Imagine a time in the future where people can actually make money just by video gaming. Not just in-game currency, but real cash that you can use to buy food, clothes, and pay bills. Imagine a scenario where all your assets in a game (like virtual land, clothes, weapons) can be purchased and sold in real life.
This is the principal idea of GameFi development, and many active gamers in the industry believe that this future is not that far. Of course, GameFi has not yet fully burst onto the scene, meaning that many people are not quite familiar with what it is and how it works.
If you feel the same way, keep reading the article to get all the data you need regarding GameFi.
What Is GameFi?
GameFi is gaming plus decentralized finance (DeFi). GameFi is based on the convergence of blockchain technology, the gaming industry, and many types of DeFi products.
GameFi has a number of options that enable users to earn prizes. Accomplishing missions, fighting other users, or constructing monetized buildings on their piece of land are examples of these. Some games also allow users to create a revenue stream without actively participating in the game. In other words, they can either stake in-game tokens or earn money by renting them to other users.
Prizes in GameFi can take many forms depending on the game. They may be in-game items such as land or avatars, or they can be turned into NFTs and exchanged on NFT marketplaces. In-game assets usually offer numerous benefits to players, such as the power to make additional rewards.
Where Did it Come From?
GameFi was inspired by CryptoKitties, a blockchain gaming platform established on the ETH network at a time when the premise of NFTs was less known.
Then the NFT industry caught on, and at its peak, CryptoKitties had over 15K daily users. Sadly, the prevalence of these NFTs hindered the Ethereum blockchain, leading to high transaction fees and long verification periods.
Developers saw the need for a better blockchain technology that promised quicker transaction procedures, easy scalability, and lower costs. Polkadot, Solana, and Cardano are only some of these promising ideas.
Then, there were Decentralized Finance (DeFi) platforms. The growth of DeFi platforms increased GameFi’s appeal. Why? Because new game finance systems came into play that was solely based on smart contracts.
This provided players with the means to launch, sell, rent, or gamble their in-game tokens. That was just the beginning of the play-to-earn model.
Defi Software and Game Developers
Aside from game awards, several GameFi initiatives use elements of Decentralized Finance (DeFi). Yield farming and staking are two prime examples that allow users to make a side revenue.
Staking, for example, allows a player to utilize their in-game tokens to obtain prizes, gain access to unique goods, and unlock new game features.
The addition of DeFi elements also alters the game structure since players holding digital governance tokens have a vote in the game’s future direction, creating a more decentralized game that is managed by the fans, not large enterprises.
Now, let’s delve into the popular GameFi phenomenon that is play-to-earn (P2E) games.
Play-to-Earn (P2E) Games
P2E, or Play to Earn, is a new approach to playing video games that is central to all GameFi products. It’s a huge departure from the way most games function, where you pay to enjoy the game.
New players in play-to-earn games must deposit a small sum before they can start to play. Currently, blockchain game developers must purchase licenses or renew memberships to create video games.
Most conventional online games do not pay participants, and the developer looks after its assets. In the P2E paradigm, the gamer has complete ownership of their in-game assets because they’re in the form of NFTs.
Play-to-earn games offer players complete control, revenue, and earning possibilities.
Playing a GameFi Game
The specific guidelines for each blockchain game vary, but most games need users to have a loaded wallet and purchase a few products in order to join. Here’s a short step-by-step guide:
Get a Crypto Wallet
Acquire a cryptocurrency wallet that works with the game you wish to play.
While crypto wallets do not keep money in the same manner that regular wallets do, they do keep private keys connected to crypto assets, allowing you to quick and easy to access, transfer, and receive Bitcoin.
There are several wallets and currencies available; however, most games need specific wallets to function.
To find out which wallets are supported by a certain game, go to the official web page.
Connect the Wallet
The majority of today’s popular GameFi games are played through a browser. As a result, to participate in the action, you’ll need to check in using the wallet you set up previously. To do so, go to the website and find the option to link the wallet.
This will also be your log-in method for the game. Contrary to conventional online games, which require you to set а username and password or provide your email id, blockchain games use your cryptocurrency wallet as your account. As you link the wallet, be sure you’re connected to a legitimate website and not a fake one.
Load the Wallet
Regarding blockchain games that do not allow the user to earn their initial couple units of cryptocurrency through gameplay, players must fill their wallets in order to participate actively.
The specific cryptocurrency will be determined by the game, and it may take a while to get the exact crypto you need.
For instance, to start playing in the play-to-earn game Gods Unchained, you must first load the wallet with the in-game currency, $GODS.
Although funding your wallet will not always be difficult, it is crucial to understand that the procedure might be complicated.
Understand the Requirements
Most blockchain games require players to purchase crypto tokens or their own currency. The requirements differ in every game, but you must always weigh the income potential with the overall risks.
Next, figure out how long it will take to get your initial investment back and start collecting rewards. You should have three Axies in your wallet to start fighting in Axie Infinity. They can be ordered from the in-game Market.
Buy the Starter Pack
Even if you get GameFi games for free, you probably cannot play them until you contribute to the metaverse with a purchase – usually a character, weapon, or ability. These products can be costly.
Note: Remember that, like anything on the web, GameFi has a number of scams, so keep an eye out for phoney websites. Also, a wiser strategy is to open a different crypto wallet for each new game. This way, you’ll avoid losing coins that you’ll have a hard time getting back.
Benefits of GameFi and the Gaming Industry
We’ve established what GameFi is, so let’s move on to its advantages. Some of them are easy to guess, but let’s mention them explicitly:
Players Can Earn Money
Gamers can engage in blockchain gaming to earn NFTs and make money. As a result, blockchain-based gaming may provide new job prospects.
Players Have Ownership
In-game NFTs may be incorporated into decentralized games to boost their profit potential and offer players actual asset ownership.
In-game objects are not owned by the game developer since they may be acquired and exchanged on a public blockchain ledger. Furthermore, no in-game object may be forged or changed.
Players are certain that all their in-game items are safe, even if the developer studio experiences a technical difficulty.
Players Have a Say
Game designers do not always respect the views of players. For example, they are accused of promoting sexist mindsets and encouraging users to pay for more material. In the GameFi project, users have a say in the game’s future direction and many factors such as startup fees.
Players are Easy to Learn
GameFi projects use basic gaming techniques, which makes them simple to learn and navigate. This straightforward technique lowers the entry barriers, resulting in significant acceptance.
Video Games vs GameFi
Conventional video game users can also collect in-game dollars and acquire gaming assets to help their avatars level up (game levels).
However, these currencies and gaming items cannot be sold outside of the game. Beyond the game’s framework, they have minimal use in most scenarios.
Even if they do have some merit, gamers are usually prohibited from marketing or trading their items in actual life.
In blockchain gaming, the currency and items are usually cryptos and NFTs. Some games use digital assets rather than cryptocurrency or NFTs, but gamers can still convert their currency into NFTs if they like.
This means that gamers may put their earnings into crypto wallets and exchange them on Bitcoin exchanges or NFT marketplaces. They can then convert their Bitcoin profits into fiat money.
Gamefi Development and Blockchain Games in the Near Future
The growing popularity of GameFi is expected to continue with the advancement of blockchain. Furthermore, GameFi’s ability to own in-game assets and make money from such games makes it extremely popular, especially in developing countries.
GameFi ventures have captivated both sponsors and gamers by utilizing enticing themes, gaming tokens, and DeFi features. The ability to own digital assets, play for fun, and even profit from it will undoubtedly appeal to traditional players and normal users, contributing to the expansion of the GameFi community.
Another factor driving the widespread acceptance of GameFi will be the rising popularity of the metaverse, which will transform it into a valuable sector for both gamers and game developers.
GameFi games will likely gain a massive fan base rapidly, leading to greater activity in this business and its digital applications. Furthermore, a new game engine and gaming systems such as MOBOX are being established to help players in creating their own NFT games with DeFi capabilities and earning money while playing.
So now is the time to consider a potential specialization that will set you unique in the GameFi industry.
The number of GameFi projects surged considerably in 2021, and this trend is projected to continue in the coming years. Furthermore, popular games are now available on a wide range of blockchains, including ETH, Bitcoin, Solana, and many more.
With its unique advantages for the gaming industry, the GameFi sector has enormous potential. These blockchain-based projects allow users to own the in-game assets and sell or apply them in certain ways to generate more revenue.
Also, they give gamers far more influence over gameplay than traditional online games. As these games gain traction, so make their game developers’ profits.
Whether you’re a general user or an active P2E gamer, it’s always best to learn more about these developments and use the opportunity to make money and have fun at the same time. Fortunately, that’s exactly what we do at ICODA. Contact us, and we will give you the answer to your questions.