Enjin Use Case
Enjin Coin (ENJ) is an ERC-20 token that powers the entire Enjin ecosystem. The Enjin ecosystem is used for minting NFTs, playing games, and running other blockchain products like marketplace, wallet, and developer tools. All assets on the Enjin marketplace are valued in ENJ.
ENJ has a circulating supply of about 835 million coins out of the 1 billion that are to be minted in total.
What is Enjin?
The Enjin platform is an all-round ecosystem of products that helps to facilitate the creation, distribution, storage, trade, and integration of tokenized digital assets.
Although the platform was originally designed for the gaming community, more Enjin users are making use of the platform to create ENJ-backed digital assets. They are also using these assets in creative ways – from using it as art NFTs (non-fungible tokens), to digital vouchers, and even as items that can be used across many different video games apps. In addition, one of the Enjin adopters is using the Enjin platform to tokenize commercial real estate.
Enjin’s community management tools have helped at least 20 million Minecraft users stay in touch and created a wide network of like-minded players.
In 2009, the Enjin Network was launched by co-founders Maxim Blagov and Witek Radomski as a gaming community platform. It launched a successful ICO for ENJ, it’s utility token, in 2017. Later, it began building a suite of blockchain products that allow anyone to easily manage, explore, distribute, and integrate blockchain assets.
The Enjin Platform consists of products like Marketplace, Wallet, Beam, and other tools and services, Enjin’s developer tools enable game developers and game studios to use tokenized digital assets as part of their acquisition, retention, engagement, and monetization strategies.
How Does Enjin Work?
The Enjin network is quite similar to the Ethereum network due to its advanced smart contracts and its support for an ERC-20 token. However, the primary goal of Enjin is to develop a set of tools that will allow users or developers to create and manage virtual goods. Enjin network has tools that allow developers to easily build their own cryptocurrency or NFT products.
Here are some of such tools:
Beam: This tool helps NFT creators to be able to transfer several NFTs/FTs (Fungible tokens) to interested buyers through a single QR code scan.
Wallet: Enjin provides a blockchain asset wallet that merges smoothly with games and apps. It’s one of the most functional digital wallets in the world according to the team.
Efinity: This is a revolutionary Ethereum compatible blockchain that facilitates ERC-20 and ERC-1155 token transfers in a quick and easy way.
Multiple SDKs: Enjin offers software development kits for programming platforms like Unity, Java, Godot, and other platforms. This kit enables millions of developers to easily integrate with existing projects or create completely new ones.
Marketplace: Enjin has a digital marketplace where over ten million digital assets are explored, bought or sold, including rare NFTs.
Is Enjin an ERC-20 token?
Yes, Enjin (ENJ) is an ERC-20 (Ethereum-based) token. This means that users who want to buy, hold, trade and sell ENJ will need to use an Ethereum compatible wallet to do so.
ERC stands for “Ethereum request for comment”, with “request for comment” being a term used to denote technical specifications and requirements in the software community. Thus, ERC-20 is a specific iteration of technical requirements for building smart-contracts on the Ethereum blockchain.
Specifically, ERC-20 denotes the scripting rules which must be followed when writing smart-contracts for fungible tokens on Ethereum. A fungible token is a type of token such as Enjin, which has a certain supply (in the case of ENJ this supply is 1 billion total tokens) which are each interchangeable and tradable for each other at the same value. Therefore, all 1 billion ENJ tokens are identical in value.
This is as opposed to non-fungible-tokens (NFTs) in which each token is unique and has its own value. NFTs on Ethereum utilize a different scripting standard known as ERC-721.
The ERC-20 standard was created in 2015 and officially implemented as the primary standard of fungible tokens on the Ethereum blockchain in 2017.
Enjin Use Case: Managing Virtual Goods for Games
ENJ can be used to create, manage and destroy virtual goods like in-game items. Developers can issue custom tokens, unique items, or privilege tokens backed by Enjin Coin. These virtual goods could include in-game currencies or tokens representing unique game items like swords or accessories for game characters.
In order for developers to create and destroy in-game items, they must complete the following five steps:
Acquisition – Developers initially buys some ENJ
Minting – ENJ enables developers to mint in-game items for gaming environments on the Enjin platform
Gaming – Game players will acquire some in-game tokens and use them in various gaming activities.
Trading – Players trade tokens amongst each other
Melting – Players sell tokens for ENJ.
When an item is sold, it is destroyed, and the ENJ that was locked into the smart contract is released to the user who sold the item.
Enjin Use case: Minting In-game Items
The Enjin network helps in tokenizing in-game assets and infusing them with the project’s native ENJ token. After the tokens are infused with ENJ, they are automatically converted into ERC-1155 tokens. They are an Ethereum token standard that allows creators to allocate both fungible and NFT tokens that are backed by ENJ coin through a single smart contract.
This process whereby developers convert any in-game item that resides in a video game’s ecosystem into tokens is called minting. In-game Items minted could include weapons, mounts, armor, planets, characters, or even the actual game itself.
All ERC-1155 tokens on Enjin are minted using a specific amount of ENJ. After minting the items, players can either purchase them directly from the token creator or via approved peer-to-peer (P2P) secondary marketplaces. They could also earn them as rewards by completing a quest or referring friends to the gaming platform.
The ENJ coin is used in purchasing and selling these minted in-game items or NFTs on the Enjin Marketplace, secondary markets, and in peer-to-peer user transactions among gamers.
Fees are Paid in ENJ
Developers generate income from the marketplace, direct peer-to-peer or third-party sales, by setting a specific trading fee for every transaction involving their in-game items. These transaction fees are paid in ENJ which Enjin automatically charges and distributes to the developers.
Rather than storing in-game items on the game servers like in traditional games, all the tokenized in-game assets in Enjin are stored securely in the users’ wallets. These assets can later be sold to others in exchange for some ENJ coins based on the original minting cost.
In order to mint virtual goods, developers lock away some ENJ into a smart contract, which assigns a value to the item. When a player buys these items, they can either use them in games, trade them to others or use them in other blockchain-based gaming solutions.
Enjin Use case: Melting In-game Items
In Enjin, melting is a process whereby players convert ENJ-backed digital items back to Enjin Coin. Although they “destroy” their assets this way, they receive all or some of the ENJ coins developers used to create these items.
The amount of ENJ players can receive after melting their in-game Items is determined by the developers. It often never goes below 50%. For instance, at a 50% rate, if minting the in-game item costs 2 ENJ for the developer, the player gets back 1 ENJ after melting it.
This mechanism comes especially handy when a game gets abandoned by the developers. The melting feature also assures players that the in-game items they bought from publishers will be worth something in the future.
The Enjin team has developed various SDKs to facilitate these functionalities, which include kits that focus on wallets and payment platforms. In conjunction with their SDKs, Enjin has also developed application programming interfaces (APIs) to help deploy in-game items.
Enjin is used by loyalty reward programs. For example, in its partnership with BMW, NFTs come with loyalty points that can be used to pay for fuel, parking fees, road tolls, or even swapped for ENJ.
Enjin Use case: Stake ENJ to Earn Passive Income on Efinity
Recently, Enjin launched Efinity, a completely new blockchain that focuses on NFTs while using Polkadot’s framework. Efinity is designed to be cheap and quick to use and can also integrate with other blockchains.
The launch of Efinity has introduced a new mechanic for the ENJ token. ENJ holders will be able to stake their ENJ in nodes, and earn passive income in the form of EFI tokens on the Efinity blockchain. In addition, ENJ infused NFT pieces are automatically eligible for staking on Efinity. That means that Enj-backed NFT items on Enjin can be used to generate passive income in the form of EFI tokens.
Enjin Use Case: Stake ENJ on Bancor to Earn Passive Income
Bancor network has a single sided liquidity provider (LP) that allows users to stake ENJ and other tokens in exchange for some rewards. The staked ENJ token also gets insurance that increases after 30 days in (30%) up to 100% of the impermanent loss after 100 days.
Hence, if a user stakes ENJ for 100 days, they will earn trading fees of 0.5% for every ENJ transaction on the Bancor protocol without the risk of any loss. Users also gain bonus rewards of BNT (Bancor tokens) for at least the next 78 days.
Every BNT earned from the bonus rewards that are currently enabled will be multiplied by 2. So, users will earn fees from ENJ trading on Bancor platform, earn free BNT and lose nothing for holding the ENJ token for at least 100 days.
Enjin in the Future
It’s no longer a doubt that the Enjin network has a lot to offer. Its approach towards gamification is unique, as it tries to give every in-game or platform-based item a real-world value.
As its native cryptocurrency, ENJ, continues to gain more adoption and popularity it’s expected to gain more value in the short term.
Enjin Coin is set to disrupt the gaming ecosystem by making gaming not just fun, but an activity that fetches some passive income to players and developers.