11 min read
There are those who think that the NFT fever is about to come to an end. But there are also those who are watching from the sidelines and, of course, they think the complete opposite.
Beyond the numbers we can read and interpret and beyond the calculations that indicate the number of users that could enter the crypto ecosystem through this niche, a fact that serves as an argument for the group that considers that the fever is just beginning, is the amount of development behind each project related to NFT.
In this sense, today I will focus on the task of answering the question “What is Enjin Coin? Along the way, I will analyze the functionality of the so-called “Cryptocurrency of virtual goods” and the importance of the platform that gave birth to it and was baptized with the same name, “Enjin Platform“.
A Brief History of Enjin Coin
As I commented in the article “Is it possible to mine Enjin Coin?“, in order to talk about this cryptocurrency, it is necessary to soak ourselves in the context in which it was born, to understand its functionality and potential.
For those who did not read the previous article, I will briefly review the points necessary to understand this currency.
It is the largest platform dedicated to the creation and growth of video game communities in the world. The numbers indicate that more than 20 million players use it every day and that the number of communities created on Enjin exceeds 250 thousand. Of course, it is not difficult to identify the potential.
Its creators, Maxim Blagov and Witek Radomski, launched the platform in 2009. It was Witek who started researching blockchain technology and it was the Ethereum network that gained all his attention.
Already with a successful platform, Witek thought that Ejin’s next steps were to:
- Enable users to create their own NFTs that can be used in video games.
- Create a platform for trading these NFTs
- To give birth to an ERC-20 token to serve as an exchange currency.
His need to go beyond what was planned led him to create a new standard in Ethereum the ERC-1155, which allows to create not only non-fungible tokens, but also fungible tokens.
Now, what is Enjin Coin?
Enjin Coin, identified with the ticker ENJ, is basically the exchange currency of the Enjin platform. Every NFT that is created in order to be used in the games, whose communities are in Enjin, can be traded by means of ENJ.
In addition, this token has another important function. In the jargon of the crypto ecosystem, the creation of NFT is called “minting”, this action is, in short, to make a call to a function of a “Smart Contract” to create an NFT. Once this is understood, you can imagine that “minifying” an NFT has its cost. Thus, the second function of ENJ is to serve as a means of payment for “mining” NFTs within the Enjin Platform.
Going back to the nature of Enjin Coin, it is important to clarify that it is an ERC-20 token that runs over the Ethereum network. As I wrote in the previous article, the salient feature of this token is that its creation is done through Proof of Work consensus.
Enjin Coin Tokenomics
This point of ENJ is interesting, since they aim to be a currency that eradicates inflation at a stroke from its conception. Its total supply is 1,000,000,000,000 tokens, a number we are about to reach, and once the last ENJ is mined, a new one will never be created again. The speculation of its fans is that the use of ENJ will grow over time becoming a scarce commodity and, therefore, its price will increase over time.
ENJ, as of this writing, shows a price of US$1.59. On April 9, 2021, it reached its all-time high price of US$3.94 and its lowest price was known in November 2017, shortly after its launch, at about US$0.018 per token.
Having analyzed the platform, the currency and with a brief look at its functionality, it is my turn to delve into this last point and the solution the Enjin team is working on, known as Efinity.
Enjin Coin and its real utility
I have reached this section only by performing a review of ENJ use cases as the crow flies, so it is time to explore in depth.
Let’s start with those who give life to this ecosystem.
Tools for developers
Enjin, as a platform, offers a long list of functions that are accessible through its API, which is publicly accessible, and also provides SDKs, which are software development kits. The following tools stand out:
Tools for the creation and management of NFT
Through them, developers interested in the gaming world can develop NFTs that may or may not be used in the game. An example of an NFT that is not intended to be an in-game object is the collaboration between a developer and an artist to generate a collection of NFTs that collectors can acquire through ENJ.
This is where ENJ tokenomics come into play, since every time NFTs are “mined” the ENJs used for this purpose are “burned” or eliminated, generating a shortage of ENJs.
SDKs available in different programming languages
Some examples of the languages, in which Enjin’s SDKs were created, are C#, C++, Unity, Godot and Java. Using them is as simple for a developer as going to their GitHub and downloading them.
Distribution via QR
Enjin developed a tool called Enjin Beam, which allows those who create NFTs to distribute them to users by scanning a QR code. This method simplifies the usually complex distribution of NFTs.
Tools for players
Beyond the facilities to create and grow communities in Enjin, the players or users of the platform have certain tools related to Enjin Coin that facilitate their daily life with the application.
It is an online marketplace with more than 10 million non-fungible tokens waiting to be discovered. The possibilities for trading NFT within this market are extremely interesting and varied.
It is a proprietary wallet, hosted on the Ethereum network, which allows transactions within the NFT marketplace in a simple and direct way. It is also linked to the platform’s games, facilitating and simplifying the user experience, freeing them from the “complexities” of the blockchain world.
Of course, this wallet also supports the standard created by Witek, the ERC-115.
Efinity, Enjin’s biggest bet
The team in charge of Enjin’s development is a team that is alert and very connected with its users. From this connection with users and paying attention to their comments and complaints, they detected the biggest barrier to entry that Enjin presents and it is, once again, the high fees of the Ethereum network.
True to their philosophy of not depending on the timing of others and innovating as much as possible, they did not sit back and wait for the release of ETH 2.0, but worked on their own solution known as Efinity.
However, this is not the only problem that Enjin’s team noticed. The first of the problems they noticed is that there is no blockchain created exclusively for the purpose of meeting exclusive conditions for the proper functioning of NFTs. While the second problem, has to do with the method chosen to give birth to ENJ, Proof of Work. According to the Enjin team, with this block creation mechanism, the miners win but not the users.
The solution to all these problems has only one name: Efinity.
What is Efinity?
Polkadot has chosen a different approach than Ethereum. In a nutshell we can say that ETH 2.0, at its endpoint, will bring what we call “sharding“. Sharding will allow to split the main Ethereum chain into several sub-chains that will process specific issues. So there may be one chain to process ETH staking, another to process transactions, another to host Smart Contracts and so on.
Each “shard” or “subchain” is called Parachain and these are completely customizable. Polkadot provides the infrastructure to set up this chain and whoever builds on it chooses whether to rely on the security of the main chain or to manage it himself, the same situation applies for example to the network validators, the currency to pay the fees, etc.
Finity will bring new possibilities to users such as:
- The interoperability Polkadot offers, easy connection with other networks
- The possibility of setting up a node, staking ENJ and validating transactions, receiving EFI, the Efinity token, as a reward.
- Extremely low-cost transactions
- A network created exclusively for hosting NFTs
As a final detail of this project, the Enjin team is working on a new token standard for the Polkadot chain to be called “Paratoken”. Given the background, less we could not expect from this ambitious team.
Imagining the future of Enjin, both its platform and its token, can generate more than just a smile. From a statistical standpoint, the number of people who could enter the crypto world through this platform is enormous.
Barriers to entry are often the difficulty in getting started in the blockchain world and, over the last year and a half, the high costs of transacting on the Ethereum network, the largest Smart Contracts supported network in terms of capitalization.
Undoubtedly, Enjin’s team is clear about the barriers and they are joining all their efforts to break them down and open the “crypto-doors” to the world.