Singapore-based gaming community website Enjin has been cooking their blockchain-based game economy ecosystem Enjincoin for the last year now, and are on the cusp of releasing this revolutionary product to the public. Consisting of several highly refined ingredients such as the Enjin Smart Wallet, EnjinX blockchain explorer, Efinity, their Unity Software Development Kit (SDK), and the revolutionary token standard ERC-1155, the Enjincoin ecosystem works to deliver a gaming experience in which gamers can truly own, trade, sell, and rent their in-game items through trustless Ethereum network smart contracts.
If you’re only just learning about Enjincoin, odds are this techy jargon is confusing to you. Well let’s break it down!
What Is a Blockchain?
A blockchain is basically a ledger of transactions which is shared on a decentralized Internet network, and contains a record of all the transactions that have occurred on that network in chronological order. The official order of transactions on the network is verified by a majority of users on the network and encoded into blocks. Each block will be cryptographically linked to the previous, so that once a block is created, it becomes immutable (cannot be changed). In this way each transaction on the blockchain can be viewed and verified.
In our current monetary system, we rely on trust in centralized authorities such as banks, payment providers, and other institutions to verify and keep track of transactions and balances. But there’s no way to know if they are doing this job perfectly. With blockchain ledgers, records of transactions and balances are decentralized, trustless, and replace financial institutions with automatically executing computer code, ensuring that only legitimate transactions are completed. Blockchain ledgers make transactions simpler, faster and more secure.
What Is Enjincoin?
Enjincoin (ENJ) is a cryptocurrency token created on the Ethereum network using the ERC-20 token standard and is the basis of the Enjin economy. Enjin’s ecosystem allows you to “mint” and “melt” items backed by Enjincoin tokens, storing them on the blockchain.
You mint a set of 10 of a special item — a golden sword.
Each sword is backed by 10 ENJ — think of the ENJ backing value as the raw materials used to make those swords (1 pound of gold = 1ENJ).
The details of each item are stored on the blockchain as an ERC-1155 token, backed by Enjincoin ERC-20 tokens (I’ll go into more detail on the different token standards later). Now, this special sword can be looked up by anyone on EnjinX Blockchain Explorer — they can see how many of each item exists, when it was created, and other details. If you are the owner of the sword, you will be able to see it in your Enjin Smart Wallet as well as in your game inventory.
These swords are now unique, their provenance verified, and are backed by a cryptocurrency with real value. Depending on the demand of the market, this item may be worth many times its ENJ backing.
However, if your game flops, or if people no longer play it, they may decide to melt your gold swords. In doing so, they release the ENJ tokens from the item, of which 50% or more are then returned to their wallet (devs can set up the melt fee to return up to 50% of the ENJ backing to themselves). Even though an item may be worthless to other players, you can still retrieve some value for it in the form of ENJ tokens, which can be spent on any game with a marketplace built on the Enjin ecosystem.
Never before have gamers and developers had this level of control over their items. Enjin allows gamers true ownership of their in-game items, and allows developers to monetize their games while virtually eliminating fraudulent transactions.
Boldly Going Where No one Has Gone Before
Enjin’s innovative system has a staggering variety of use cases over all sorts of industries. First, let’s look at some possibilities that Enjincoin brings to gaming.
Verifiable Rarity of On-Chain Items
Backing game items with ENJ effectively records them on the Ethereum blockchain network, along with metadata relating to their creation. If a developer mints five limited edition shields, this mint run will be recorded together so anyone looking it up can see there is only five in existence. Even if the developer decides down the line that they want to mint more of the same item, players will be able to see which ones were in the original run based on the block they were created in. This preserves the history of the item and thus its rarity value.
With Enjin, it’s possible to discover all sorts of information relating to your items. If your item was once owned by a high-profile professional gamer, this information can be shown in the game. Custom signatures can be appended to items in much the same way as you would engrave a physical item. Enjin’s SDKs will make it simple for developers to display this info within their games. Enjin allows for truly unique and verifiably rare items, increasing their value to players and developers alike.
Trustless p2p Trading and In-Game Marketplaces
The use of Ethereum smart contracts for in-game transactions has opened many avenues for both gamers and developers to benefit from games. With the Unity SDK, developers can seamlessly implement ENJ-powered in-game marketplaces where users can buy, sell, trade, and rent items. And with the ability to charge transaction fees, it’s a simple way to monetize a game. In addition, backing items with ENJ makes it possible to restrict which marketplaces they are sold on, eliminating grey market transactions which devs don’t benefit from and are often fraudulent.
Automatically Executing Lending Contracts
Another innovation made possible by Enjincoin is the ability to loan your items to other players. If you have a rare item which you don’t use, you can offer it up for rent. ERC-1155 token standard smart contracts allow users to enter an agreement specifying the item to be lent, the loan period, and the loan rate. Once the loan period expires, the contract automatically returns the item to the lender along with the lending fee. This function allows owners of Enjin-backed items to extract maximum value from their in-game assets.
The ERC-1155 token standard brings many innovations to the crypto space — one of the most useful being the ability to bundle together tokens. This feature allows for more efficient transactions that require less computation (as transactions are being processed in groups, rather than individually). In addition, the token bundling feature allows for in-game mechanics such as crafting unique items (eg. five steel ingots backed with 1ENJ each and a 5ENJ jewel being crafted into a unique socketed breastplate with 10ENJ backing). This has myriad implications for in-game economies — pretty soon we could be seeing players with crafting or enchanting expertise being sought after for their unique items, giving them the ability to sell their products for a premium and actually make a living crafting game items.
With Enjincoin, tokenized items are stored within the player’s Enjin Smart Wallet. Because these items are no longer locked within the games they are made for, tokens can be recognized in more than one game. This allows developers to create rich gaming multiverses, enabling inter-game quests (a player might need a special key from one game to unlock a secret area in another) or even cross-promotional items (a sword in one game which if transferred to another becomes a wand). No longer will your items be confined to one game — the Enjin ecosystem allows the true potential of item ownership to be realized.
The Possibilities Are Endless
This is just the tip of the iceberg. As more games are announced, we will start to see all sorts of innovative game mechanics utilizing Enjin’s unique capacities. Stay tuned for new game announcements, news, and information relating to Enjincoin and crypto gaming.