The growth of the GameFi sector is due to the rise of the play-to-earn (P2E) trend, which has opened up numerous opportunities and generated a new wave of ‘unicorns’ in the space.
GameFi is a platform that offers economic incentives to players through its play-to-earn blockchain games. Players can complete tasks, fight opponents, progress through levels, and earn cryptocurrency & NFT rewards.
Blockchain games differ from traditional video games because most allow players to transfer items from the game’s virtual world. Players can trade crypto-earnings on exchanges and items on NFT marketplaces. The rise of Axie Infinity is evidence of GameFi rapidly replacing the traditional gaming industry.
GameFi combines the terms ‘game’ and ‘finance,’ creating an open economy in which players are rewarded with NFTs and tokens. All parties benefit from this, like players, investors, developers, and crypto users. It is beneficial to invest in GameFi Development to gain additional rewards. It is also important to further explore the benefits GameFi offers for blockchain game development.
The Benefits of GameFi
GameFi allows users to generate income through its game-based economic model incorporating blockchain and cryptocurrencies. This model leverages internet access, enabling users to earn money through gaming crypto tokens.
Crypto games offer tremendous investment potential, with investors taking advantage of the opportunities available. This is facilitated by the GameFi mechanism, which operates on four key pillars:
- The Influence of Blockchain
- Non-fungible tokens (NFT)
- Play-to-Earn (P2E)
- Ownership of In-game Assets
Having laid out the main benefits gamers can take advantage of in the GameFi space, we will break down each section individually, offering further details on how users can profit.
The Influence of Blockchain
The blockchain is essential to all GameFi projects, and many games are developed on smart contract-enabled networks. Ethereum is a particularly popular platform for this purpose, although Ethereum’s block space has certain limitations.
When the blockchain’s capacity for transactions is exceeded, its costs increase. In response, game developers have moved towards higher-capacity and faster protocols such as Polygon, Solana, and Polkadot to use GameFi technology.
The blockchain provides a transparent and secure transaction environment, allowing players to own the assets and not game developers—data about who owns which item is securely stored on the decentralized public blockchain. Thus, making purchases, sales, and exchanges open, fair and secure.
Non-fungible tokens (NFT)
Play-to-earn crypto games have NFTs, or non-fungible tokens, as game items, such as avatars, land, weapons, and gold. Through gameplay, players can obtain these NFTs and exchange them for cryptocurrencies. These cryptocurrencies can then be converted into fiat money.
Non-fungible tokens (NFTs) give game items or characters unique characteristics, making them impossible to duplicate or counterfeit. In this way, users can make money by monetizing their land assets, engaging in tournaments with other players, and upgrading their characters to boost income. GameFi projects, therefore, offer multiple levels of development for users.
Playing play-to-earn games allows users to trade and exchange their valuable assets. For example, Axie Infinity awards players a portion of AXS tokens when game objectives are completed.
GameFi projects are a way for users to gain rewards when they achieve game objectives, such as winning a tournament or a battle. These are distinct from play-to-win games.
Ownership of In-game Assets
GameFi gives players access to unique digital assets, represented as Non-Fungible Tokens (NFTs). This technology makes these assets impossible to counterfeit, providing users with safe ownership of their in-game items.
One can take advantage of the virtual game world by trading game plots on marketplaces. Assets can be sold or leased to other gamers to monetize the virtual land by creating virtual shops, casinos, concert venues, and more.
Several projects and games are gaining attention within the GameFi industry. These include Axie Infinity, CryptoBlades, The Sandbox, CropBytes, and PlanetIX. These have generated revenue successfully; thus, other games are beginning to employ similar models.
GameFi projects are widely adopted because they utilize DeFi elements, game tokens, and interesting themes. Moreover, the growing popularity of the metaverse has become an attractive opportunity for investors and game developers.
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