What is GameFi?

Welcome to this article that gives you a breakdown of what GameFi is and what the trend is really about.

In this article, you will learn every basic knowledge required to know to understand what GameFi really is or as i prefer to call it, decentralized gaming. This article covers a simple breakdown, so it will be easier to understand even if you are not into blockchain.

Overview

GameFi, as the name suggests consists of two parts. The gaming part and the finance part.
The gaming part is simply a traditional gaming platform where you can have a character which you can use to compete against other characters in a series of gameplay or play against automated bots where you can earn in-game currency, and you can use this currency to upgrade your character, purchase weapons, costumes and other in-game items.
The finance part is also the blockchain part since it runs on the blockchain and it represents your in-game valuables, characters and the likes, which are commonly represented as ERC-721 Tokens (NFT) while other common game properties like costumes and weapons are mostly represented as ERC-1155 Tokens (NFT).

How does it work?

To put it more simply and concisely, GameFi refers to play-to-earn games that offer economic reward to players. Typically, players can earn cryptocurrency and NFT rewards by completing tasks, battling other players, and progressing through the different game levels. Although, some games also feature characters and items that can be used, which have no impact on the gameplay and earnings.

The GameFi ecosystem uses cryptocurrencies, non-fungible tokens (NFTs), and blockchain technology to create a virtual gaming environment.

Simple Breakdown of Blockchain Token standard in GameFi

• Characters are represented as ERC-721 Tokens
• The In-game currency is an ERC-20 Token
• In-game items like costumes and weapons are represented as ERC-1155 Tokens

Onchain-to-Offchain analysis
The basic onboarding for this is that a game section will have a deposit and withdrawal gateway to enable movement of assets from onchain to offchain and vice-versa.

How to Earn?
First, as a player, you can go to the 'Exchanges' tab (might be different from game to game), buy gaming tokens and NFTs to be used in the game to upgrade characters, play the game, and try to win more tokens, which can then be exchanged for stable coins. Also, sales of game NFTs on the NFT marketplace with a much higher price can provide the player some profits.
Some games also let players generate passive income without playing the game, either through staking or by lending their gaming assets to other players.

Features of a standard GameFi project

• Play-to-earn(P2E) model:
  The Play-to-Earn gaming model is at the core of every GameFi project. Compared to traditional video games like 'Call of Duty' and 'God of War' that use a pay-to-play model that requires players to purchase licenses or recurring subscriptions, the P2E model offers players opportunities to make money and also have full control over their in-game assets.

• Asset Ownership:
  As explained above, players can monetize their in-game assets in many different ways since they have full verifiable ownership and control over them since they are minted (NFTs) on the blockchain.

• Decentralized Finance Features:
  Some GameFi projects provide DeFi services like staking, liquidity mining, and yield farming. The in-game crypto assets or NFTs help players earn rewards, unlock exclusive items, and climb to new levels. Utilizing this, a lot of interesting features can be added to the project and this can increase its user size depending on what features are available.

GameFi Projects

Below are some of the popular GameFi projects trending at the time of writing:

• Alien Worlds

Alien Worlds is an NFT Metaverse where you can play with unique digital items (NFTs). It comes with an autonomous organization, Planet DAOs, where players can participate in weekly elections for council candidates, submit proposals on how to distribute the planetary treasury or run for planetary council. Built on Binance Smart Chain and WAX Blockchain, it also has a cross-chain bridge to move TLM between BSC, WAX, and Ethereum.

• Splinterlands

Splinterlands is a collectible card game where players can win rewards from tournaments, ranked play, and quests. Built on WAX and HIVE blockchains. A HIVE cryptocurrency wallet is automatically generated for you upon registration on their website. It has cross-compatibility with other blockchains such as Ethereum, Tron, and WAX,

• Farmers World
  
  Farmers World is the first farming game to function on the NFTs platform. Pick for yourself suitable tools, exploit various resources, buy land to build enormous farms, and enjoy the fascinating experiences of a farmer working in Farmers World’s ecosystem. Built on the WAX blockchain.

• Gameta

Gemeta is a Metaverse platform built on the Solana Blockchain with over 40,000 users at the time of writing, providing a series of products designed to help web2 users immigrate to web3.

• Upland

Upland is a metaverse based on the real world that brings together the thrill of earning NFTs and digital property holding fiat value with the enjoyment of game exploration and meeting fellow players. Backed by the highly-sustainable EOS blockchain, Upland has been recognized as one of Fast Company’s Next Big Things in Tech due to the platform's community-based commerce where players and businesses define gaming, earning, and connecting. Available on iOS, Android, and browsers, Upland captures the potential of Web 3.0 technology where virtual properties based on real-world addresses and historic landmarks become gamified hubs of activity that mesh digital communities with the real world.

• Axie Infinity

Axie Infinity is a Pokemon-inspired digital pet universe where players use their cute characters called Axies in various games. The Axie Infinity Universe highlights the benefits of blockchain technology through "Free to Play to Earn" gameplay and a player-owned economy.

• BinaryX

Cyber Dragon is a Play to Earn game based on the Binance Smart Chain. This game is powered by the BinaryX team. Players can create characters, collect rare equipments and challenge dungeon. It has a dual-token economic system of BNX + Gold. BNX is Cyber Dragon's governance token. BNX token holders can participate in community governance and vote on major game decisions. Gold as a BEP-20 token, it is the main currency in the game. Gold can be used in most consumption scenarios in the game and can be obtained by mining by participating in daily work after recruiting heroes.

There are many more projects available and many more to come, and I personally am interested in the upcoming Norse-inspired GameFi project, RUNEWARS.

None of the GameFi projects mentioned is being promoted in anyway, they are simply for references.

How to play GameFi games(Getting started)

• Register for a crypto wallet (Metamask, Binance, Argent, and so on depending on the blockchain the game runs on and the user's choice).
• Connect your wallet to the game (Go to the official site of the game and authenticate your wallet to initiate the gameplay as a user).
• Check the game requirements before actually playing. This is important so that you can know the earning potential and overall risks before playing.

Some valuable contents

The word 'GameFi' came into play during the Wuzhen World Blockchain Conference held in China, mentioned in a speech delivered by the developers of blockchain game publishing firm, MixMarvel in November 8, 2019.

Following a massive boom in 2021, the GameFi space is gradually expanding, with over 1500 GameFi projects currently listed in DappRadar, available on multiple blockchains including Ethereum, BNB Smart Chain (BSC), Polygon, Harmony, Solana, and others.

In coming years, it is certain that the space will continue to increase and lots of GameFi projects will be available, especially in developing countries. The best part of this is the way GameFi combines entertainment with financial incentives, and in a way, shapes the buildup of the MetaVerse, which is a topic I will be expanding on in future articles.

Links

• Visit DappRadar and check out some of the listed GameFi-based game you can play today. Click here

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