GameFi refers to blockchain games that allow players to earn money by playing. Players can typically earn cryptocurrency and NFT incentives by completing activities, competing against other players, and progressing through the various game levels. Unlike traditional video games, most blockchain games allow players to move gameplay objects outside of the virtual Realm of the game. This enables Gamers to swap their NFT products and crypto winnings on NFT marketplaces.
In this article, we’re going to learn about what GameFi is, how it works with the play-to-earn model, the difference between it and traditional video games, what the future holds for GameFi, and my overall thoughts on it.
The term GameFi is a combination of the words game and finance. It refers to blockchain games that allow users to make money by playing. The GameFi ecosystem creates a virtual gaming environment by utilizing cryptocurrencies non-fungible tokens or NFTs and Blockchain Technology. In-game awards are typically earned by completing chores, defeating other players, and progressing through the various game levels. They can also trade their assets outside the game on crypto exchanges and NFT marketplaces.
How does GameFi work?
In GameFi the reward can take many forms including Bitcoin or in-game assets such as virtual land, avatars, weapons, and costumes. Each GameFi project will have its model and game economy. Most in-game assets are NFTs that run on the blockchain and may be exchanged on NFT marketplaces. However, in other circumstances, in-game assets must be turned into an NFT before players can trade or sell them. In-game assets typically provide various benefits to players allowing them to earn greater rewards, however, some games offer avatars and cosmetics that are just decorative and have no effect on gameplay or earnings. Players can earn rewards by doing activities battling other players or building commercial structures on their piece of land depending on the game.
Some games also allow users to earn passive Revenue without actively participating in the game, either by staking or by Landing their gaming assets to other players. Let’s take a look at some of GameFi’s most prevalent features.
A model of play-to-earn or P2E
We have played earn or p2e as an Innovative gaming mode at the heart of GameFi projects. It differs significantly from the pay-to-play approach used by traditional video games. Pay-to-play demands Gamers make an initial investment before they can begin playing. Call of Duty for example requires players to acquire licenses or recurring subscriptions.
Traditional video games in most situations will not provide any Financial returns to players for years and their in-game assets are managed and held by the gaming firm. P2E games on the other hand can provide players complete control over their in-game purchases, while simultaneously providing opportunities to earn money. However, remember that it all depends on the model and game design used by the GameFi initiatives.
Blockchain technology has the potential and should have the potential to offer players complete ownership over their in-game assets. This is not always the case before diving into a p2e game understand how it works and who is behind it, another thing to remember is that p2e games can be free to play while still providing Financial rewards to players. However, some GameFi projects require you to buy NFTs or crypto assets before you can play. As a result, it’s always critical to do your own research and assess the risks. If you make a significant initial investment in a p2e game and the benefits are tiny you are more likely to lose your initial investment.
Axi Infinity is one of the most popular play-to-earn games it’s an Ethereum based and ft game that’s been gaining traction since 2018. Gamers can acquire SLP tokens by completing daily objectives and defeating other Gamers with their NFT pets or axes. They can also receive AXS Awards if they reach a particular PvP rank. AXS and SLP can also breed more axes which can be utilized in-game or exchanged on their official NFT Marketplace. Aside from purchasing and selling axes users can rent them to other players, allowing owners to earn money without having to play the game. This type of lending is known as scholarship. It enables Scholars to play and make prizes by borrowing axes. In other words, axie owners can earn a passive income while Scholars can enjoy the game for free. The incentives made are then divided between Scholars and axes owners.
Ownership of digital assets
As previously stated blockchain technology enables digital asset ownership which means that players can monetize their in-game goods in a variety of ways. Avatar’s pets housing weapons tools and other items are available to players in the same way that they are in video games normally. However, in GameFi these assets can be issued or produced on the Chain as NFTs also known as NFT minting. This gives participants complete control over their goods and authenticity and provable ownership. The concept of land ownership is essential to some popular metaverse games such as decentral and the sandbox.
They enable players to monetize their virtual properties. In the sandbox, players can buy digital real estate and develop it to create cash. They can for example charge other players who come to their land to earn token rewards by hosting content and events or rent out their customized land to other players.
Applications for Defi
Some GameFi initiatives include Defi products and services like staking, liquidity Mining, and yield farming. Players can typically wager their in-game tokens to obtain Awards unlock unique products or access additional gameplay levels. Incorporating Defi AI components can also help to decentralize crypto gaming. Unlike traditional game studios which have centralized management over game updates, some GameFi initiatives allow the community to participate in decision-making through decentralized independent organizations or DAOs they can propose and vote on future upgrades.
Decentraland players for example can vote on in-game and organizational regulations by storing their governance tokens or Mana in the DAO. The more tickets they hold the more votes they have. This enables Gamers to communicate directly with game developers and affects the game’s development.
Do video games qualify as GameFi?
Traditional video game players can earn in-game currency and collect digital assets to help them level up their characters. These tokens and things however cannot or are not supposed to be traded outside the game. In most situations, they have no utility Beyond The Game’s scope. Players are frequently barred from monetizing or selling their possessions in real life even when they do. The in-game coins and assets and blockchain games are typically cryptocurrencies and NFTs. Some blockchain games use Virtual tokens rather than crypto or NFTs. Although players should be able to convert their in-game assets into NFTs if they so desire.
Players can deposit their winnings into crypto wallets and trade them on cryptocurrency exchanges or NFT markets. They can then convert their cryptocurrency winnings into fiat currency as well.
How can you play GameFi games?
There are thousands of blockchain games on the market each with its own rules. Be wary of bogus initiatives and websites, connecting your wallet or downloading games from untrustworthy websites can be risky. Ideally you should open a new cryptocurrency wallet for this reason and only utilize funds you can afford to lose. If you’re convinced that the game you discovered is secure proceed with the following steps.
1- Construct a cryptocurrency wallet
To enter the GameFi realm you’ll need a Bitcoin wallet that supports GameFi such as a Trust wallet or Metamask, depending on the game you’re playing you may need to use multiple wallets or connect to separate blockchain networks. To play blockchain games on the BNB smart chain previously known as Binance smart chain you must first link your Metamask to the BSC Network. You can also use Trust wallet or any other supported crypto wallet. Check the game’s official website to see who they endorse. You can also connect your cryptocurrency wallet to the Ethereum blockchain and have access to the majority of the Ethereum Network’s games.
Nonetheless some games such as Axie infinity and gods Unchained will create their own wallet to save expenses and enhance performance. Although Axie Infinity is based on Ethereum their team created the Ronin Network as a side chain. As a result, to interact with the Axie infinity ecosystem you must use the official Ronin wallet. As a side chain, the Ronin Network makes trading and reading axes significantly cheaper, lowering the cost of playing.
2- Link your wallet to the game
To participate in a blockchain game you must first connect your wallet. Check that you are relating to their official website and not a spoof. Navigate to The Game’s website and look for the option to link your cryptocurrency wallet. In contrast to traditional online games which require you to create a username and password, most blockchain games use your crypto wallet as a gaming account. Therefore you will most likely be required to sign a message in your wallet before you can join the game.
3- Examine the game’s prerequisites
To get started most GameFi initiatives will ask you to purchase their cryptocurrency tokens or in-game NFTs. The prerequisites differ for each game but you should always examine the earning potential and the overall hazards, estimate how long it will take to recoup your initial investment, and begin profiting.
To play Axie Infinity you must have three axes in your game wallet. They can be purchased at the Axie marketplace. Axes must be wrapped in eth or W eth in your Ronin wallet. Using the Ronin Bridge you can buy eth from crypto exchanges such as Binance and transfer it to your Ronin wallet. Please see how to use the Ronin wallet for additional details. If you don’t have any money or don’t want to take any risks look into scholarship programs. You can borrow NFTs to play but you must split your earnings with the NFT owners.
Future of GameFi
The number of GameFi projects increased dramatically in 2021 and is expected to rise further in the next few years. Dap Radar Now lists over 1400 blockchain games as of September 2022. Popular games are now available on several blockchains including Ethereum, BNB smart chain or BSC, polygon, Harmony, Solana, and many others. The increasing game 5 trends are predicted to continue rapidly as blockchain technology advances. GameFi’s ability to own in-game assets and earn money from games makes it incredibly appealing, particularly in underdeveloped countries.
People have been trying their luck with basic browser games in the hopes of making Bitcoin gains since the early days of Bitcoin. While Bitcoin games are still available the rise of Ethereum and smart contracts has undoubtedly altered the blockchain gaming sector, which can now provide much more intricate and intriguing experiences. It’s clear how GameFi attracts players by mixing fun and monetary incentives.
With the growing popularity of blockchain games, we may expect an increasing number of large corporations to contribute to the metaverse development. I hope you got value from this article and have a better understanding of GameFi I’m curious have you played any of these blockchain video games if so which one is your favorite leave a comment below.