What Makes GameFi Crypto’s New Hot Thing?

Apr 22, 2022
4 min read

Since the inception of the video game industry, developers have attempted to build worlds that are as engaging as real life. While advances in graphics, processing, and other areas have helped to decrease the gap, for the great majority of players, games still lack many of life's essential motivations, such as the chance to make a livelihood. GameFi, a new crypto-gaming category, on the other hand, has the potential to convert gaming into a full-time profession for the general population.

For some days, GameFi has been the buzz of the town. Crypto enthusiasts are willing to invest in it, and it has taken the digital world by storm. The world of digital currency keeps changing with time, and to keep up with it, investors need to have a piece of knowledge about each and every change.

So, the new change that we believe will shake the world of digital currency is GameFi. That is what this article focuses on. So let us begin and look at what it actually is.

What is GameFi?

GameFi, sometimes known as "play-to-earn," is a combination of gaming with blockchain-based financialization. Through quests, trading, and other techniques, GameFi allows players to get digital products for their in-game activities. For decades, traditional games have enabled players to amass and trade digital assets, but they risk losing their deposits if the publisher decides to stop the game or go out of business. GameFi games, on the other hand, use a distributed network to store their assets. These work independently of any particular business, significantly reducing the risk associated with digital assets.

In most cases, in-game awards are earned through fulfilling chores, fighting other players, and progressing through the various game levels. They can also trade their assets on crypto exchanges and NFT marketplaces outside of the game.

How Does GameFi Work?

The reward in GameFi can take several forms, including cryptocurrencies and in-game assets such as virtual land, avatars, weapons, and outfits. Each GameFi project will have its own game economy and model. The in-game assets are almost always NFTs that run on the blockchain and may be exchanged on NFT marketplaces. In other circumstances, however, in-game assets must be transformed into NFTs before they may be traded or sold.

In most cases, in-game assets will provide players with particular advantages, allowing them to earn additional rewards. However, some games have avatars and cosmetics that are entirely decorative and have no bearing on gameplay or earnings.

Players can earn rewards by completing activities, fighting other players, or building monetized constructions on their piece of land, depending on the game. Some games allow users to earn money without having to play the game by staking or lending their gaming assets to other players.

What Makes GameFi Different from Token Offering Video Games?

Isn't it a common question that video games don't provide tokens? Yes, they do. Virtual reality Robux may be used to buy virtual Gucci purses for avatars on Roblox, and V-Bucks can be used to buy pickaxes in Fortnite Battle Royale. The Pokemon Dollar is reward money for winning battles in Pokemon World, and it can be used to buy potions and clothing. However, such money and digital items are rarely easily — or legally — traded or converted into cash outside of games.

So GameFi allows those tokens or game money to be traded outside the game, i.e. in real life, and that's where it begins its journey to be called revolutionary.

How Big is GameFi?

In 2021, the number of GameFi projects increased dramatically, and this trend is expected to continue in the next years. DappRadar now lists over 1,400 blockchain games as of March 2022. Popular games are now available on many blockchains, including Ethereum, BNB Smart Chain (BSC), Polygon, Harmony, Solana, and others.

The GameFi growth pattern is projected to continue at a rapid pace as blockchain technology develops. GameFi is particularly appealing, especially in developing nations, because it allows you to own in-game assets and make money from them.

How to Get Started?

There are thousands of blockchain games on the market, each with its own set of rules. Scam ventures and bogus websites should be avoided at all costs. It's risky to connect your wallet or download games from strange websites. You should, ideally, construct a fresh crypto wallet just for this purpose and only utilize funds you can afford to lose. Follow these steps to get started if you're convinced the game you found is safe.

Create a Crypto Wallet

A suitable cryptocurrency wallet, such as Trust Wallet or MetaMask, is required to enter the GameFi environment. Depending on the game, you may need to utilize various wallets or connect to different blockchain networks.

You may also connect your cryptocurrency wallet to the Ethereum blockchain and play most of the Ethereum network's games. Some games, such as Axie Infinity and Gods Unchained, will still create their own wallet to save money and enhance performance.

Axie Infinity is based on Ethereum, but their team created the Ronin network as a sidechain. As a result, to interact with the Axie Infinity ecosystem, you must utilize the official Ronin Wallet.

Connecting Wallet To The Game

You'll need to connect your wallet to play a blockchain game. Make certain you're connecting to their official website rather than a spoof. Go to the game's website and seek for the option to link your cryptocurrency wallet.

Unlike traditional online games, which need you to create a username and password, most blockchain games use your crypto wallet as a gaming account, so you'll probably be required to sign a message on your wallet before you can play.

Check Requirements

To get started, most GameFi initiatives will ask you to buy their cryptocurrency token or in-game NFTs. The prerequisites differ in each game, but you should always assess the earning potential as well as the overall hazards. Make careful to calculate how long it will take to recoup your initial investment and begin profiting.

You'll need three Axies in your game wallet to play Axie Infinity. The Axie Marketplace is where you can get them. You'll need wrapped ETH (WETH) in your Ronin Wallet to buy Axies. You can buy ETH on crypto exchanges like Binance and transfer it to your Ronin Wallet using the Ronin bridge.

Conclusion

Many supporters view GameFi as a way for the little guy — the player — to break free from the grip of traditional game developers. Many gamers despise the firms that produce their games. Some people are offended by the companies' misogynistic cultures, while others are offended by the way they persuade users to pay for extra content. In their ideal state, GameFi apps are managed by their user communities, which decide on things like fees. Gamers own a portion of the work, thanks to tokens. They also own their digital avatars and other non-financial tokens (NFTs).