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What is GameFi?

Overview

GameFi is the culmination of gaming (finance and game), allowing players to invest real money and benefit from actual game play. But how is this possible? How may playing games online lead to actual financial gain and the acquisition of cryptocurrency? The ability for developers to build an entire financial economy within the game is made possible by the power of blockchain technology, particularly NFTs.

Elements of GameFi

Although the initiatives at GameFi are varied, they typically center on the following things:

NFT

Characters in video games are NFTs that differ between games. For instance, in Cyball, the players are NFTs; but, in Mines of Dalarnia, the players take on the roles of miners, while the NFTs serve as the monkeys’ companion parrots. 

NFTs are typically sold as part of a fundraising campaign. This method of starting a sale is comparable to selling tokens, with the exception that there are no prerequisites (Staking, obligatory ownership, etc.) for purchasing NFT.

Token

Most modern games have two tokens: 

  • Administration Token: This is the game’s primary token. This token will aid the community in running the game, much like ordinary initiatives do. This token will have limited availability. 
  • Bonus Token: This is a token that awards players for taking part in activities and may be used in-game. Quantities are typically limitless.

Mechanism of GameFi

GameFi is the project’s method of combining various processes to provide a balance for in-game tokens and incentive systems. In initiatives that focus on creating a sustainable economy, users are frequently rewarded for engaging in PvP or PvE interactions with bots and performing routine jobs (login attendance, complete the request from the system, …). 

Additionally, there are ways to use these tokens, such as breeding (which creates new characters), token withdrawal fees, etc. Lastly, a word on NFTs. These NFTs are typically necessary to play the game (to play Cyball or Axie Infinity, you need 3 NFTs). If Breeding produces an excessive amount of NFT, the NFT also has a balance mechanism through burning.

GameFi and Metaverse

To give people the most realistic experiences possible, the Metaverse is a virtual environment made using the Internet and augmented reality tools (such as VR, AR, or other devices). The metaverse is regarded as a setting that promotes unrestricted creation and interaction

While the Metaverse is an open world, GameFi projects seem to be locked worlds where users cannot influence or add anything. Additionally, GameFi focuses on maximizing capital as well as the improvement of the “earn” or “finance” components. As a result, innovation will also be severely constrained. 

It is widely accepted that in a Metaverse, a miniature economy must first develop. Apparently, the element of “money” will also need to exist, but that’s not all, because in that open universe, there are also many other aspects like creativity, interoperability, and development.

Therefore, GameFi itself is not Metaverse, but it plays a very important role in the development of the concept. In reality, simple Metaverses can be seen existing in the form of games like Minecraft, Roblox, GTA V, and many other examples. Besides, a few appearances of Metaverse can also be seen in the form of social networks.

Moreover, currently, traditional companies with a vision to build a true Metaverse are based on a game. Therefore, it can be affirmed that the Game is a very important piece to form the Metaverse.

Outstanding GameFi Projects

Axie Infinity

Despite still being in its early stage, Axie Infinity has made a sounding name for itself by being ranked #1 Ethereum game from daily, weekly, and monthly community votings. Its cumulative ETH has reached 13,000, translating to over 16 million US dollars. The project of Axie Infinity was operated out of the belief in the bright future of NFT games.

The token used in this game is Axie Infinity Shards ($AXS), which holders can claim from staking, participating in the gameplay, or attending and contributing to communal activities, such as voting. What’s more, interactions with the Axie community can earn users rewards, along with holding onto the $AXS tokens. 

BombCrypto

The Bomb Crypto is a BCOIN-powered Bomb gaming experience for NFT collectibles. Monsters can be gathered, fought, and traded for real money by players. 

In the Play-To-Earn game Bomb Crypto, users take control of a squad of cyborg bomb heroes trained to hunt for BCOIN and battle enemies. Each bomb hero has a different set of attributes; if you’re lucky, you can find bomb heroes with strong numbers to sell or upgrade to improve their functionality and battle prowess. You can seek for additional NFT goods as decorations beside having NFT heroes.

Decentraland

Decentraland is an NFT game that presents players with a bounded 3D virtual world, where the LANDs are situated adjacent to one another, and also are the NFTs of this game. Multiple LANDs can be grouped and formed into communities called Districts. Players with shared interests would create their own Districts for multilateral benefits between each other. 

Decentraland’s token is $MANA, which can be used to buy LANDs and in-game goods. They are currently facing the problems of having low downloading speed, unavailability of content for certain parts of the network, and inappropriate content that has to be filtered, but they will be able to solve these problems in the near future. 

Conclusion

GameFi is a familiar concept that has seen its glory. As a matter of fact, a lot of people have taken their first steps into this field since COVID-19 struck the world and its economy. Even well-known streamers and gamers have started to switch to NFT gaming, and big names in the game industry, such as EA Sports, Activision, Blizzard also showed great interest in going down the route of NFT games.

However, there are still obstacles that GameFi has to face and overcome in order to thrive in the future. GameFi projects have gradually lost users’ interests, but if GameFi creators put effort into realizing and reversing the hardships, it is easily going to be a major part of the crypto world in the long run.

 

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