GameFi is a hot new trend to emerge from the crypto industry, combining decentralized finance (DeFi) and non-fungible tokens (NFTs) with blockchain-based online games.
Unlike many traditional online games, which operate on a “pay-to-win” model and allow players to purchase upgrades in order to gain an advantage over others, GameFi introduces a “play-to-earn” model. This concept involves giving players financial incentives to play and progress through games. In some cases, this has allowed gamers to earn a full-time income by doing so.
How it works
All objects in these types of games are expressed as NFTs – digital tokens used to prove ownership of scarce intangible items. Think of things like plots of land, avatars, costumes, weapons and gold bars. Once players find and accrue these items through gameplay, many have the option to trade these with others in digital marketplaces for different NFTs, or sell them in exchange for cryptocurrency.
Depending on which game is played, users can increase their earning potential by dedicating time leveling-up and improving their characters, creating monetized structures on their land that other gamers pay to use or by competing against others in tournaments.
In order to keep track of what every player owns, all NFTs and cryptocurrency transaction data are stored on a public blockchain. This is a type of distributed, digital record-keeping technology maintained by a global network of computers. Leveraging this technology in gaming provides a number of benefits, including:
- Players can easily prove ownership of their in-game items.
- There is no single point of failure, meaning players will no longer be at risk of losing track of what they own if the underlying gaming company experiences technical issues.
- Items accrued during gameplay cannot be counterfeited, removed or destroyed.
- Game-native cryptocurrencies can be sent and received without the need for intermediary settlement, clearing or custody.
Some games also include DeFi elements such as staking, where players can lock away certain tokens in order to earn annual interest and other rewards they can save to purchase other in-game items or unlock new content.
What you need to play
In order to take part in any these play-to-earn games, users will need to do the following:
- Create a cryptocurrency wallet: To store their virtual currency and NFTs, and make in-game transactions. Which wallet you need will depend on which blockchain the game was built upon. For example, MetaMask – an Ethereum-based crypto wallet service – will work with any GameFi game built on Ethereum.
- Purchase starter items: All GameFi games are free to download. However, many require players to first purchase characters, native crypto tokens, decks of cards or upgrades in order to begin.
- Pre-funded crypto wallet: You will need to pre-fund your crypto wallet with a particular cryptocurrency in order to purchase starter items and proceed. Cryptoblades, for example, requires users to download MetaMask, purchase Binance coin (BNB) and exchange it for the game’s native cryptocurrency, SKILL.
Traditional gaming solutions have explored blockchain gaming as they gradually make the switch over to blockchain and play2earn. The rise of NFTs and the financial incentives these games provided, make many of them get mainstream recognition very fast.
Play-to-earn came to prominence in 2017 with the popular CryptoKitties, whose mass adoption eventually clogged the Ethereum blockchain back in 2017. However, as more developers test the waters with amazing releases in GameFi (a term used as a combination of Blockchain Gaming and DeFi), there became a need for a solution to become an aggregator.
GameFi allows players to monitor the latest releases across platforms and get the best NFT deals. Developers are also exposed to the right technology and education that will put them on track. In addition, the GameFi marketplace auctions unique NFTs across platforms, making it easier for users.
This is just a basic introduction on how to get started. For more on this follow our community forum and visit again for more news and information on this fast changing space.