The name GameFi echoes blockchain games of the “Play to Earn” type. Games through which users can be rewarded for playing. Whether through tokens or NFTs. Unlike traditional games, the “Play to Earn” game allows you to export elements outside the game. On an NFT marketplace for example. Focus today on this concept of GameFi which was notably highlighted by the success of the game Axie Infinity.
The term “GameFi” revolves around two words: game (game) and finance. Axie Infinity has shed considerable light on the GameFi universe. The branch has since largely established itself in the video game sector, attracting players from all over the world.
It must be said that the promise of making money while having fun is attractive on paper. Players earn rewards by completing certain tasks or progressing through different levels. The GameFi universe gives pride of place to digital assets, non-fungible tokens (NFTs) and blockchain technology more broadly.
If we take the example of Axie Infinity, the game allows players from all over the world to compete through their pets (the Axies). Obtaining a certain rank in the game also allows you to obtain rewards in AXS. The two in-game currencies (AXS and SLP) can then be used to breed new virtual pets that can be resold on an NFT marketplace.Good to know: The volume of NFTs sold on Axie Infinity recently exceeded $4 billion . This is the largest volume in history for an NFT project.
How does GameFi work?
Player rewards may vary significantly from one GameFi game to another. In some cases, this will be the native token of the project. In others, players may be rewarded with NFTs such as avatars, customization items for these avatars or even virtual land. These NFTs can then be sold on a specialized marketplace.
Games in the GameFi sector are often articulated in such a way that the possession of certain assets opens the right to even more rewards . This is particularly the case of the Sorare platform which requires investing in rare cards to claim the most interesting rewards. Other games prefer to focus on pure “skill” and the customization tools are purely cosmetic.
“Play to Earn” type games
The “ Play to Earn ” (P2E) model is at the heart of the GameFi sector. With this mode of play, it is in principle a question of reversing the monetary relationship between the publisher and the player. It is no longer the player who pays to play but the developer who pays for the player to play. The philosophy of P2E is therefore the opposite of those of world-famous licenses such as Fifa or Call of Duty.
Unlike traditional video games, Play to Earn games allow players to control their in-game assets . And even to use them outside, especially when it comes to selling them on NFT marketplaces. If blockchain technology allows more freedom to players, not all P2E games are equal on this point.
Thus, it is important to understand how each game works before jumping into it. As we mentioned, some P2E games are totally free . While others require to invest beforehand before being able to launch.
The link between GameFi and DeFi
It is no coincidence that the two terms share some of the same terminology. Like some DeFi protocols, GameFi games allow players to grow their assets over time.
Thus, there are certain GameFi protocols that integrate the possibility of staking, farming or extracting cash from your account. Players can also wager their tokens to earn new rewards or unlock exclusive items.
GameFi protocols also make it possible to decentralize the world of video games. Indeed, some protocols include the possibility for players to co-construct the universe and vote for decision-making. These votes are often organized around DAOs which are autonomous decentralized organisations. If we take the example of Decentraland, players can vote for certain decisions by locking their MANA tokens within the DAO. As in the stock market universe, the more tokens you own, the higher your voting power will be.
How to get started in GameFi?
If you want to combine business with pleasure and get started in the GameFi sector, here is a quick presentation in a few steps. Either way, it’s important to fully understand how the GameFi game you’re targeting works.
- Create a crypto wallet like Metamask or Trust Wallet . Tools needed differ by GameFi game
- Connect your wallet to the game.
- Know the requirements to play. From one game to another, the conditions also vary. Some GameFi games require purchasing the project token in order to start.
What future for GameFi ?
2021 will have been a crazy year for GameFi projects. In the years to come, the prospects are also very interesting. Last March, the DappRadar platform already referenced more than 1,400 blockchain games . And this number should continue to climb. If the universe is dominated by the Ethereum blockchain, other alternatives exist. Thus, today we find several games operating under the BNB Smart Chain (BSC), on Harmony or on Solana.
For many users, GameFi is a way to make ends meet. This system is now very popular, especially in developing countries. The even more general adoption of GameFi games will only be possible through a growing adoption of blockchain technologies .
The universe of the metaverse and the fantasies it opens up should also make it possible to offer an experience and a field of expression for GameFi games. In the longer term, some even imagine that the niche could represent the future of video games.