December 2021 guide to DeFi Kingdoms
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An editor at Coincrop
20 Dec 2021 | 13 min read
ere at Coin Crop, we are on a mission to provide you with all the latest guides to products in the CeFi and DeFi world. You might then be wondering why we have chosen to write about a game! DeFi Kingdoms is far more than just a game – it has a significant crossover with the world of DeFi and can even be used a means of generating returns.
In this guide:
Disclaimer: All of the information written on Coin Crop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.
What is DeFi Kingdoms?
At the simplest level, DeFi Kingdoms is a online multiplayer game but it marries together decentralised finance (DeFi) to create a product that has multiple incentives. The project is very new going live in September 2021 yet already has a total value locked (TVL) of $245 million. Already it is in the top 2 so-called play to earn projects.
DeFi Kingdoms brings together several elements:
• A decentralised exchange (DEX) for swapping between different assets
• A liquidity opportunity for earning revenue
• A marketplace of NFTs
What is an NFT?
A non-fungible token (NFT) is an item of data stored in a blockchain with the properties of being non-interchangeable and unique. NFTs are typically videos, photos, audio or other types of digital files.
Whilst we think of NFTs as being relatively new (the first project was back in 2015 on the Ethereum blockchain), a domain name can be thought of as an NFT.
NFTs are a key component of DeFi Kingdoms as we will discover below (Heroes).
DeFi Kingdoms operates on the Harmony (ONE) blockchain.
Who is behind DeFi Kingdoms?
The project shares similarities with other DeFi projects in the sense that the contributors are anonymous. The team are referred to by anonymous names such as Frisky Fox, Professor Tango, Jericho Splendershoes, Admiral Omicron etc.
How do I get started?
There is somewhat of a technical barrier to getting started with DeFi Kingdoms. The steps to becoming a player/investor are as follows:
1) Setup MetaMask wallet. The most convenient way to use MetaMask is to install the browser extension version. The wallet should be connected to the Harmony blockchain network (using a custom RPC) and you will require some $ONE in your wallet for gas fees and purchasing JEWELL.
2) Connect your wallet to the DeFi Kingdoms website.
3) Setup a profile with a picture and name.
4) Start exploring the pixel art world.
5) Purchase some JEWEL using the $ONE in your wallet.
6) Become a liquidity provider for the game decentralised exchange (DEX).
7) Obtain your first hero.
What is JEWEL?
The DeFi Kingdom platform uses an in game currency referred to as JEWEL. This token is primarily used to purchase hero characters but has a wide variety of other uses.
Each time a sale occurs on the platform (e.g. from the purchase of a hero), the distribution of the token is as follows:
• 25% to development fund
• 30% to quest rewards fund
• 10% to bank – these are rewards for xJEWEL holders)
• 1% burned
• 17% to founders fund
What is a hero?
In the game of DeFi Kingdoms, a hero is a character which has a randomized appearance (background, skin tone, hair style etc.). Your hero is also assigned an element from one of the following: water, fire, wind, ice, earth, lightning, dark and light. Heroes are NFTs – they have rarity, uniqueness and value.
Heroes are needed in order to play the game quests – at the moment the only quest is the Wishing Well but more will be added soon.
There are two ways to get your first hero – you can go to the tavern (see below) or you can summon a hero (this does require you to have a hero of your own).
Each hero has their own starting stats which is determined by their rarity, genes, class (and other bonuses granted during the summoning process). In addition to stamina, mana points (MP) and hit points (HP), heroes have primary and secondary growth parameters. Each of these paramters assist in the chances of successfully upgrading each stat:
• Endurance (END)
• Dexterity (DEX)
• Intelligence (INT)
• Luck (LCK)
• Vitality (VIT)
• Strength (STR)
• Wisdom (WIS)
• Agility (AGI)
Heroes are capable of four professions:
• Mining (MIN)
• Fishing (FSH)
• Foraging (FOR)
• Gardening (GRD)
What happens in the tavern?
The marketplace in DeFi Kingdoms takes place in the tavern. This is also the interface to view heroes that have been minted (and also to send heroes to a specific address).
The NFT agent in the tavern allows you to:
• Buy a hero
• Sell one of the heroes that you own
• List one of your heroes for hiring out
Heroes are bought and sold using the JEWELL token.
What are quests?
The primary task of heroes is to go on quests in which the game is experienced and useful items are collected. We can think of quests as being two types: professional and adventure:
• Professional quests are related to the profession of your hero and allow you to earn experience and rewards. Each of the professions has a gene and skill. These quests are non-combative.
• In adventure quests you will earn rewards fighting – rewards will be earned based on your performance.
DeFi Kingdoms operates a form of staking in which users are encouraged to deposit their JEWEL tokens. In the bank, depositors are rewarded with XJEWEL that is equal to the JEWEL you deposited divided by the bank ratio at the time. I.e. 1 XJEWEL will always equal more than 1 JEWEL.
Lets consider the following example:
• A user deposits 10,000 JEWEL
• The bank ratio is at 1.575
• The 10,000 JEWEL generates 635 XJEWEL
At the point where you withdraw the XJEWEL it will convert into JEWEL.
JEWEL staking has the advantages that there are no fees, no risk of impermanent loss and there is the possibility of future airdrops. The returns are not are good as gardens (see below).
The concept of liquidity staking is referred to as gardens in DeFi Kingdoms. As the product acts as a DEX (decentralised exchange), there requires a source of liquidity in order to facilitate the trades.
Liquidity is provided by users. These users are rewarded for doing so with (1) a portion of fees charged by the DEX when a trade takes place and (2) a free JEWEL that is minted as a reward. Note, a portion of the freely issued JEWEL is locked so that it can only be redeemed after a specified time.
The rates of return on the gardens are VERY high. However, there is a risk of impermanent loss in which the ratio of the two assets that you initially provide can change when you come to withdraw.
Note, there are withdrawal fees if you require access to your funds in the liquidity pools: 8% if withdrawing in 1 hour, 4% if withdrawing within 1 day of staking, 2% if withdrawing within 3 days of staking 1% if withdrawing within 5 days, 0.5% if within 5 days.
It’s very early days for DeFi Kingdoms. This initial release features functionality around capital, jewels, heroes and quests. A roadmap of features into 2022 promises support for kingdoms, land, buildings, equipment and a battle system.
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