Résumé
GameFi refers to play-to-earn blockchain games offering economic incentives to players. Typically, players can earn cryptocurrencies and NFT rewards by completing tasks, battling other players, and progressing through the game's different levels.
Unlike traditional video games, most blockchain games allow players to transfer game items outside of the game's virtual world. Players can thus trade their items on NFT marketplaces and their income in cryptocurrencies on crypto exchanges.
Introduction
Since the rise of Axie Infinity, GameFi has quickly taken over the traditional gaming sector. This attracts players by offering them the opportunity to earn money while having fun. What is GameFi and how is it different from the video games we know?
What is GameFi?
GameFi is the fusion of the words Game and Finance. These are blockchain games offering economic incentives to players. The GameFi ecosystem uses cryptocurrencies, non-fungible tokens (NFTs), and blockchain technology to create a virtual gaming environment.
In general, players can obtain in-game rewards by completing tasks, competing against other players, and progressing through the game's various levels. They can also transfer their assets outside of the game to trade them on cryptocurrency exchanges and NFT marketplaces.
How does GameFi work?
In GameFi, the reward can come in different forms, such as cryptocurrencies or in-game resources like virtual lands, avatars, weapons and costumes. Each GameFi project will adopt a different model and economics. In most cases, in-game assets are NFTs running on the blockchain, meaning they can be traded on NFT marketplaces. However, in other cases, in-game assets must be converted to NFTs before players can trade or sell them.
Generally, in-game assets provide certain benefits to players, allowing them to get more rewards. But, some games also offer avatars and cosmetics that are purely visual and have no impact on gameplay and winnings.
Depending on the game, players can earn rewards by completing tasks, competing against other players, or building monetized structures on their plot. Some games also allow players to generate passive income without having to play the game, either through staking or granting their game resources to other players. Let's take a look at some of the common GameFi features.
Play-to-earn (P2E) model
The basis of GameFi projects is the Play to Earn model, a model that is revolutionizing the gaming world. It is a very different model from the Pay to Play model adopted by traditional video games. The Pay to Play model requires players to invest before they can start playing the game. For example, video games like Call of Duty need players to purchase licenses or recurring subscriptions.
In most cases, traditional video games generate no financial gain from players, and their in-game resources are controlled and owned by the company that developed the game. Conversely, play-to-earn games can give players complete control over their in-game resources while providing them with the opportunity to earn money.
However, keep in mind that it all depends on the game model and design adopted by GameFi projects. Blockchain allows (and should) give players complete control over their in-game resources, but this is not always the case. Make sure you understand how the game works and who is behind the project before jumping into a Play to Win game.
It's also worth noting that Play to Earn games may be free to play and generate financial rewards for players, but some GameFi projects require the purchase of NFTs or cryptoassets before you can play. It is therefore very important to FVPR to assess risks. If a P2E game requires a large investment to start and the rewards are low, you are more likely to lose your initial investment.
One of the most popular games is Axie Infinity. This is an NFT Ethereum game that has been growing in popularity since 2018. Players can use their NFT pets (Axies) to earn SLP tokens by completing daily tasks and competing against other players.
They can also get rewards in AXS if they manage to reach a certain rank in PvP. Additionally, AXS and SLP can be used to breed new Axies, which can be used in-game or traded on their official NFT marketplace.
Besides buying and selling Axies, players can lend their Axies to other players, giving owners the opportunity to earn money without playing the game. This lending system is known as scholarship. It allows students to borrow Axies to play and get rewards.
In other words, Axie owners can generate passive income, while researchers can play the game without investing. The rewards earned are then distributed among students and Axies owners.
Ownership of digital assets
As we have seen, blockchain technology enables ownership of digital assets, meaning players can monetize their in-game assets in different ways.
Similar to video games, players can own avatars, pets, houses, weapons, tools and more. However with GameFi, these assets can be minted or minted as NFTs on the blockchain (also known as “NFT mining”). This allows players to have full control over their assets, with verifiable authenticity and ownership.
Some of the popular metaverse games, such as Decentraland and The Sandbox, focus on the concept of land ownership. They allow players to monetize their virtual land. In The Sandbox, players can purchase digital real estate and develop it to generate income. For example, they can charge other players who visit their land, earn token rewards for hosting content and events, or rent their custom land to other players.
Applications DeFi
Some GameFi projects also offer DeFi products and features, such as staking, liquidity mining, and yield farming. Typically, players can stake their in-game tokens to earn rewards, unlock exclusive items, or access new game levels.
Introducing DeFi elements can also make cryptocurrency gaming more decentralized. Unlike traditional game studios that centralize control of their game updates, some GameFi projects allow the community to participate in their decision-making process. They can propose and vote on future updates through decentralized autonomous organizations (DAOs).
For example, Decentraland players can vote on game and organizational policies by locking their governance tokens (MANA) in the DAO. The more tokens they lock, the higher their voting power. This allows players to communicate directly with game developers and influence game development.
Are video games considered GameFi?
Traditional video game players can also earn in-game money and collect digital assets to upgrade their characters. Yet these tokens and items cannot (or are not supposed to) be traded outside of the game. In most cases, they don't even have value beyond just the game. achieve this, players are often prohibited from monetizing or trading their assets in the real world.
In blockchain games, the tokens and in-game assets are typically cryptocurrencies and NFTs. Some blockchain games use virtual tokens, instead of cryptocurrencies or NFTs, but players are still able to convert their assets to NFTs if they wish. This means that players can transfer their winnings to cryptocurrency wallets and trade their assets on cryptocurrency exchanges or NFT marketplaces. They can then convert their winnings into fiat funds.
How to get started with GameFi games?
There are thousands of blockchain games on the market and each works differently. Be careful with scam projects and fake websites. Connecting your wallet or downloading games from random websites can be dangerous. Ideally, you should create a new cryptocurrency wallet specifically for this purpose and only use funds that you can afford to lose. If you're sure the game you found is safe, follow these steps to get started.
1. Create a crypto wallet
To access the world of GameFi, you need a compatible cryptocurrency wallet, such as Trust Wallet or MetaMask. Depending on the game you are playing, you may need to use different wallets or connect to different blockchain networks.
For example, if you want to play blockchain games on the BNB Smart Chain (formerly Binance Smart Chain), you will first need to connect your MetaMask to the BSC network. You can also use Trust Wallet or any other supported cryptocurrency wallet. Check the game's official website to see which ones it supports.
You can also connect your cryptocurrency wallet to the Ethereum blockchain and access most games on the Ethereum network. However, some games like Axie Infinity and Gods Unchained will build their own portfolio to reduce costs and improve performance.
Axie Infinity is built on Ethereum, but its team developed the Ronin network as a sidechain. With this structure, you must use the official Ronin wallet to interact with the Axie Infinity ecosystem. As a sidechain, the Ronin network makes trading and farming Axies much cheaper, reducing in-game costs.
2. Connect your wallet to the game
To play a blockchain game, you need to connect your wallet to it. Make sure you are logged in to the official website and not to a copy of it. Go to the game's website and look for the option to connect your wallet.
Unlike traditional online games that require you to set up a username and password, most blockchain games use your crypto wallet as a game account, so you will likely be asked to sign a message on your wallet before you can log into the game.
3. Check the conditions to be able to play
Most GameFi projects will require you to purchase their cryptocurrency token or NFTs to start playing. Requirements vary from game to game, but you should always consider winning potential and overall risks. Be sure to estimate how long it will take to recoup your initial investment and start making a profit.
If you want to play Axie Infinity, you will need to have 3 Axies in your wallet. You can purchase them from the Axie Marketplace. To purchase Axies, you must first add Wrapped ETH (WETH) to your Ronin wallet. You can buy ETH on cryptocurrency exchanges like Binance and use the Ronin gateway to transfer them to your Ronin wallet. For more information, see the article How to use the Ronin wallet?.
If you don't have funds or don't want to take risks, consider looking for a scholarship program. They allow you to borrow NFTs to play, but you will have to share your earnings with the NFT owners.
The future of GameFi
The number of GameFi projects exploded in 2021 and will likely continue to grow in the years to come. As of March 2022, there are over 1,400 blockchain games listed on DappRadar. We now have popular games on multiple blockchains like Ethereum, BNB Smart Chain (BSC), Polygon, Harmony, Solana, and many more.
As blockchain technology continues to develop, the growing GameFi trend is expected to continue at a rapid pace. The ability to own in-game assets and earn money from games makes GameFi very attractive, especially in developing countries.
To conclude
Since the beginning of Bitcoin, we have had people trying their luck with simple browser games, hoping to generate BTC profits. While BTC games still exist, the rise of Ethereum and smart contracts has certainly changed the world of blockchain games, which is now able to offer much more elaborate and interesting experiences.
It's easy to see how GameFi attracts gamers by combining entertainment and financial incentives. With the growing popularity of blockchain gaming, we will most likely see an increasing number of large companies building in the metaverses.