A play-to-earn crypto model, GameFi is a massive attraction for players and investors in the digital world.
Let us begin with what is GameFi.
“GameFi” is a shortened term for a combination of two words, namely ‘Game’ and ‘Finance.’ The intersection of decentralized finance and gaming led by blockchain technology and Non-Fungible Tokens in a virtual environment is what makes the GameFi crypto.
GameFi throws light on the existing online gaming industry and reshapes it by monetizing the wins. This is an engaging theme introduced by Andre Cronje, (CEO of Yearn Finance) and it grabbed enough attention from online gamers. Making money and owning assets by simply playing your favorite game is progress in digital experiences.
In a nutshell, the GameFi project is a fusion of blockchain (NFTs included), cryptocurrency, and decentralization. But, how does it work? Study further, below.
Mechanics of the GameFi
A fairly modern yet fast-expanding concept, GameFi projects are developing with the motif of transforming the entire gaming industry with play-to-earn (P2E) and Decentralized Financed (DeFi). In GameFi, the games are played to own rewards. Completing levels, winning a game/match, battling with other players, designing apparel, and building infrastructures result in earning and owning assets. The rewards come in the form of avatars, costumes, powers, weapons, assets, virtual lands, and cryptocurrencies.
These in-game rewards are powered by blockchain technology, and they can be used for trading in NFT marketplaces. This opens doors to a new way of monetization. The players not only get ownership over their game but all the transactions made are also fair and open.
What makes it different from the usual?
In traditional online games, the players do not have control over digital assets for their hours of hard work spent in games. This is not the same with GameFi projects, there is no centralized authority and it allows real ownership of collectibles earned during gameplay.
By trading gaming rewards in NFT marketplaces, the players can make earnings in crypto and do transactions on different digital platforms. The players not just play games and make an income from them, but they also earn profits by investing.
The GameFi tokens- explained
Anything that is invested with an intention of profiting from the future is classified as a security. The GameFi tokens integrated as NFTs and cryptocurrencies are categorized as securities. This provides gamers access to blockchain games from which they can make a subsequent income. The gamers may sell or barter ownership of gaming levels in exchange for real money. This impacts the DeFi ecosystem by stimulating stalking, liquidity pools, yield farming, and mining.
If you too are a gamer, you can get started in three simple steps:
- Open a crypto wallet,
- Link the wallet with the game, and
- Add minimum crypto funds to start with your game!
To conclude,
GameFi mixes finance with entertainment. It majorly solves the loopholes that gamers faced with the old concepts of online gaming. There is no room for gamer exploitation as the GameFi model promotes fairness and transparency. There is an increasing popularity of blockchain games that are believed to advance with time. The success of the GameFi project will also lead to people showing interest in building new metaverse companies.
