We’ve been playing games on our mobile phones, play stations, and computers for ages but have we ever earned any money from them? No.
GameFi has promising potential for the masses to earn economic incentives through playing games. In a few instances, people have completely given up their daytime jobs to play games on the GameFi platform.
GameFi runs on a play-to-earn model meaning you play but don’t just end up spending a good amount of your time on it but also earn money while doing so. This trait of GameFi has made it one of the most popular trends in the crypto space. It fuses the amusement of winning prizes and integrates it with the blockchain and crypto advancements related to the DeFi platform.
What is GameFi?
GameFi is a portmanteau of the words gaming and finance. The GameFi platform is a part of the Decentralized Finance (DeFi) realm. DeFi allows users to conduct borrowing and lending transactions that are executed over the Blockchain.
GameFi are games based on the Blockchain and work in conjunction with non-fungible tokens (NFTs), decentralized finance (DeFi), gamification, and a play-to-earn model.
GameFi is a decentralized application (dApps) that bestows users with monetary prizes and digital assets through their play-to-earn structure. Players are rewarded with financial incentives as they level up, complete tasks, and for other in-game efforts.
As compared to the traditional gaming structure, the moment the game developers decide to discontinue the game players lose their bounty, digital assets, and other token collected while playing the game but owing to the decentralized nature and based on the distributed ledger systems the digital assets earned over the GameFi platforms are stored on a distributed network.
The games on GameFi range from lottery-based games to massively multiple online role-playing games (MMORPGs). Before the boom of NFTs and DeFi lottery-based games were known as GameFi 1.0 but now games like Axie Infinity- NFT based games have created a shift from lottery-based games to MMORPGs with the potential of earning real-world monetary rewards.
Leveraging on the characteristics of the DeFi space players can borrow digital assets from other users or players with low capital can borrow money from players and share their winnings with the lender. On the platform, there are also lottery pools created and the winners of such lottery are given their reward out of the lottery pool created by the contributions made by users to buy lottery or raffle tickets.
On Games like Alien World’s players can lend their virtual land on the gaming platform to other players for mining and receive interest on it. There are several creative ways to earn on the GameFi platform.
How does it work?
GameFi follows the play-to-earn model, a few people might call it as pay-to-play-to-earn model, players win battles, complete daily allotted tasks and mine for resources and in return earn in-game tokens.
Such tokens can also be used in trading and can be exchanged for other cryptocurrencies like Ethereum (ETH) and Bitcoin (BTC). Meaning these tokens are developed as full-fledged cryptocurrencies i.e., in-game winnings can be converted into real-world money through decentralized exchanges.
Games on the GameFi have native tokens that are incorporated into their ecosystem. There are utility tokens and governance tokens. Utility tokens help users in buying digital assets from their gaming characters and allow for certain in-game character updation. Governance tokens allow users to vote on activities being carried out on the gaming platform. Few games also have a third token exclusively for rewarding incentives in the form of such tokens. The number of in-game tokens vary from game to game.
For example the game Axie Infinity has three tokens, Axie Infinity (AXS) is the governance token, Smooth Love potion (SLP) is the utility token and Ronin (RON) is the token used on Axie Infinity’s sidechain Ronin.
God unchained, a popular card trading game, provides players with the tools to create their own rare cards and sell them as NFTs. Many other games follow the same model.
Through the confluence of DeFi staking and NFTs a new opportunity has come up-NFT staking. Games like Blockchain monsters and The Legends of Ancient games are examples of games allowing NFT staking.
Before players can begin playing the game, there is an entry fee required. For example, users have to buy a minimum of three Axies i.e, characters on the game Axie Infinity and the price of these are in hundreds of dollars.
How to play on GameFi?
Players need to open compatible digital wallets that will hold the user’s cryptocurrency (in-game tokens traded on the DEX). For example for playing games based on the Ethereum blockchain users require wallets that are Ethereum compatible.
Next step would be to fund your wallet as upfront investments are required to enter games on GameFi. The crypto required to play the game will rely on the game you intend to play. In few cases, users might have to exchange currencies like ETH and BNB to receive the tokens of the game the user’s intend to play.
Before beginning the game, user’s are required to make in-game purchases like characters or upgrades. For example, buying a minimum of three axies, character NFTs, on Axie Infinity.
Top GameFi Games
- Axie Infinity – An NFT based pet game where in-game characters called Axies are raised and used to win battles.
- Alien Worlds – A blockchain based game, where players are adventurers from the year 2055, that explore a Metaverse where everything can be manifested as NFTs.
- Splinterlands – A card trading game that rewards players cryptocurrencies on accomplishing in-game achievements.
- The Sandbox – A virtual world in which users can build, develop and incentivize their gaming experience. It even allows the development of the virtual real estate in its ecosystem.
Future of GameFi
As per reports from Morgan Stanley, the GameFi industry has a revenue potential of $56 billion by 2030.
The new virtual environment created through GameFi has promising potential which will keep users engaged, curious, and motivated to stay on the GameFI platform due to the elemental role played by its play-to-earn model.
Our suggestion to you would be to keep a close eye on the upcoming boom in this industry and do partake in the games offered on the platforms.
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