What is GameFi?
The name GameFi is a combination of two words: “game” and “finance”. In most cases this means an offer to play and receive a cash reward if you win. You can identify a GameFi product by the following “markings”:
- use of blockchain technology;
- business model called “play-to-earn” (where a reward is most commonly a cryptocurrency or NFT);
- Possible use of decentralized finance (DeFi), such as B. Yield farming, liquidity mining and staking (which is also an additional way to increase your earnings).
How does GameFi work?
GameFi not only offers cryptocurrencies as a reward, but also other assets. These include virtual land, weapons or avatars; The specific reward depends on the game you select. The system in most games provides rewards for completing tasks or battles with other players, as well as creating monetized structures on the virtual land.
The uniqueness of the GameFi model lies in the use of in-game assets that run on the blockchain and can be used on NFT marketplaces. This gives users certain benefits as well as even greater rewards and prizes. Players can also earn passive income either through staking (the process of storing funds in a cryptocurrency wallet to support all transactions on the blockchain) or by renting out their gaming resources to other players.
Most GameFi projects require in-game purchase of tokens and NFTs. The requirements vary by game, but you should carefully weigh the potential earnings and any potential risks that come with losing.
What are “blockchain games”?
This can be broadly defined as a blockchain technology that ensures everyone has a copy of what they are playing and not just an entity. Actions on the blockchain are governed by a smart contract. Blockchain games use the same technology as cryptocurrencies, which means they include Bitcoin and Ethereum. Blockchain technology allows players to make their characters unique.
The most popular games in 2022 include Decentraland (MANA), Axie Infinity (AXS), The Sandbox (SAND), Gala (GALA) and WAX (WAXP). For example, in Decentraland’s virtual world, you can create and develop an avatar. Thanks to its NFT market, you can buy various items and clothing for tokens.
What’s going on in the gaming industry?
Over the past decade, mobile gaming has outpaced the growth rate of the massive video game market and is estimated to generate $136 billion this year, compared to $86 billion combined for PC, console and handheld games.
Mobile games have thus become a major driver of the entire market. Developers of traditional console and PC games decided to copy their “golden” business model: free games through in-game purchases. Now games like Fortnite and Call of Duty build on this strategy.
The trend towards in-game purchases is organically linked to crypto technology. Several major game developers (such as Square Enix and Ubisoft) have announced their intention to use NFT in their games to allow players to win, earn, and trade unique items within the game.
This idea is not popular with all players, especially since many consider crypto tokens to be a waste of energy. This is due to the immense computing power required for their function. However, game publishers are clearly touting the upcoming convergence of games and NFTs and are already spending to make it a reality. This is likely to become a reality, especially given recent developments with the Ethereum network upgrade – “The Merge” – which promises 99% more energy efficiency.
The gambling industry will grow regardless. Most gamers look forward to the products of Unreal Engine 5, a game engine that takes a step forward in terms of creating geometry, lighting, and animation. It has been confirmed that several well-known and lesser-known games are already using the platform. Another factor contributing to the growth of gaming market share is cloud gaming technology. The cloud platform is used for storing and streaming games. Therefore, computers with less memory and processing power can access it. Thanks to the use of cloud-based games, it will be possible to play on any device.
How can blockchain affect gaming?
Improved user experience. Gamers will have more control and will be able to participate in digital transactions more efficiently, securely and transparently with the help of blockchain technology.
Obtaining rewards and resources. While traditional games reward players with points that have no monetary value in the real world, GameFi offers real rewards.
Attribution of intangible assets. Humans project the value of intangible assets. The future belongs to the industries that catch up with this trend.
Integrated Profiles. Users can create a single profile for different platforms, making it easier to navigate between games and purchase items.
P2P Transactions. Blockchain allows players to trade virtual assets in-game.
More efficient monetization. Developers will efficiently access monetization of their gaming services using blockchain, which will also provide fast and secure payment networks.
Virtual events and competitions. Decentralized and secure transactions between users and automatic monitoring of data from any network give gamers an easy way to get the most out of blockchain gaming.
Greater Commitment. It is impossible to unilaterally shut down your blockchain DApp game or change it without the consensus of the gamer community. The technology will allow players and developers to work more closely together.
Conclusion
Blockchain creates a supportive environment for game developers and entrepreneurs, helping to control the buying and selling of assets. Blockchain can really transform the gaming industry. A secure environment, protection of trading platforms and untraceable resources contribute to this. It also includes an improved user experience, integrated profiles and rewards.
Dmytro Prysiazhnyuk, Co-Founder and Chief Product Officer at Crypto Crew.
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