit money in the Gardens; earn lots of Jewel in return.

(A quick reminder: I have no affiliation with DFK. Also, I’m not offering financial advice, so always do your own research.)

You can also compound daily, which is even crazier in some ways. If you’re into finance, you probably know why daily compounding is such an amazing thing.

As noted in the example from the preceding section, a 100% annual return compounded daily is effectively a 1,000% annual return. This is why the difference between APR and APY is so important.

(By the way, fun fact: APY is how your credit card company will screw you over if you get behind on payments. Pay off your balance every month or stay away from credit.)

Part III: Heroes

You can earn with heroes through a few different ways. Each hero is randomly assigned to one of four in-game “professions”: gardeners, miners, fishers, and foragers. Each profession offers a different mode of gameplay and opportunities for earning.

Gardeners work in the gardens (shocking, right?) and come back with Jewel that they’ve earned for you. Rewards are based on a few factors: the gardener’s “profession level,” which garden you assign them to, and how much money you currently have staked in that garden.

Miners work in the mines (you didn’t see that coming!) and transform locked Jewel into unlocked Jewel. In other words, they make it so you can access more of your locked money sooner. If you don’t have much in the way of locked Jewel, you can tell the miners to mine for gold instead. (Gold can be used to purchase various items, or also just converted into Jewel.)

Fishers and foragers go out to bring back items. Most of the time the items are basic. Once in a great while you get lucky and they find something like an egg. You can resell eggs for around 50 Jewel, which at a $10 token price is worth $500.

Just to call out this point a bit more so you don’t miss it: your heroes can bring back a virtual egg that’s worth ~$500 on the resale market. You can hang on to it for future use (they’re going to turn into pets) or sell it right away. For real!

When one of my fishers found my first egg, I had put her to work early in the morning before going back to bed for a bit. Then I returned to the computer and saw that she had fished out a five-hundred-dollar egg for me while I was napping. Good work, fisher!

Finally, it’s possible to buy and resell heroes for profit. I haven’t got into that part of the game because I’m more interested in holding longterm, but if you’re into arbitrage, there’s definitely a market for it.

What I’ve Learned So Far

This section of grab-bag advice will be most relevant for people who are actually interested in playing the game. If you’re just reading the post to learn about DFK as a new phenomenon, you can safely skip it.

There are several different ways to focus your efforts in DeFi Kingdoms, and new paths are opening up all the time. It helps to pay attention to new features as soon as they’re rolled out.

When it comes to heroes, there are also a few paths to consider. If you can only afford to pick up a couple of them, it’s probably best to start with Fishers and Foragers.

Miners benefit players who have a lot of locked Jewel, and Gardeners benefit players with money in the LPs. If you’re able to put significant money in the LPs, it makes sense to focus on Gardening as a quest.

It feels very motivating to see your money “tick” up hour by hour in the Gardens! Once you experience this, even with a small amount, most likely you’ll be motivated to do more.

At first I was intimidated by buying heroes, but then I realized a) it’s the only way to actually play the game, b) they can actually be a pretty valuable investment of their own, and c) it’s fun! I have a whole collection now.

As mentioned, all of the heroes are NFTs—they’re unique. They can be leveled-up through quests. You can put them to work earning gold, more Jewel, or various items for you. You can then sell the items to a “trader” in the marketplace, or hang on to them for future use as more gameplay options become unveiled.

Personally I’m hanging on to everything (items, heroes, Jewel) instead of reselling. There’s no way to know for sure, but to me the future value of holding seems much higher than the present value of selling.

Sounds Great; What Could Go Wrong?

Of course, nothing is guaranteed, and we’re talking about real money here—so let’s consider what could go wrong.

First, these are new frontiers! Everything in the DeFi world (not just DeFi Kingdoms) runs on what’s called “smart contracts,” and those contracts involve risk. Protocols get hacked. Things go wrong. The team is very focused on security, but clearly a lot is at stake.

Even with good security, digital currencies often experience extreme volatility. What goes up usually comes down, and sometimes it goes back up, but not always. After reaching huge heights last year (17,000% growth!), Axie’s token has now fallen by a huge amount. The recent market crash that took Bitcoin and everything else down didn’t spare DeFi Kingdoms; the price of Jewel went from ~$21 to ~$7.

One more note, which may or may not be a concern to you: the developers who run the game are pseudonymous, meaning that they aren’t “doxxed”—most users don’t know their real identities. This isn’t totally abnormal in the crypto world, but of course it’s pretty strange elsewhere.

Consider the mind-blowing fact I mentioned at the beginning of this post: before the market dropped a couple weeks ago, DeFi Kingdoms had a billion-dollar market cap. Can you imagine a billion-dollar company run by executives named Frisky Fox, Professor Tango, and Pine Cone?

Well—imagine no further, because that’s what’s happening. It’s probably the Gen Xer in me, but personally I kind of like to know who’s running the show.

So to be clear, lots of things could go wrong. Nothing is without risk! It could all fall apart and the price of Jewel could drop to zero.

Alternatively, the price of Jewel could go from $8 to $80, and all the tokens you’ve been earning for months will suddenly be worth 5-10x more.

Imagine earning $400/day in Jewel, like I was able to achieve within my first week of exploring the game, and holding on to your profits instead of selling. If the price of Jewel so much as doubles, those original earnings would be worth $800/day or more in the near future.

So that’s not terrible! Do the math for yourself, compound out the earnings, and see how the forecast looks over a six-month period. Then do the math again because you think surely this can’t be right.

But it is.

Where to Go to Learn More

If you’re still reading this long post, you might actually be interested in diving in further. Or you might think it’s the craziest thing you’ve ever heard of. (Or wait… maybe it’s possible for both of those things to be true?)

In any case, if you’d like to learn more, follow these links and jump in:

• DeFi Kingdoms docs (basically the instruction manual)
• In-game tutorial
• Beginner’s guide and other posts by Samichpunch (very helpful!)

Overall, the Discord is the best place to learn. You don’t even have to participate if you don’t want to; just spend time reading and absorbing. At first, nothing will make sense, but you’ll understand more and more with each dive.

Conclusion

Like I said, nothing is guaranteed.

If you’re skeptical about a video game that makes people millionaires, I totally get it. After writing this long post, all I can say is: feel free to check back in six months and we’ll see who’s right. 🙂

Personally I think the more optimistic option—demand for Jewel goes way up, along with its price—is the most likely scenario. Either way, I’m all-in with this game. I wrote to my accountant the other day and told her, “This is either going to be huge or I’ll be very wrong.”

So that’s why I’m telling you too.

Whatever happens next, I’m having fun and enjoying the new frontiers of gaming as an economy. It’s a good time to be alive!

Now if you’ll excuse me, I need to get back to my fishers and gardeners…

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