As blockchain games and NFTs become entrenched in the gaming industry, many players are asking, “What is Gamefi?”
GameFi is a collection of the words game and finance. It’s a new gameplay mode that allows players to earn cryptocurrencies while playing their favorite blockchain games. Commonly called Play To Earn or P2E in the blockchain stage, players can earn prizes in cryptocurrencies and NFT. You get rewards by playing games, completing quests and getting up.
Unlike regular computer games, it allows you to move your items and prizes in the form of NFT out of the game’s ecosystem. This gives you the option to sell your prizes on NFT systems and cryptocurrencies or simply store them in a wallet.
Token Economics runs a GameFi project.
GameFi NFT projects build a complete ecosystem with their tool. The symbol is used for all business activities within the game. In one-symbol economies, you can use your symbols as either a currency (note key) or a management symbol. You use help symbols to buy game character costumes, etc. They are also used to reward people in the gaming community.
Governance-based symbols give holders the right to vote on how the gaming economy grows. Some popular icons for tools and management include Sandbox Sand, TLM and LOA. However, unlike traditional computer games, blockchain games sometimes use the same symbol for both purposes.
How are traditional video games and GameFi different?
In standard computer games, players can use their money to buy digital assets such as weapons, clothing, etc., which help their character in the game. For the most part, these things have no value outside of the game. More often than not, players are prohibited from earning money from their digital assets or trading with them outside of the game.
The opposite is true for blockchain games. In cryptographic games, you use cryptography to buy digital objects, which are usually in the form of NFT. This gives players the option to collect a FIAT cryptocurrency award in cryptocurrency exchange. Furthermore, you can remove your NFT files in your wallet or sell them on the NFT market for profit.
Apart from pre-game rewards, many GameFi projects also include elements of distributed funding (DeFi). These include yields, mortgages and liquidity, where players generate passive income. Take a bet, for example, a player can use his symbols in the game to get prizes, access to special items and open up new game options by betting.
Adding DeFi components also changes the game’s dynamics, as players with control symbols have a say in how the game develops through DAOs, creating a more distributed game that is not run by large companies,
Ownership of digital assets
Blockchain technology is the engine behind the GameFi revolution, in games. The technology allows players to keep their parts of the game as digital assets and have full control over NFT and their gaming assets.
A player can give his avatar his pet, home, weapons and other items, just like in normal games.
One of the main ideas in games like Decentraland and The Sandbox island is to let players make money with virtual assets.
The rise of NFT
2021 was a successful year for NFTs, with sales of $ 2.5 billion in the first half and $ 17 billion in total.
Because NFTs are used in games, GameFi projects use them. All player assets in the game, such as heroes, weapons and skins, are stored in immutable symbols. Therefore, the underlying asset has limited units, NFT makes it possible to verify this security on blockchains and provides easy access to the secondary market.
Play-to-Earn (P2E) game model
Play-for-Earning, or P2E, is a new way to play games at the heart of all Gamefi projects. It’s a significant change from how most games work, since you pay to play.
Cash games require players to deposit a small amount before they can play. All items they acquire during play are the property of the gaming company. At the moment, game developers need to buy a license or renew a subscription to create video games.
Most traditional computer games do not give players any money and the company takes care of their assets.
In the P2E model, the player has full rights to the item as it is in the form of NFT. P2E games allow players full power, money and opportunities to earn.
Additional benefits of GameFi games
There are many good things related to DeFi principles such as mortgaging, liquidity mining and yield management that enhance GameFi games. Players bet on their money in the game to earn interest and other prizes that they can use to create new games or buy new items in the game. Players can secure game assets when they borrow. GameFi allows users to make their own decisions, unlike traditional games.
The future of Gamefi
If the last year and a half can be marked, the future of the GameFi looks bright. With over 1400 games recorded on Dapp Radar. The projects are spread across several blockchains, including Ethereum, Solana, Polygon, BSC chain and more.
The attraction of making money while playing your favorite video game must grow with the development and use of blockchain technology.
From the early days of Bitcoin, users have been playing browser games to create BTC. Even though BTC games still exist, the rise of Ethereum and smart deals have changed the world of blockchain gaming. Technology can now offer a much more complex and exciting experience.
It’s easy to see how GameFi attracts players by offering fun opportunities to make money. As blockchain games become more popular, more and more companies are likely to build metaverse.
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