GameFi: The Future of Gaming with Blockchain

Imagine living in a society where playing video games is the only way to earn money. Money that helps with bills and keeps food on the table, not bogus in-game currency. Imagine that all of a game's assets, including the characters, clothes, and weaponry, could be purchased and sold in the real world.

 

In a word, this is what GameFi, one of Web3's trendiest industries, promises. In the blockchain and gaming industries, GameFi is a recent invention that has gained a lot of popularity. Blockchain video games are attracting traditional video game players who are used to paying to play online games since they allow them to be compensated for their time and work. And some of the most active players in space claim that it is a reality that is not too far away.

 

GameFi, which straddles the line between gaming and decentralized banking, is getting a lot of interest from the crypto community. The enticing elements that GameFi has combined are reshaping how players and investors interact with digital experiences and online games, from owning assets to earning money by playing our favorite game.

 

You might want to learn more about GameFi as it continues to lead the pack of technological advancements that are reshaping the gaming business.

 

What is Game-Fi?

 

As was already mentioned, Andre Cronje, the CEO of Yearn Finance, first used the phrase "Game-Fi" in a tweet in 2020. It is a mix of the words "game" and "finance." GameFi is a platform that combines blockchain technology, non-fungible tokens (NFTs), and game mechanics to build a virtual world where users may interact and earn tokens. 

 

They are also known as play-to-earn (P2E) games. The foundation of GameFi is the convergence of blockchain technology, gaming, and other decentralized financial products, such as algorithmic stablecoins, yield farming, non-fungible tokens (NFTs), borrowing, and lending.

 

According to industry veteran Tracy Spaight, GameFi is one of the video gaming industry's fastest-growing divisions. Spaight, who has more than 20 years of experience in game creation, is currently the head of the gamification at Synesis One, which is reputedly the first DAO for data yield farming in the world. The "new sort of ownership" made possible by the industry's structure, he claimed, excites him the most about GameFi, despite the fact that the sector is still relatively young.

 

Video games were previously stored on centralized servers that belonged to a gaming business, which had the implicit authority to turn the world off whenever they pleased. 

 

Additionally, players didn't actually own the things they gathered through their characters, including the clothes, weapons, and rewards. Everything just lived within the boundaries of the game; it had no real value outside of the game. Because GameFi goods are decentralized and rely on blockchain technology, that isn't the case with them.

 

In typical video games, the in-game items you buy have no worth outside of the game's setting. Although players make financial investments to acquire these properties, they do not have full control over them. Through the use of blockchain technology, cryptocurrencies, and De-Fi goods, GameFi alters this idea.

 

Nearly all of these blockchain-based games come with an associated in-game currency, a market, and a token economy, which are often run and regulated by the community. With this paradigm, players control their in-game possessions rather than developers, negating the necessity for any kind of server infrastructure and obviating the potential of cheating or hacking.

 

The idea of GameFi has introduced the world to a new use case for cryptocurrencies by creating an economic model of earning money while playing. 

 

GameFi's appeal is largely due to the fact that, in contrast to traditional games, the environment is not governed by a single entity. Additionally, the zero-fee transactions made possible by the underlying blockchain technology enable players to purchase, sell, and trade digital assets without paying any fees.

 

Also Read | Top 7 Play and Earn Blockchain Games in 2022

 

Before moving on, let's examine GameFi's primary parts in greater detail:

 

• Blockchain: 

 

The underlying technology behind GameFi platforms is blockchain. The Ethereum network is used to build the majority of blockchain games, other GameFi protocols like Polygon, Polkadot, and Solana are also growing popular because of their faster speeds and better capacity. 

 

In addition to enabling player ownership, running a game on a blockchain's distributed ledger guarantees that all transactions are open, transparent, and fair.

 

• Non-fungible Tokens (NFTs): 

 

NFTs are used in P2E games to represent assets and facilitate market transactions. NFTs can be traded for other NFTs, cryptocurrencies, or fiat money in-game. 

 

P2E NFTs, as opposed to conventional online games, guarantee that every in-game asset is distinct and that it is impossible for it to be copied or faked in any way. Many P2E games aim to motivate players to go through levels while earning virtual currency and developing their virtual personalities (or avatars).

 

Also Read | NFTs and their role in Architecture

 

• Play-to-Earn Model: 

 

GameFi will pay you for simply playing, in contrast to play-to-win games where users must pay to enter and progress via gameplay. As you go, you'll gather money and NFTs, which are digital valuables. 

 

Players typically have to do objectives, such as completing daily missions and winning fights, in exchange. These resources have value and can be bought, sold, and traded on the market.

 

• De-Fi Components: 

 

Decentralized finance (De-Fi) components are incorporated into several GameFi initiatives. Some of the best GameFi games allow users to earn passive income by staking tokens, while others may let you gain in-game incentives via yield farming, which is locking your in-game currency and assets in smart contracts.

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Difference between Normal Gaming and GameFi

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How does GameFi function?

 

GameFi mostly refers to blockchain-based games that provide financial incentives to players and is distinguished by its "play-to-earn" business model. This implies that playing these games and passing new levels in them earns players money. 

 

NFTs, in-game tokens, and bitcoin make up the majority of the rewards. When players gain in-game tokens, they may exchange them for more well-known cryptocurrencies like Bitcoin and Ethereum, which can subsequently be converted into fiat money.

 

It is important to note that the idea of "playing to earn" is not brand-new. Due to the cutting-edge technology that underpins GameFi applications with a play-to-earn business model, there is still a lot of hype about them. 

 

There are several aspects of these games that distinguish them from other types of games and make them a better option, ranging from blockchain technology and smart contracts to in-game tokens.

 

The majority of Game-Fi projects offer NFTs in the form of land, clothes, gear, and skins. These NFTs can be bought and sold outside of the game as well as used as collateral and for yield farming on De-Fi platforms.

 

The Game-Fi area has a variety of games, each with its unique mechanics and specifications. One such requirement is that users have crypto wallets in which to keep their in-game currency. However, your wallet needs to be pre-loaded with bitcoin in order to function. In order to start playing several games, users must acquire starter characters.

 

How to get started with GameFi?

 

1. Make a cryptocurrency wallet: 

 

You'll need an ETH wallet, such as Trust Wallet or MetaMask, that supports GameFi in order to enter the GameFi universe. Depending on the game you're playing, you could also need to use various wallets or connect to different blockchain networks.

 

For instance, you must first connect your MetaMask to the BSC network in order to play blockchain games on the BNB Smart Chain (formerly known as the Binance Smart Chain). Use Trust Wallet or any other compatible cryptocurrency wallet as well. To find out who the game supports, visit the game's official website.

 

2. Integrate the game with your wallet: 

 

To access the majority of the games on the Ethereum network, link your ETH wallet to the Ethereum blockchain. To conserve money and enhance performance, certain games, like Axie Infinity and Gods Unchained, will generate their wallet.

 

Although the Ronin network was created as a sidechain, Axie Infinity is based on Ethereum. As a result, in order to interact with the Axie Infinity ecosystem, you must use the official Ronin Wallet. The cost of breeding and trading Axies is significantly decreased by the Ronin network as a sidechain, which lowers the overall cost of playing.

 

Also Read | How to Create an NFT Wallet for Yourself?

 

3. Verify the game's prerequisites: 

 

The majority of GameFi initiatives demand that you acquire their in-game NFTs or cryptocurrency tokens. Every game has its own set of requirements, but you must always assess the potential rewards against the overall risks. Next, determine how long it will take for you to start profiting from your initial investment.

 

You need three Axies in your game wallet in order to play Axie Infinity. The Axie Marketplace is where you may buy them. Axe purchases can only be made using wrapped ETH stored in your Ronin Wallet. You can buy ETH on cryptocurrency exchanges like Binance and then use the Ronin bridge to transfer it to your Ronin Wallet.

 

Metaverse and GameFi 2.0:

 

Though the GameFi idea is still very young, the move to play-and-earn heralds the arrival of the "GameFi 2.0" era. Because video games are a kind of entertainment, winning money should never be the primary goal. Sadly, this paradigm has been distorted by the play-to-earn features, which have led to the development of numerous unstable gaming economies. 

 

Games can still change course since Axie Infinity has demonstrated the viability of a two-pronged strategy with its brand-new Origin mode. The lack of initial outlay is what distinguishes Origin. To start dueling in Axie Infinity, you need to own three NFTs. A few hundred dollars are demanded from users before they can begin playing a game they might not even like. 

 

A free beginning pack from Origin lowers the entrance hurdles and makes GameFi 2.0 more accessible to players. More significantly, it emphasizes the value of putting gaming first rather than creating a game economy and then designing game components around it. GameFi 2.0's development could determine the success of Web3 gaming and, consequently, the allure of the metaverse. 

 

To emphasize the significance of this paradigm shift, the MonkeyLeague team, a play-and-earn football game, will hold a GameFi 2.0 roundtable discussion. There will be a lot of discussion about the current state of Web3 gaming and initiatives to encourage the wider use of blockchain games and cryptocurrencies.

 

Also Read | How is Blockchain transforming the Gaming Industry?

 

GameFi & The Metaverse's Future:

 

The metaverse needs to be valuable to users in order to succeed. Incentive programs, user agency, and control can accomplish this. GameFi will contribute to ensuring the metaverse's future decentralization.

 

GameFi can be a useful tool for increasing user interest in the metaverse since it gives users the ability to affect change. The metaverse will attract greater investment and developer support as more individuals decide to participate in it and take advantage of its benefits.

 

Engagement with GameFi will also strengthen the digital economies of the metaverse. The metaverse will flourish once there are more options for utilizing your digital assets.

 

Summing Up: The Future prospects for GameFi

 

With an estimated 3.24 billion players worldwide, the developing GameFi industry has enormous growth potential. Investors invested more than US$3.6 billion in cryptocurrency gaming firms in 2021 alone, making it a watershed year for the developing sector.

 

Given the popularity of Axie Infinity and other GameFi platforms that use other blockchain protocols, it is apparent that GameFi is on the verge of a successful future. However, because blockchain technology is continually developing, it is difficult to forecast what new features and technologies will define future GameFi platforms. 

 

Future blockchain developments will undoubtedly be far more intelligent, but it is still unclear how GameFi efforts and potential new revenue streams will be affected by these developments.