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GameFi: The Newest Crypto Playground 

gamefi

In Gamefi, the tokens are intended to function as full-fledged cryptocurrencies.

Developers have always strived to create video game worlds as compelling as real life. Technological advances in graphics, computation, and other areas have certainly helped bridge the gap. However, the vast majority of players still lack many of life’s fundamental incentives, such as the ability to earn a living. GameFi, a new crypto-gaming category, has the potential to make gaming a full-time job. 

But what exactly is GameFi? This article will answer that question, as well as many others and provide a clear picture of the innovative trend that may be the future of gaming.

What is Gamefi and how does it work?

GameFi, a combination of the words “game “ and ”finance “. It refers to blockchain games that provide economic incentives to players who play them. They are also known as play-to-earn games. 

In-game rewards are typically earned by completing tasks, battling other players, or progressing through various game levels. Many of the current play-to-earn games rely heavily on what game designers refer to as a grinding machine Herein, players must spend a significant amount of time performing repetitive tasks within a game in order to advance or unlock prizes — or, in the case of gamefi, crypto tokens.

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In-game assets such as virtual land, avatars, weapons, and costumes are also available as rewards. Most of these assets are NFTs, which act as a “virtual deed” signifying ownership of a piece of digital art or media file. NFTs, like cryptocurrency, operate on the blockchain. This means that they can be extracted from a game and traded or sold on a gamefi marketplace.

Each game possesses its own game economy and model. For the most part, these digital assets provide some sort of monetary benefit to their players, whether it is because they won a fight and earned crypto, sold an NFT they purchased in-game or charged other players rent for staying on their virtual land. Popular games like Decentraland and The Sandbox, for example, focus on virtual land ownership. Players are allowed to buy digital pieces of real estate, develop them, and then charge rent from other players.

Some of these games even allow players to generate passive income without actually playing the game by mining liquidity or lending their in-game assets to other players. Adding abilities like these not only decentralizes the game even further but also allows players to influence the game’s development.

Tokenomics i.e. the supply and demand for a specific cryptocurrency differ depending on the game. However, the majority of these studios raise funds through token sales. The way these tokens are distributed, unlocked, and whether they are finite or not varies. Many of these games are built on Ethereum, Solana, and Polygon. 

As cryptocurrency remains a global phenomenon, industries worldwide are looking for new ways to incorporate this truly revolutionary technology into their core products and services. Online gaming, in particular, has become a hotbed of exciting innovation in this field. Developers are inventing new ways to use cryptocurrency to buy and sell in-game items, cosmetics, unlock characters, and much more. The virtual and real worlds – our metaverse – have never looked better

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With advancements in PC and mobile gaming, the gaming industry’s interest in web3 has increased noticeably. Crypto games are now disrupting the traditional games market by allowing players to earn while playing, thereby rewarding their time and effort. Traditional online gaming monetization methods include affiliate marketing, in-app purchases, and in-app advertising. However, gamefi is changing this. These are video games that run on a cryptocurrency network and include a completely or partially distributed ledger architecture. This gives players verifiable ownership over the virtual products contained in the games. As a result, players can exchange virtual goods for cryptocurrency, which can then be exchanged for cash.

The status quo is changing as a result of the emergence of gamefi. While traditional games have primarily been about entertainment, crypto games provide entertainment with the added benefit of earning real money while playing. When a player purchases an asset, they indirectly raise the value of the game economy. Axie Infinity, CropBytes, and Gods Unchained are a few of the most popular games that allow players to earn money by completing in-game objectives with virtual products. In the near future, we should see a slew of supporting products centered on GameFi, which will give crypto games new dimensions.

How to get started with Gamefi?

There are a variety of blockchain games on the market, each with its own set of rules. Be wary of bogus projects and websites. Connecting your wallet or downloading games from untrustworthy websites can be risky. Instead, you can create a new cryptocurrency wallet solely for gamefi and only use funds that you can afford to lose. If you are confident that the game you discovered is safe, here is what you should do next-

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1. Create a crypto wallet

To enter the GameFi world, you’ll need a cryptocurrency wallet that supports GameFi, like Trust Wallet or MetaMask. You may need to use different wallets or connect to different blockchain networks depending on the game you’re playing. You can also connect your cryptocurrency wallet to the Ethereum blockchain and gain access to the majority of the Ethereum network’s games. Nonetheless, some games, such as Axie Infinity and Gods Unchained, will create their own wallet in order to help reduce costs and improve performance.

2. Connect the wallet to the game

To participate in a blockchain game, you must first connect your wallet. Check that you are connecting to their official website and not a spoof. Navigate to the game’s website and look for the option to link your cryptocurrency wallet. Unlike traditional online games, which require you to create a username and password, most blockchain games use your crypto wallet as a gaming account. You will likely be asked to sign a message on your wallet before you can connect to the game.

3. Check the pre-requisites 

To get started, most GameFi projects will require you to purchase their gamefi token or in-game NFTs. The requirements vary according to the game. Before beginning, make an estimate of how long it will take to recoup your initial investment and begin profiting. If you don’t have any money or don’t want to take any risks, look into scholarship programmes. You can borrow NFTs to play, but you must share your earnings with the NFT owners.

Blockchain Games 

A blockchain is a collection of data blocks that are managed by a global network of computers. Since these blocks are immutable, no one can edit them. These blocks are protected by a cryptographic component and cannot be hacked as a result of improved security. Blockchain games are placed on the blockchain in such a way that the entire cluster of systems playing the game owns a copy of it.

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The use of cryptocurrencies for in-platform payments, as well as the use of NFTs, are two elements that distinguish blockchain games. NFTs are a significant advancement because they enable users to have unique attributes that can be exchanged with other players in the same game or moved between platforms. Exchanges in blockchain games can generate money, just like they do in real economies.

Public blockchains are highly unstructured and accessible to all. Do you have a cell phone and internet access? You are welcome to participate. It’s as easy as that. 

Gamefi Token

GameFi is most commonly used to refer to decentralized applications with monetary incentives. These are typically tokens awarded as rewards for completing game-related tasks such as winning battles, mining valuable resources, or growing digital crops. It’s a strategy known as “play-to-earn.” Many GameFi apps, including Alien Worlds, allow users to earn money passively by allowing others to mine their virtual lands. They can also earn interest by using DeFi platform-developed techniques to lend assets such as digital characters or deposit them in what is known as staking.

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But, haven’t tokens always been a part of video games?

Kind of. Roblox, Fortnite and Pokemon Go have all had some sort of prize currencies. However, those rewards are not always easily – or legally – sold or converted into cash outside of games.

In Gamefi, the tokens are intended to function as full-fledged cryptocurrencies. This means that in-game winnings can theoretically be converted into cash on a variety of decentralized exchanges. GameFi tokens are subject to the same volatility as other cryptocurrencies that are not tied to a traditional currency. Of course, holding volatile assets can result in steep losses as well as gains, and players may have difficulty cashing out during a major slump. Some tokens can also be used in a variety of DeFi dapps, earning interest by being used as collateral for loans, for example.

Gamefi Crypto 

The success of GameFi has been a huge push for crypto and blockchain acceptance and legitimacy. As the name implies, GameFi combines gaming and finance. It refers to the financialization of video games through the use of blockchain-based methods. It allows users to monetize their gaming experiences. This model’s primary feature is play-to-earn (P2E).

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P2E games follow the decentralization principle, allowing players to receive crypto-based rewards for completing in-game objectives. Gamers also keep non-fungible tokens of their in-game items, such as avatars, modifications, weapons, pets, and land (NFTs). As a result, GameFi ensures genuine ownership of in-game assets while also making them interoperable and tradable in secondary markets.

GameFi crypto creates an environment in which gamers can earn cryptocurrency while playing. This gives gamers an incentive and educates them on the benefits of using cryptocurrencies. Gaming is made more enjoyable. Players no longer have to wait for long periods for their payments.

Though blockchain games are still in their infancy, they are poised to compete with traditional pay-to-play and free-to-play games while disrupting the gaming industry. The economic incentives they provide will accelerate the adoption of cryptocurrencies, blockchain, and digital assets.

Gamefi and NFT 

GameFi allows gamers to participate in the monetization of games by simply playing them. This is a significant departure from traditional gaming, in which only the publishers profit. P2E (play to earn) is the term used to describe this earning concept. Gamers can now receive tokens or NFTs for completing certain in-game tasks. These rewards can be exchanged for other cryptocurrencies, fiat money, or used to purchase other game concepts, depending on the payment flow.

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In traditional gaming, players received only entertainment value while developers and publishers profited. However, with the current implementation of cryptocurrencies and NFTs in the gaming sphere, both players and developers can earn money. This will change the entire gaming system and cause a shift in ownership.

In GameFi projects, the majority of in-game assets, and sometimes the entire ecosystem, are maintained by players rather than developers, in contrast to the majority of traditional games in which players only consume. As the metaverse evolves in the near future, this is bound to become a common practice.

NFTs are assets or characters that can be traded or recycled for more valuable NFTs. The primary function of NFTs in GameFi is to provide a means of earning for players. NFT in-game trading volume reached an all-time high in 2021, assisting investments raised with blockchain gaming domains to exceed a billion dollars. Projects such as MetaCity, a metaverse gaming platform similar to Minecraft, enable users to buy and sell NFT plots and develop businesses. A cross-game feature allows players to exchange gaming items between games. NFTs obtained through these platforms can be sold and traded between games.

Best Gamefi Examples in 2022 

Here are some of the best gamefi games you can play this year- 

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1.Decentraland

This virtual world became available to the public in February 2020. Since then, users have created a variety of interactive experiences on their LAND parcels, such as interactive games, sprawling 3D scenes, and a variety of other interactive experiences. MANA and LAND are the two tokens used by Decentraland.

2. The Sandbox

The Sandbox, launched in 2011, is a blockchain-based virtual world that allows users to create, build, buy, and sell digital assets in the form of a game. The Sandbox creates a decentralized platform for a thriving gaming community by combining the powers of decentralized autonomous organizations (DAO) and non-fungible tokens (NFTs). SAND is the Sandbox’s utility token.

3. Axie Infinity 

Axie Infinity comes next on the list. It is a trading and battling game based on blockchain technology. Axie Infinity allows players to collect, breed, raise, battle, and trade Axies, which are token-based creatures. There are over 500 different body parts available for these Axies, including aquatic, beast, bird, bug, plant, and reptile parts. Axie Infinity Shards (AXS) are the Axie Universe’s ERC-20 governance token.

4. Enjin Coin

Enjin is not a particular GameFi application, but rather a solution for the entire ecosystem. This GameFi project seeks to address some of the issues confronting the video gaming industry. Enjin is a GameFi project that tokenizes in-game assets and infuses them with the ENJ token. Following the injection of ENJ, the items are automatically converted into an Ethereum-based token standard. This allows creators to issue both fungible and NFT tokens through a single smart contract.

5. Gala

Gala Games wants to change the gaming industry by giving players control over their games. This company identifies with a “fun first” goal and designs games with simple mechanics. You don’t even need blockchain knowledge to participate. It also maintains constant contact with its user community, which is actively involved in game development. Gala Games uses GALA – its own utility token – in addition to purchasing NFTs for specific games.

Gamefi Marketplace

Because of the proliferation of GameFi platforms in the last year, gamers have required aggregation and curation services to select the best gaming experiences. Gaming marketplaces scan the landscape, test the best games, and feature them on their platform.

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Their role is to bridge the gap between Web2 and Web3 gamers by offering assistance. Some have taken a more comprehensive approach, offering to be an NFT marketplace as well as a game marketplace and curation engine. Rainmaker Games is a good gamefi marketplace if you’re looking for one.

How is Gamefi different from standard games?

The GameFi concept gradually became the largest outlet in the cryptocurrency industry in the second half of 2021. GameFi brings together three major markets: decentralized finance (DeFi), non-fungible tokens, and blockchain-based games. Blockchain is primarily used to address issues of lack of transparency. Based on this technology, GameFi accomplishes the same goal of resolving major issues in the traditional gaming industry.

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This new GameFi is very different from the traditional gaming economy. The first difference is that in this new concept, players are more engaged and have the ability to optimize or modify the game. Second, there is no centralized control over chain games. These games are not under the company’s control. The company cannot influence the game’s future development. Everything revolves around the users themselves.

Play–to-earn Games

Play-to-earn games are online games that allow players to earn real-world rewards by completing tasks, competing against other players, and progressing through various game levels. These rewards take the form of in-game assets such as crypto tokens, virtual land, skins, weapons, and other NFTs. Due to the decentralized nature of these games, players can buy, transfer, and sell these in-game assets for real money outside of the game’s virtual world. The play-to-earn business model is based on blockchain technology. Simply put, players can participate in a game and potentially earn crypto.

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Players in play-to-earn games can obtain valuable in-game assets. This can range from skins and cards to a specific type of cryptocurrency. The more players who participate, the more assets they can collect and the more valuable they become.

These assets are only valuable within the game in question in traditional games. They do, however, have real-world value in play-to-earn games. Players can transfer these assets to the real world at any time and sell them for cryptocurrency or real money on their own terms. In-game assets are distributed among players in P2E games.

Players generate value for other players as well as the developer by participating in the in-game economy. Developers must consider more than just profits when creating a play-to-earn economy. Players and developers are treated like business partners in this game. Play-to-earn games have resulted in a significant psychological shift. Not only in how game developers create games, but also in how players perceive them. The bottom line is that players are beginning to recognise their worth. They will no longer accept one-way communication and greedy economies. Players want a bigger role in games. They want to own the assets they’ve worked hard to acquire. 

Is Gamefi a good investment?

The division of ownership and utility of gaming assets creates massive investment opportunities for GameFi, making game finance larger than DeFi. The sector is young but thriving, which excites investors. GameFi’s financial components include on-chain leasing solutions, fractionalization, staking, dedicated marketplaces for game NFTs, layer 2 solutions for blockchain games, and others. This concept is the next big thing, right alongside socialfi and social audio rooms, like Clubhouse. The GameFi sector investment thesis is that it makes sense to invest in anything that makes playing blockchain games more enjoyable, capital-efficient, and trustless.

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In the current GameFi tide, there are some significant platform investment opportunities. GameFi is bringing cryptocurrency to the masses. Many people will have earned their first cryptocurrency by playing blockchain games. This means that the potential market size is orders of magnitude greater than it was in the previous round. This time, it’s about non-crypto natives with low entry barriers.

There is one more aspect to the GameFi investment opportunity. Many of the early adopters of play-to-earn opportunities are gamers from developing countries whose regular incomes have been severely impacted by the effects of two years of lockdowns. GameFi and play-to-earn are viewed as ways to earn money in the virtual world while avoiding the problems that plague the real world. More value is created as the ecosystems grow and more people participate. It is a virtuous circle with the potential to alleviate poverty.

Future of Gamefi

The number of GameFi projects increased dramatically in 2021 and is expected to rise further in the coming years. DappRadar currently lists over 1,400 blockchain games as of March 2022. Popular games are now available on multiple blockchains, including Ethereum, BNB Smart Chain, Polygon, and Harmony.

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The growing trend is expected to continue at a rapid pace as blockchain technology advances. GameFi’s ability to own in-game assets and earn money from games makes it very appealing, particularly in developing countries.

It’s easy to see how GameFi attracts players by combining entertainment and monetary incentives. With the growing popularity of blockchain games, we can expect an increasing number of large corporations to contribute to the development of the metaverse.

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