According to Binance CEO Changpeng Zhao (CZ), the new ‘free-to-own’ GameFi model is high risk. The blockchain gaming firm in question raised over $200 million on Monday to further its NFT operations.
Binance CEO: This kind of GameFi model is high risk!
Changpeng Zhao, CEO of the world’s largest cryptocurrency exchange Binance, criticized the creation of a new “free-to-own” business model in the GameFi space on Tuesday. In this context, CZ wrote:
Why do we have to work so hard if everything in the world is going to be free?
Binance CEO later explained that nothing is completely free. He pointed out how the exchange could offer zero trading fees for Bitcoin (BTC) and Ethereum (ETH) pairs due to sufficient revenue from other trading pairs. He added that new projects that allow players to sign up for free can be high risk for early adopters.
What is the free-to-own model and why is it being criticized?
cryptocoin.com As we reported, CZ sees such models as high risk. The target of CZ’s criticism is GameFi gaming startup Limit Break. Meanwhile, the firm in question raised $200 million in venture capital funds on August 29. The project gained popularity with the release of a free NFT collection called DigiDaigaku.
It’s possible for the community to get started for free with ownership of NFTs to begin with. This in turn act as factories producing new NFTs for gameplay and cosmetics. The idea is that since NFTs are given for free, players are not pressured to recoup the cost of their investment as quickly as possible. For this reason, it is ensured that they stay and play longer in the game.
Ryan Foo, game economist at Delphi Digital, said Limit Break only charges 10% transaction fees on NFTs. In the weeks since the launch of NFTs, around 3,900 ETH worth of collectibles have been traded. This resulted in an income record of over $600,000.
In recent months, blockchain games have been focusing on “making money” rather than entertainment. This is why they face serious criticism from gaming industry veterans. Minecraft creator Mojang Studios, for example, said it would ban NFT integrations, citing the speculative pricing and investment mentality that distracts from the gaming experience.
FREE-TO-OWN
The new web3 model that will change game monetization forever.
Breaking down @limitbreak 's and @DigiDaigaku 200M raise: pic.twitter.com/0tBSRpv7se
— Ryan {👾} (@0xRyze) August 29, 2022
