Research summary:
This research report is focused on “Enjin” which solves major issues in the gaming industry. We will focus on how the project works, what value it adds, and review its pros and cons. The CMP is $1.71 as of 8th October 2021.
What is an NFT?
NFT stands for non-fungible token. The non-fungible aspect signifies its uniqueness and such tokens can’t be replaced by anything else. For instance, the US dollar is fungible, which means that one USD isn’t unique and can be traded for another USD. For example, I borrowed 1 USD from my father. When I pay him back, I can send him any USD and not specifically the USD that he gave me. While on the other hand trading cards, art, collectibles, and more are non-fungible. For instance, a Ronaldo Trading card is not the same as a Messi trading card.
An NFT’s uniqueness is authenticated by the blockchain it is on. People started to apply the technology to authenticate uniqueness to digital art thereby creating a whole new world of digital arts and collectibles.
The above digital art was bought by Metakovan, a south Indian Bitcoin billionaire for approximately $70 million. Although I have attached a copy of the art above, he is the sole owner of the artwork and this is confirmed on the blockchain.
Video games are also another massive driver for the NFT industry. A virtual economy is essentially a system of online jobs, assets, marketplaces, and traders which has emerged across a range of online platforms such as Minecraft, SecondLife, and Decentraland. There is a virtual currency within these virtual economies, which is used to buy and sell in-game assets (such as land, houses, weapons, vehicles). Currently, within the centralized games, all the assets are controlled by the company and are siloed. NFTs can solve this problem.
During the pandemic, virtual economies have been exposed to over 2.5 billion people and it is expected that approximately $129 billion worth of digital game spending would occur. It is safe to say that the NFT space is not only soaring but also has a lot more potential than expected.
What is Enjin?
Enjin is a project that operates in the gaming industry (a multibillion-dollar industry) and the NFT industry which is also booming. It enables players to tokenize virtual items (or in-game assets) and get complete control over them, rather than having them in a server, which belonged to someone who could decide to shut everything down.
It is Ranked #78 (based on Mcap) in the cryptocurrency market. The maximum supply is 1 billion tokens out of which 0.83 billion tokens are in circulation. It is currently listed on Binance, Coinbase, and Upbit.
What problem does Enjin aim to solve?
The gaming industry, which is worth more than $300 billion dollars, which is more than the music and movies industry combined (Accenture report) has approximately 2.7 billion gamers
With such a huge market, there is a huge problem and it is “in-game purchases”. An in-game purchase essentially means items that you can purchase within the game universe. These items (such as the costume your avatar wears, the design of your car in a racing game, the design of your weapon is a shooting game) can be easily bought on the game store.
But the purchased items don’t leave the game and with newer releases and versions, lose their importance and value over time deeming them redundant.
To illustrate this, the cost of a knife in a popular game known as Counter Strike: Global offensive is worth $20,000. If the Counter strike decided to remove the knife from their game, the person who bought it would start pulling his hair out. And there will be nothing he will be able to do about it
According to the whitepaper, fraud is a very common phenomenon in the in-game virtual item space. So the game developers have to deal with scammers and also make sure that they don’t hurt the game’s reputation.
What value does Enjin bring to the table?
Enjin provides a tool kit to the game developers to bring blockchain gaming into their pre-existing game & create NFT based in-game items so that it isn’t siloed. These tools allow developers to provide utility to the NFTs. It allows gamers to keep their NFTs safe with the help of their mobile wallet & last but not least, it also has a marketplace for the above-mentioned NFTs.
Staying true to their objective, Enjin Multiverse came into being. A blockchain gaming multiverse is a collective gaming reality created by integrating a collection of blockchain assets with multiple games. In other words, a gaming multiverse is a collaborative gaming project where multiple game developers agree to use the same shared, decentralized database for some (or even all) of their in-game assets.
This enables gamers to utilize a multiverse asset in every game that is a part of a specific gaming multiverse (e.g., if a player owns a sword in Game A, they will also own it and can use it in Game B). In-game assets in a blockchain gaming multiverse are owned by gamers, while individual game developers control only the games they create.
This is very similar to the world of “Ready player one”. It also solves the high gas fees problem of the Ethereum network with the help of “Jumpnet”. It is a private version of the Ethereum Blockchain with the Proof of Authority consensus mechanism. This enables instant, secure, and gasless on-chain transactions.
Token utility
ENJ is the native token and has 1 primary utility. It is used in the process of minting NFTs. Now each NFT minted via ENJIN has a certain amount of ENJ tokens, hence giving real-world value other than the perceived value to the NFTs. The process can also be reversed, where the NFTs can be melted down to get ENJ tokens
Competition Analysis
The gaming industry is worth more than 300 billion dollars and Enjin also operates in the NFT space as well making their potential huge. This concept is quite unique with no immediate competition, with RARIBLE being their closest competitor.
Team, Media, and Community Strength
Enjin is a project that is operating in Singapore. They have a fully distributed team spread across five continents and 20 countries—unified by a mission to build futuristic, world-class products.
Their media presence is strong & their community strength is excellent, with over 300k Twitter followers & 57k telegram followers.
Conclusion
Pros: Enjin is aiming to solve one of the biggest problems in the gaming space which is worth approximately 300 billion dollars. It is live and operational and has 1.7 million wallet downloads & 1.16 billion virtual assets have been created. The token is designed in such a way that if the project grows, the value of the ENJ token will also grow.
Cons: Enjin does not have much traction from the traditional gaming companies so far.
MintingM rating for Enjin is 3.7/5
