On Thursday, March 5th, NeoFish participated in Neo Global Development’s (NGD) English Neo Live event. Neo Live is an Ask Me Anything (AMA) style community event that took place through a video interview with NGD.
NeoFish co-founder and gameplay designer, Ying Liu, joined the AMA with NGD blockchain engineer, Longfei Wang, where the pair discussed non-fungible token (NFT) and fungible (FT) token assets, the NeoFish game and NFT in-game economics, the history of the NeoFish projects, next steps, and more.
A transcript of the event can be found below:
Longfei Wang (NGD blockchain engineer): Hello everyone, welcome to Neo Live webinar! This is Longfei from the NGD R&D team, and I want to thank you for participating in our live session.
Neo Live is a series of live talks in which we invite NGD core members, ecosystem project leaders, the Neo community, and other blockchain experts to join the session, and share the latest technology developments and leading industry insights with our communities.
Our session today will have two parts: in the first 45 minutes, Ying and I will dive into the topic of non-fungible tokens (NFT). And in the second part, we will answer questions from the audience.
Today we are very excited to have Ying Liu, co-founder of NeoFish, to join us here to share her knowledge and insights about NFT and what it will bring to the blockchain world. Hi Ying, thank you for joining us today.
Can you start today’s session with a little introduction about you and NeoFish?
Ying Liu (NeoFish co-founder): Hello everyone, and thanks to Neo Live for inviting me. My name is Ying, from the NeoFish project and I’m one of the co-founders of NeoFish.
About myself, I’ve been working for 15 years in the game industry as both programmer and gameplay designer for online leisure games. Now I am responsible for gameplay and token economic system design of NeoFish.
NeoFish is a financial and leisure game based on the Neo ecosystem. In NeoFish, NEO is the main currency in circulation, which means players use NEO to invest and to exchange assets in the game and as well gain rewards in the form of NEO. We also issued a NEP-5 token, NFISH, that you can use to play the game.
NFISH is the token we are going to distribute in our airdrop today.
Longfei: NFT’s have caused a sensation in the cryptocurrency market over the past two years. I’ve been hearing that “NFT is redefining games,” and “NFT is a natural fit for encryption applications,” and I think many blockchain enthusiasts have been very convinced.
After the movie “Ready Player One” came out in 2018, some people who believe in blockchain and NFT were very curious and excited about what the future of the digital world might look like. But for those new to blockchain, the concept of NFT may still be mysterious and hard to understand.
Could you share a bit of your understanding and thoughts regarding NFTs?
Ying: The NFT concept might sound a bit puzzling, but it is quite simple. If the fungible token (FT) asset corresponds to the real world’s currency, then the NFT asset corresponds to the real world’s commodity.
For example, if you own dollars, each dollar is the same, and the only thing you care about it is the amount. Whereas, if you own houses, they might be situated in different cities, be different sizes, and built with different materials, amongst other variables.
So the value of each of them varies. The dollar is a FT asset, and houses are NFT assets.
Longfei: Ying’s explanation is right to the point. Like she just said, FT is similar to currency, it means it can be easily replaced by something identical.
What’s interesting is that the NFT world is quite different from FT, such as Bitcoin. Unlike Bitcoin, a non-fungible token is a unique piece of digital property.
Recently, I have seen news saying part of the European football championship 2020 tickets are going to be tokenized as NFTs. Those NFT tickets contain unique information (such as name, seat number, game time), which makes them not interchangeable.
It is interesting to see NFT appearing and adapting to blockchain technology. I am just wondering and curious why we need NFT assets. What do you think, Ying?
Ying: As we know, the Neo project is not just a technology-based public chain, it is also a fundamental platform of a smart economic system.
FT assets such as NEO and GAS serve as circulating currency, and a sound economic system cannot consist of only currencies. It also needs a commodity market.
When more FT are circulating in such internal markets between FT and NFT assets, less FT liquidity will be provided on external markets between FT and fiat or other cryptocurrencies.
Furthermore, NFT assets with preservation or appreciation properties can act as collateral to establish internal financial markets. Therefore, the creation of NFT assets is significant for a cryptocurrency economic system.
I agree with what you just said about NFT. Given the quick evolution of NFT assets, what impact do you think NFT will bring to FT?
Ying: Internal NFT markets can lock up the liquidity of FT from external markets. It’s like a sponge absorbing FT. And the more active the dApps with NFT markets are, the higher the FT price can be expected, so it amplifies the market cap of a certain cryptocurrency.
How significant is blockchain technology to the development of NFT?
Ying: Well, it reminds me of the old and most frequently asked question: what is the meaning of blockchain? Yes, NFT and FT assets can be stored on a database of any institution. But the value of all these assets is completely limited by the credibility of that institution.
In other words, the value of these centralized assets is decided by how many people believe in their existence. It costs too much to maintain this trust on the centralized internet.
In my opinion, the emergence of blockchain provided a chance to make virtual assets exist almost objectively at a lower cost, including both FT and NFT.
Longfei: Without any doubt, blockchain is the right technology for managing digital assets of all kinds, primarily due to its features, such as security and immutability.
Before blockchain, digital assets already existed, such as gaming assets and loyalty programs, but how about digital ownership? We all have owned all kinds of digital assets, but users never truly retained ownership of their data. I think this is when blockchain comes into the picture, to return the ownership to users through decentralization and immutability features.
Another aspect is the scarcity of NFT, which is no longer guaranteed and verified by a centralized third party, but a decentralized blockchain.
The economic model of NeoFish has been advancing, which makes it a playful game for users. I believe your team are experts in making a game and in-game assets valuable. Therefore, can you give us your insights on how to make NFT assets in blockchain games valuable?
Ying: To make a NFT asset valuable, either have it correspond to a real-world commodity or service, or create value in a virtual world. The former involves the topic of security token offerings (STO), which is beyond the scope of our discussion today, while the latter happens every day in online games.
So, it is easy to think of turning game props into NFT assets. As a result, a large number of blockchain game projects have been released in the past few months. However, the life of most of them is extremely short, let alone the appreciation of NFT assets.
By the way, NeoFish has been in operation for more than 300 days!
Longfei: Wow, how time flies. I still remember last year, we gathered several great blockchain games together in Beijing and talked about the future of blockchain games. That was the first time I met your team. Now, 300 days already. Congratulations to you and your team.
After 300 days of NeoFish in operation, do you still believe the blockchain game is a good way to assign value to NFT assets and make them more valuable?
Ying: After analyzing many failed cases — unfortunately, there are no successful use cases that we could refer to — we believe that NeoFish is still on the right path. Mainly because it has taken the following three actions.
First, value preservation. The collectible value of the props assets in NeoFish is greater than the practical value. We have noticed that many teams choose games with strong adversarial themes to design NFT assets. The long-term stable operation of such games requires constantly replacing the old props with new props. All assets compete for value in one dimension, which is a fundamental contradiction with the need to maintain the value of NFT assets. For casual games with a collection goal, each item has its own unique value, which greatly improves the value preservation and even the potential of appreciation.
Second, scarcity. We also noticed that some teams are trying to transplant light social games to the blockchain. Such games are simple and easy to acquire users, but due to the lack of game mechanisms, props can be easily created without scarcity and can not become a truly valuable NFT asset. NeoFish has designed two kinds of scarcity for NFT assets. The fishbowl is absolutely scarce. It has a total of 20,000 units, and there will never be any more issued. The fish is also relatively scarce. The birth of each fish requires time and resources. The more familiar with the genetic rules, the easier it is to obtain excellent offspring fish. The value of a fish is coined from three resources: funds, time, and attention. Just as proof of work (PoW) guarantees the scarcity of Bitcoin, this design guarantees the scarcity of NFT assets.
Finally, profitability. Game props can become NFT assets, and game rules need to be designed to have a positive correlation with game rewards. The fishbowl assets in NeoFish are a necessary condition for mining, but the output ratio of cryptocurrencies is distributed according to the computing power of the fish raised in the fishbowl. Both of which are strongly positively related to the income, so that the fun and finance aspects of the game can be tightly bound together.
You just mentioned that you have analyzed many failed cases. On the other hand, there are some blockchain games using NFT, which got lots of attention in past years. Based on your experience and analysis, what do you think makes them stand out?
Ying: Indeed, there are several survivors among the blockchain games mentioned above and NeoFish is just one of them. These projects are mainly divided into three categories: virtual world, card battle and collection game.
Virtual world is the category with the most imagination but the most difficulty to build up playability. I know some teams are dedicated to exploring economic models of the virtual world. Anyway, their lands were sold at good prices. Investors love the concept in the movie “Ready Player One” so much.
Card battle is a niche market as a game category but is the most playable one among the three, and card is also a good NFT asset, collectible, scarce.
Collection games like NeoFish is half financial and half playable. It’s an entrance gate from investment to the game.
It’s still too early to say who is the winner, because to test the rationality of gameplay design, we need a nonlinear increase of users. It is still impossible with the blockchain market size today. So we are all on the road.
Longfei: Thanks Ying, for sharing your opinions. I also would love to talk about a few projects I find really exciting.
Decentraland: Ethereum based virtual world, which was publicly launched on February 20. In Decentraland, players can build their avatar, and then explore the virtual world with a lot of varieties of NFTs, land, art or even real life commerce and trading. According to NonFungible.com, Decentraland has sold their NFT land for more than $160,000, which proves player curiosity about the virtual world through blockchain games.
CryptoKitties: Obviously, I have to mention it for its innovation and creativity. As the first blockchain game using NFT, CryptoKitties got attention from players and blockchain users that led to congestion on Ethereum.
Enjin: As the proposer and author of ERC-1155. Enjin’s vision is to give players real ownership of the game assets. Also, Enjin envisions not limiting assets to a single game, but to flow through the multiple universes. According to DappReview, there are around US $1.3 million of equivalent value tokens locked for creating NFT assets in Enjin.
I believe NFT is very suitable for blockchain games. But these are just my thoughts as a game industry outsider. Fortunately, we have Ying, an expert here with us today.
What do you think are the benefits NFT assets in blockchain can bring to users? What changes or impact do you believe NFT assets could potentially bring to gameplay?
Ying: I’m not an expert. I’m just an explorer. I like Enjin’s ERC-1155 proposal. In my opinion, when you invest your money on a cryptocurrency, you don’t expect to spend it.
But playing traditional games is about consumption. To resolve this contradiction, it’s a better way to stake than to purchase for players to get NFT assets. It is less risky. So, I think the main change blockchain or NFT assets will bring to gameplay is to make it more investing than consuming.
Longfei: Today, our topic is mainly focused on NFT assets, but there are loads of exciting and new technologies that blockchain offers, such as DeFi, cross-chain, sharding, and oracles.
Do you see any ways in which these technologies can benefit from NFTs?
Ying: Sure. First one is DeFi. NeoFish not only newly added 2,000 NEO into mining pool and prize pool, but also imported staking as an entry method. NEO holders only need to pledge the corresponding amount of NEO for a certain period of time to obtain NFT assets, at no cost, and participate in the game competition. In the future, we will also introduce new DeFi mechanisms, such as NFT rentals, NFT mortgages, and other financial gameplay around NFT assets.
Second is cross-project circulation. Imagine that the super high-powered fish you breed in NeoFish can be deposited in another fishing game to earn cryptocurrencies for you, or become your minion to help you in another battle game?
NFT assets on the blockchain can be freely circulated between different projects. This is not technically difficult, it’s just that we are in such an early stage of the whole blockchain game industry. When the industry matures, NFT assets circulation across projects will become the mainstream, because this will be the best solution to migrate users from an old game to a new game.
And a third one I can think of is the STO. It’s the mapping of a real-world property like real estate, artwork, or company equities on blockchain. If in-game NFTs are the assetization of virtual world data, this kind of NFT is the digitalization of real-world assets. Since you can define the total amount of the tokens representing the real-world property, it tremendously increases the liquidity of this property. It brings to the financial market a lot of fresh blood.
Based on what you just said, if we want to move towards that kind of virtual world, what do you think are the biggest obstacles and challenges for NFT and blockchain in the future?
Ying: There are plenty of challenges. But first of all, is the acceptance of the public.
Blockchain and every concept concerning blockchain is too abstract for people to understand. It’s the main barrier for dApps to acquire non-blockchain users.
On the other side, most blockchain users are concentrated on exchanges and only a few want to try to invest in NFT assets.
Longfei: To achieve interoperability for NFT, I think NFT standards are very important to help to move NFT assets easily across different game ecosystems or platforms. Because it provides the guidance of standardized ways to interact with basic functions and features of asset data.
ERC-721 — the first NFT standard — describes the basic attributes and behaviors to create, trace ownership, and exchange NFTs.
And then there is ERC-1155. It is more like a class of assets that aims to improve the efficiency of NFT transactions and lower the cost. ERC-1155 supports various types of token transactions, as well as sending multiple NFTs to one or more recipients in one transaction.
Therefore, I believe the development of NFT and corresponding standards play a crucial role in the future for NFT and their cross-chain circulation.
When we talk about blockchain, it is always related to the vision of the future and virtual worlds, and how to slowly turn those visions into reality.
Can you share with us any bold predictions for the virtual world’s economic model in the future?
Ying: Due to marginal costs, the relationship between producers and consumers in the real world is the exchange between currency and commodity, which is called a purchase. Whereas, the most valuable thing in the virtual world is attention.
Can we purchase attention? Yes. Most of the information you can see today on the internet is paid by their owner to be pushed on your screen.
But who is charging? Massive platforms are the owner of your attention, so they are charging. It doesn’t sound like a fair exchange, right?
So, let me design another model.
Content producers can run a supernode on public chains like Neo. They attract currency holders with their content like games, videos, books, and so on. To join in and establish economic relations with the users, blockchains utilize the staking of FT assets.
Both of them can jointly obtain the delegated proof of stake (DPoS) reward of these staked cryptocurrencies. Thus the activeness of the supernodes reduces liquidity on secondary market, and the price of the currency then rises, bringing benefit to the whole community.
Among them, the cryptocurrency staked in-game NFT assets will be an important component.
Longfei: I would love to see how NFT and blockchain could provide a secure and immutable way of issuing and store personal documentation, especially identities.
No matter how many security measures are being taken, our personal data is always at risk and identity thefts can still occur. A better system is needed for handling identity information. With NFT and cross-chain protocol, it will be interesting to see personal ID breaking boundaries of countries, enabling the sharing of all the ID systems across the world.
Is there anything else you would like to add that we haven’t discussed?
Ying: Ok, let’s think like a philosopher. What is the nature of cryptocurrency?
Cryptocurrency aims to build up a sound financial system on the internet. From decentralized issuance, to decentralized transactions, to various decentralized financial derivatives. It was born to partially replace the financial system today, which is based on the fiat system.
Currently, it can only be said that the first step has been achieved: decentralized issuance. The rest is basically in the experimental stage under a centralized architecture, and we have a long way to go.
What is the nature of finance?
In cryptocurrency exchanges, we trade billions of dollars every day. What are we doing when we trade? We observe, we formulate strategies, we invest funds, and we get results (either profits or losses). This is essentially a game. And, this game objectively forms the basis of the market value of cryptocurrencies.
What is the nature of games?
If an exchange is viewed as a game, then there are plenty of games on the secondary market. So, why do we develop blockchain games? Because we need to build NFT assets, which are possible only in more complex game rules.
To sum up, I would say: The nature of cryptocurrency is finance. The nature of finance is games. The nature of games is NFT assets.
At last, don’t forget to join in our airdrop and giveaway in NeoFish!
Can you tell us more about the airdrop? How will we get it?
Ying: First, you can join the NeoFish Telegram channel. And details for collecting the Neo Live airdrop will be posted there later.
As you mentioned, NeoFish will mentioned staking, loaning, and so on. Does that mean that NeoFish is building a DeFi world within the gaming world?
Ying: A DeFi world, inside the game? Yes. We are both a DeFi and game application. You play, and you earn.
Is there a timeline for when NeoFish assets will be put on chain?
Ying: Good question. Yes, we are off chain right now, because the technology of blockchain today isn’t mature enough for us. As we’re a cross-chain project, we’ve mixed a lot of public blockchain projects, and we act as a supernode of all these chains. The only method we can technically use is a centralized one.
But, when the technology is mature enough, we’ll be able to put all assets onchain.
May I ask you to share some of your favorite NFT’s besides NeoFish?
Ying: For me, because I’m active in the Chinese projects, there is one virtual world project I like a lot is NeoLand. I like their efforts in economic model design. They’re doing it progressively daily, and I can see their progress.
On which blockchains does NeoFish operate on?
Ying: It’s already on the Neo public chain. And NeoFish is previously derived from our main project, FishChain. It’s running on Ethereum, Elastos, and IOST. We’re a cross-chain, hybrid token.
What are the plans for NeoFish?
Ying: First, DeFi. Second, to move assets on blockchain in a decentralized manner.
Can you share a little bit about your team members?
Ying: They’re all guys, we have a team of six that work all over the world. We don’t share physical space. I’m in Canada, and the rest of the team are working in China and Australia. Our team is decentralized.
Is there anything that you really want Neo to improve on?
Ying: I heard that Neo is pushing Neo3 live. The only thing I hope Neo will do is more friendly DPoS features. Projects like us can act as a supernode, and we can get DPoS rewards from our stake.
Note: Some edits have been made for formatting and readability.