The topic of this article is What is GameFi? We will give you information about this subject.
GameFi has become a very popular concept in the gaming and blockchain industries lately. Traditional video game users, accustomed to paying to play an online game, are instead attracted to blockchain video games, where their time and effort can be rewarded.
In this article, we explain what GameFi consists of, how it works and what the prospects are for the future of GameFi:
What is GameFi?
In simple terms, we can define GameFi as a combination of video games (Gaming) and decentralized finance (DeFi). The technology used for such video games is blockchain technology, which allows players to become sole and verified owners of the game’s virtual items.
In traditional video games, the dominant model is “pay to win”, where players must pay to gain an advantage, such as an upgrade, reduced cooldown, or purchasing a virtual object.
GameFi, on the other hand, introduces the “play-to-win” model. In this case, players are people who make money thanks to their knowledge or time spent.
It is important to emphasize that in GameFi games users need more than luck to win. Reward-generating events vary by game, but generally reward skills and require strategy.
How does GameFi work?
As mentioned earlier, the ways to earn rewards vary by game. However, most GameFi projects share the following features:
NFTs – Unique Tokens
NFTs are digital assets created using blockchain technology. Unlike exchangeable tokens, NFTs are unique, indivisible, and have an owner.
As in traditional games, users can access avatars, animals, houses, vehicles, etc. represented in the NFT. they may have. From there, users can spend their resources developing their digital assets and then exchange them for cryptocurrencies, thus making an extra profit.
DeFi – Decentralized Finance
DeFi is an experimental form of finance that does not rely on centralized financial intermediaries such as banks and instead uses smart contracts on the blockchain.
For example, some GameFi projects allow gambling. Players can thus block some of the tokens to earn some interest.
What is Required to Play on GameFi?
In general, most games require the following steps to start playing:
1. Create a Wallet
Unlike traditional games where you need a username and password, games using blockchain technology require you to identify yourself using a wallet.
Depending on the game, you will need one type of wallet or another. For example, the famous game Axie Infinity requires an Ethereum compatible wallet.
2. Add Money to Your Wallet
To complete step 3, you need to add funds to your wallet. Depending on the game, you will have to use one or another cryptocurrency.
The Cryptoblades game, for example, requires users to download MetaMask, purchase the currency Binance (BNB), and exchange the game for the native cryptocurrency SKILL.
3. Buy Essential Digital Assets to Play
Most GameFi games require you to do this through your avatar or similar digital assets to make a profit. This means you will need to purchase them before playing. For example, Axie Infinity requires its players to have three Axies in their wallets to start playing.
How Can a Game Be Decentralized?
Traditional games operate in a completely centralized way, with some exceptions. The studio is responsible for designing, producing and publishing the game as well as updating it.
Most GameFi projects look for the opposite: they aim to involve the players themselves in the decision-making process.
This process is known as DAO – Decentralized Autonomous Organization. To join a DAO, the player must first have a “management token”. The amount of tokens will define the power the player has.
GameFi Project Examples
Some of the best-known examples of GameFi projects include:
Axie Infinity is an NFT-based online video game developed by the Vietnamese studio Sky Mavis that uses Ethereum-based cryptocurrency AXS and SLP.
This game allows players to collect, breed, fight and trade creatures known as “Axies” (axolotl-based characters), which have been digitized as NFTs.
Decentraland is a virtual world managed by its users. Every piece of land and every element in the virtual world is an NFT. In early 2021, Decentraland had an average of 1,500 daily active users. It reached 10,000 in March.
CryptoBlades game offers its users a platform where they can enter the war. Winners after fighting opponents get SKILL tokens. They can then change their avatar and team or bet on SKILL tokens.
Sandbox is a virtual Metaverse where players can play, build, own and monetize their virtual experiences. Sandbox’s native token, SAND, is basically used in the Sandbox ecosystem for all kinds of interactions and transactions in the game.
The Future of GameFi
GameFi projects have been on the radar of game users and investors for months. The growing popularity of the concept of the metaverse and cryptocurrencies is helping to re-launch an industry that has already traditionally held a very important weight.
The best example to understand what the future of GameFi might be is by analyzing the evolution of current projects like Axie Infinity.
North American company Fold has announced a collaboration with California-based Niantic to develop an augmented reality video game that will allow earning Bitcoin. Fold AR will be a kind of Pokémon GO designed to receive cryptocurrencies while playing.
Undoubtedly, we will see a lot of movement in this sector and all related technologies in the coming years.
If you are having problems with your exchange, you can click here and buy safely by registering! Plus, you pay a lower commission fee!