The gaming industry is taking advantage of Web3’s potential and combining it with money in a concept dubbed GameFi. GameFi is a cryptocurrency and non fungible tokens (NFTs) accumulation system for gamers and developers. Metaverses, or virtual worlds, are frequently used to host these kinds of games.
Gamers and developers can interact in a decentralised GameFi ecosystem. Gamers are happy to cooperate with creators in creating engaging and immersive experiences. Tokenomics is a term used to describe the distribution of value created by “in-game tokens” and NFTs to various stakeholders.
Since Axie Infinity’s meteoric rise, GameFi has been steadily eroding the traditional gaming business. Because it offers the chance to make money while having fun, it draws gamers. In what ways does GameFi differ from the conventional videogames we are used to? Let’s explore how the GameFi is going to be the gateway towards the Metaverse & Play to Earn Games.
What is GameFi?
Combining the terms “game” and “finance,” we get “GameFi.” This term refers to games on the blockchain where users can make money by participating. Blockchain, non-fungible tokens (NFTs), and cryptocurrencies are all used in the GameFi ecosystem to build a virtual gaming experience.
The most common ways to gain in-game rewards are completing tasks and battling other players. Outside the game, they can sell and buy their assets on crypto exchanges and NFT marketplaces.
As a rule, in-game assets will give players an edge, allowing them to gain greater rewards. On the other hand, avatars and aesthetics in some games are purely aesthetic and have no impact on gameplay or financial rewards.
Depending on the game, players can earn rewards by fulfilling tasks, engaging in combat with other players, or erecting commercial structures on their plot of land. By staking or renting their gaming assets to other players, some games allow users to earn money without really playing the game. Consider a few of GameFi’s most common functions.
Working of GameFi: Explained
The reward in GameFi can take on various shapes, including bitcoins or in-game items like virtual real estate, avatars, weapons, and outfits. It is expected that each GameFi project would have a unique model and game economy. Most in-game assets are NFTs that can be traded on NFT marketplaces. Therefore they may be bought and sold. To be able to buy or sell these assets, however, gamers first need to convert the in-game assets into NFTs.
In most cases, the in-game assets will provide players with advantages that allow them to earn more money. Avatars and cosmetics are common in video games, although they aren’t always functional.
Players can earn prizes in various ways, depending on the game:
- Fulfilling tasks.
- Engaging in combat with other players.
- Constructing structures that can be sold for money.
Gamers can make money without playing the game by staking or leasing their gaming assets to other gamers.
The Gateway to Metaverse Virtual Reality
Adding a metaverse notion to the GameFi concept has made it much more sophisticated.
The Sandbox game Decentraland and Upland, which invented the on-chain metaverse by offering virtual lands as NFTs, and a rising number of NFT games follow in their footsteps.
Using the Binance Smart Chain, the Big Game, a cooperative space-themed RPG, revolves around the ownership of virtual land plots, or SPACEs. Metaverse Game Development allows players to develop their time machines and access new game features while on excursions.
MMORPG Ember Sword is also working on a game in which the game world is separated into four types of land plots. These plots create refinement stations, homes, and exchanges for trading game assets. ‘ Half the net revenue earned on a property belongs to the owner.
Key Functions of GameFi
Play-to-Earn (P2E) Model
At the heart of our GameFi initiatives is the unique P2E gameplay mode. It’s a radical departure from the typical pay-to-play business of video games. Payment is required before a gamer may begin playing in a pay-to-play environment. Licenses and recurring subscriptions are often needed in video games like Call of Duty.
Gaming companies control and hold all in-game assets in most traditional video games. Thus players receive no monetary benefit from playing them. While P2P games allow players to keep more of their in-game assets, they can also provide them with ways to earn money.
Remember, however, that everything hinges on the model and game design chosen by the GameFi initiatives. Even though blockchain technology has the potential to give players complete ownership over their in-game assets, this isn’t always the reality. Check out the game mechanics and who is behind it before getting involved in a P2E game.
P2E Game Development allows users to play games for free and still make revenue for their users, certain GameFi initiatives require that you first purchase NFTs or cryptoassets to participate. There are always hazards involved, so it’s crucial to do your research and consider the consequences. P2E games that require a significant initial commitment but offer tiny rewards are more likely to make you lose your money.
Ownership of Digital Assets
Due to the fact that blockchain technology allows for the ownership of digital assets, gamers can make a lot of money off their in-game assets.
Player characters can possess avatars as well as pets and houses as well as a variety of weapons and other equipment. While this is not possible in the traditional financial system, it is possible in the GameFi blockchain. Authenticity and provable ownership of assets are guaranteed by this method.
DeFi Applications
It’s possible to use some GameFi projects to mine DeFi products and services such as staking and yield farming. Players typically stake in-game tokens to receive awards, unlock unique items, or gain access to additional levels of gameplay.
Adding DeFi components to crypto games can also help to decentralise it. In contrast to typical game studios, certain GameFi projects let the community be involved in the decision-making process for their updates. Decentralized autonomous organisations allow them to propose and vote on new features (DAOs).
NFT Renting Platform
Scholars can rent out NFTs from guilds. There are ways to automate the renting process for games, which can then offer it as a SaaS to their NFT holders as a rental option for their games. Some companies are developing this SaaS functionality.
In addition to the passive money generated, NFT owners of GameFi platforms can gain by providing a renting feature. However, the NFT owner runs the danger of not being able to rent out their NFT. It’s a business opportunity to take on this demand risk. Platforms now provide NFT owners with a fixed return and take on the risk of renting it out (or not).
But the NFT owner will get less money from the platform than if they were to rent it out directly in this manner. A set return, however, reduces the chance of being without rental revenue for a while. DeFi value propositions for NFT holders are also evolving from these models.
Gaming Marketplace
Since a slew of new GameFi platforms has shown up in the last year, players have needed a way to go through them all to find the best ones. The finest games are selected by gaming marketplaces that scan the landscape and assess them before making them available on their platform.
Web2 and Web3 gamers can rely on them to help each other out. As a result of this, some of them are positioning themselves as not only a gaming storefront but also an NFT marketplace. A GameFi marketplace like Rainmaker Games is an excellent illustration of this.
Gaming Guilds
For the most part, consumer-oriented businesses necessitate some form of the distribution system. GameFi platforms can be distributed through gaming guilds, which operate as a distribution network. What is their role in P2E, and why is it necessary?
The GameFi platforms sell NFTs to guilds, who rent them out to players (scholars). Scholars participate in P2E games and split the rewards with the guilds. Renting the NFTs they purchased gives guilds a long-term return on their investment (ROI).
The Future of GameFi
New models and variants of present models will inevitably arise in the near future due to the rapidity with which this market evolves. Stakeholders in GameFi are already looking into a few further applications.
Some platforms, for example, allow users to determine the best price for an NFT mint. Others began as guilds but have now adapted or shifted their business model to include a marketplace for video games.
This area is undergoing rapid transformation, and large-scale experiments are being conducted. The GameFi ecosystem has been detailed in detail in this article. This is not everything that is involved in the cryptocurrency market. These stakeholders have a positive impact on the entire Web3 ecosystem.
Conclusion
Since Bitcoin’s conception, people have been attempting to make BTC earnings by playing simple web games. The development of Ethereum and smart contracts has altered the blockchain gaming landscape, enabling far more intricate and engaging experiences. Bitcoin games are still available.
Gamers are enticed by the combination of fun and money in GameFi. As blockchain gaming becomes increasingly popular, we should expect more huge firms to put money into the metaverse.
