Gaming Finance (GameFi) is currently one of the trendiest applications in the bitcoin world. The worldwide video game market is on the verge of being disrupted by blockchain gaming. With more than $1 billion in total in-game assets, Axie Infinity has aroused the curiosity of the traditional gaming business.
In its simplest terms, GameFi refers to the financialization of video games. However, GameFi is a broad phrase, and different GameFi assets may have completely different financial aspects. Some blockchain games, for example, reward players for achieving in-game objectives, while others enable revenue production from a player’s numerous assets. It is vital to remember that GameFi is not a gambling platform. In order to earn money, players in the games must use a combination of skill and strategy. Although luck plays a role in these games, it is not essential in determining who wins or qualifies for a prize.
The term GameFi was coined in November 2019 by the founders of MixMarvel, a blockchain game publishing platform. When they introduced this concept, the MixMarvel founders were speaking about how the technology that underpins cryptocurrencies may transform video game business.
However, the term was first coined by Andre Cronje, the creator of Yearn, in a September 2020 tweet. Since then, the term “GameFi” has become more commonly used to denote games that include financial components enabled by blockchain technology. Despite the fact that the phrase has only recently gained popularity, GameFi has a history that dates back almost as long as Bitcoin. Some of the initial assets in the industry that we now refer to as GameFi include early Minecraft servers with BTC integrations, the 2013 website Gambit.com, titles like Bombermine, and peer-to-peer systems that enable gamers to monetize mainstream titles with BTC. Later, ventures like Huntercoin extended blockchain technology beyond payments, allowing players to earn money by mining cryptocurrencies.
Due to the intricacy of its programming language, Ethereum’s introduction in 2015 provided new prospects for video game makers. For the first time, programs could be saved and run on-chain, allowing for the creation of applications. Among these was CryptoKitties, a blockchain game that used the newly created ERC-721 standard to represent in-game assets in the form of kitten.
Interest in NFTs has surged in recent years, and performance-optimized blockchains have been released, sparking enormous innovation in the GameFi sector. Today, we are starting to see the results of the work of these pioneers, as the blockchain gaming industry rapidly expands.
GameFi assets are now available in a variety of formats. As a result, the methods by which players can earn money from these games differ. There are, however, a few key elements worth addressing. Many of today’s most popular blockchain games employ a combination of the following characteristics to monetize the activity.
First of all, GameFi applications are built on a Play2Earn model. This model allows players to earn assets within the game. Nevertheless, unlike with a traditional game, GameFi funds can be transferred to the real world via bitcoin trading. In this way, players benefit the developers and other players by engaging in the game’s ecosystem and utilizing their native currency. The more popular these games get, the more valuable they are to trade. In the meantime, the more coins a player earns in the game, the more money they can sell them for. The value of popular GameFi tokens listed on the CoinEx exchange has surged by up to 400%, demonstrating that there is a lot to be made here.
The second common building block in GameFi is NFTs. Many GameFi games feature NFTs as characters or assets (potions, weapons, animals, houses, and so on), creating a new market for unusual NFT design and trading. These NFTs can then be sold on platforms, spawning an entirely new gaming and collector industry.
Other elements of GameFi assets include native tokens, DeFi features, and blockchain technology. Each game has its own token that is used to run the games, distribute rewards, and preserve the value of GameFi projects. Some GameFi initiatives offer passive revenues in addition to Play2Earn capabilities. Staking, yield farming, and liquidity mining are some of the DeFi services available. GameFi games were initially produced on the Bitcoin blockchain, but as the company has grown and gotten more complex, it has been necessary to migrate to blockchains that allow for the creation of dApps, such as Ethereum. The problem is that Ethereum’s costs are still high, and the platform prioritizes security and decentralization over speed, which is critical in gaming. As a result, a large number of GameFi applications may be found on speedier blockchains like Wax and Solana.
While DeFi is a feature of GameFi, GameFi cannot avoid some type of centralization due to the necessity to create and design characters, establish a narrative and rules. Moverover, someone needs to create the overall structure of the gaming universe. On the other hand, games are increasingly attempting to incorporate more participation from the players themselves. This might include voting on proposed character stories, new NFTs and rules, for example. Generally, individuals with more tokens will have greater voting power than others. While this system is not entirely democratic, it contributes to a more decentralized game experience.
Along with the gaming industry, presenting different options in a story is also quite popular in the entertainment sector. Many television series, for example, have effectively included stories with various endings into their shows; in particular, the television series Black Mirror’s special Bandersnatch has achieved notable success with this. Although GameFi gamers may not have many alternatives, in the end, active participation in deciding which story to follow is sure to attract more people to the platforms.
GameFi applications use mechanisms called decentralized autonomous groups to gain higher decentralization (DAOs). Using DAOs to decentralize GameFi is still considered a developing technique.
Digital economies have lots of potential to become viable and self-sustaining. The gaming fnance user base is growing steadily, creating more revenue. Popular NFT GameFi platform Axie Infinity became the first blockchain game to achieve $1 billion in total token sales in August 2021, with over 1 million daily users. Additionally, as gaming universes grow in size, they are starting to include real revenue-earning items. For example, players can use cryptocurrency tokens to buy land in a virtual environment and create a casino where other players can wager. GameFi applications have opened up a world of possibilities by utilizing blockchains that support dApps. Furthermore, new assets and functionality in these games have created the need to use real people as characters in the game. This may seem unusual, but when we consider how many people engage with each other more in games than in real life, it makes sense. From this perspective, it’s easy to understand the growth potential of GameFi applications with real-life aspects. To that aim, NFT game developers have begun to develop roles such as metahuman doctors, smart contract lawyers, avatar fashion designers, and gaming universe travel agents (to name a few), all of which will be played by real people. It’s also remarkable that GameFi has spawned many professions for designers (costume, the universe, and NFT design, for example), software engineers, and management, among others. This is in addition to positions within the game universe itself.
GameFi AG has developed a play-to-earn model for blockchain games, rewarding gamers in the native currency – Pika Cyrpto – as they play games. With this concept, GameFi AG has developed a platform that connects NFTs and blockchain gaming to the rest of the world. GameFi AG is a complex organization of interconnected smart contracts utilizing the latest blockchain technology. This cryptocurrency gaming platform is revolutionizing the blockchain gaming space with exciting, play-to-earn games and an exciting NFT marketplace. The team aims to provide gamers with unique NFT games and create a niche space where artists can sell their art and gaming NFTs. They have developed a groundbreaking three-tiered token system that’s absolutely unique because it allows gamers to evolve one token into another while playing. In this system, each token – Pika, Thunder and Rai – has a unique application in the games.
When we consider the addictive nature of games, it is clear that the NFT gaming space will only get bigger from here. GameFi AG provides a platform that will benefit the cryptocurrency industry while simultaneously helping gamers to have fun. The developers behind this NFT gaming platform are also in an excellent position to benefit from the growth of other assets in other fast-growing sectors, such as DeFi. NFTs, in particular, work well as visual collectibles. If a player can combine a rare NFT into a game and get publicity, profit, and kudos in the process, they will be more inclined to participate.
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