If you came across the terms 'GameFi' or Play-to-Earn (P2E) for the first time, you would probably think to yourself, "It's just a game/a game bot," or wonder what all the commotion is about.' The GameFi and Play-to-Earn concepts, on the other hand, aren't just for games. The reality is, there's more to them than their collocative implications, and these game-changing developments can be traced to the infancy of cryptocurrency, the advent of Bitcoin.
Some years ago, intending to incorporate Bitcoin into the Minecraft server, gaming applications like Bitquest integrated Bitcoin as a currency in their virtual gaming world. Such efforts to homogenize gaming and crypto the way Bitquest attempted were the first steps close to the GameFi concept.
This blog will aptly answer the much-anticipated question about GameFi and its functionalities.
WHAT IS GAMEFI?
GameFi is simply a hybrid amalgam of the words "Game" and "Finance - Decentralized Finance."
Through the convergence of Blockchain technology and other unique Blockchain applications like Non-Fungible Tokens (NFTs), DeFi, and Algorithmic stablecoins, GameFi's Decentralized Application (DApps) gives gamers the option to be the exclusive and verifiable owners of their games' virtual elements.
Unlike the Pay-to-Win approach in the conventional game industry, where gamers purchase in-game assets they don't entirely control and don't possess any significant value in the real world, GameFi revolutionizes the gaming experience by integrating the Play-to-Earn approach.
Play-to-Earn, synonymous with GameFi, empowers players to incentivize their skills and strategies instead of paying to acquire virtual assets. For instance, GameFi apps like Alien Worlds - an NFT metaverse - support NFTs in their virtual space. This way, players who verifiably own any in-game asset still possess those assets even when the game server is turned off.
The concept of GameFi is ushering the world to a new futuristic application of cryptocurrencies by building an economic model for making money(tokens) while playing your favorite games. Unlike traditional games, no centralized authority or 'developer' regulates this ecosystem - primary reasons for GameFi's looming success.
HOW DOES GAMEFI WORK?
Most GameFi campaigns, though presently diversifying to other base layers (Polygon, Polkadot, Solana, Wax, and BSC), operate on the smart contract enabled blockchain network Ethereum. These digital tokens subsequently serve as rewards for players' feats.
These games have a few commonalities. The player can purchase items like coins, lands, weapons, extra lives, custom characters, outfits, accessories, and avatars 'directly' from the game's blockchain network's ledger and not from the game's developers, thereby espousing decentralization.
These acquirable assets are mostly represented as NFTs, which corroborates the sense of authenticity and ownership of these digital items.
How to Earn GameFi Rewards…
Players can stake their in-game assets to earn active or passive rewards through blending decentralized Finance (DeFi), NFTs, and other Blockchain features.
Unlike the orthodox gaming experience, GameFi's DAO feature would empower players to make decisions about the game's dynamics and earn benefits as stakeholders. These decisions can determine future game updates, game rewards, and trajectory.
With GameFi, a whole multiverse of possibilities has been flung open! This immersive gaming mechanic has out of nowhere initiated a new revenue system that rewards players for the time and resources spent in playing games. Users can now increase their earning potential by leveling up and upgrading their game characters, with all their information saved on the Blockchain.
In essence, players can benefit from this token economy because they, not the gaming operator, own all assets, thereby adding real-world value to their in-game purchases. At this point, GameFi and the NFTs are gravitating towards becoming a rallying point for DeFi.
What are your thoughts? Do you think GameFi can be the ultimate passport to broader crypto adoption?