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In addition to being employed within different industries, blockchain technology is also being applied in the gaming market, challenging the traditional gaming industry.
Who doesn’t like to earn while playing? The term “GameFi” has become widely used to describe video games that use blockchain-based decentralized financial components. GameFi = “game” + “finance,”. It refers to the gamification of financial systems which is the trendiest buzzword in the crypto-verse. This works to generate profit via play-to-earn cryptocurrency games.
You should know how it all started. Walt Disney earlier said Just remember it all started with a mouse, with that tone Gamefi would say It all started with Minecraft. Early Minecraft servers with Bitcoin integration were the first examples of the GameFi idea. Gambit.com, online games like Bombermine, and peer-to-peer services are all ways for gamers to make money online.
You’re in luck, we’ve got the scoop on how GameFi works.
There are a few attributes that are unique to all GameFi projects. They are none other than NFTs — non-fungible digital tokens and DeFi- Decentralised finances.
1. Non-Fungible Tokens (NFTs):
Blockchain technology is used to produce NFTs. It is a digital asset. NFTs, unlike fungible tokens, are one-of-a-kind, indivisible, and have a holder.
Users can own avatars, animals, houses, tools, and other items represented in NFT, just as they do in traditional games. These commodities are gained through gaming. This can be sold on NFT markets for profit or exchanged for cryptocurrencies, which could even ultimately be transitioned to fiat money.
2. The Decentralized Finance (DeFi):
DeFi is an experimental type of financing that relies on smart contracts on the blockchain rather than central financial intermediaries like banks.
Gambling, for example, is permitted in some GameFi projects. Players can therefore earn interest by blocking some of their tokens.
Wondering what makes a game decentralized? Here is the answer. Except in a few circumstances, traditional games are completely centralized. The studio is responsible for the game’s design, production, and distribution, as well as its updates.
In most GameFi initiatives, the goal is to include the players themselves in the decision-making process.
A participant must first have the “governance token” in order to join a DAO — Decentralized Autonomous Organization. The player’s power is determined by the number of tokens he or she owns.
A shift from traditional play to win games to play to earn games. Traditional video gamers may also earn digital cash and gather digital assets to enhance their characters and participate in other in-game activities. These coins and assets, on the other hand, have no value outside of the game and cannot be exchanged on decentralized exchanges or NFT markets. Because players are unable to trade or monetize their assets in real life, these assets are not monetarily beneficial to them.
The assets and tokens that players gain in GameFi are almost always cryptocurrencies or NFTs. Despite the fact that certain blockchain games employ virtual tokens rather than cryptos or NFTs, players will be able to convert their in-game assets to NFTs if necessary. GameFi allows gamers to transfer their winnings to cryptocurrency wallets, which can then be traded on NFT marketplaces or crypto exchanges and converted to fiat money.
GameFi is subjected to wider adoption in recent times. Existing crypto fans were mostly drawn to the DeFi movement. Meanwhile, GameFi has the potential to propel widespread adoption within the industry. The service is already being used by thousands of people. Many of them will make their first cryptocurrency buy on such platforms.
According to a recent DappRadar analysis, blockchain gaming activity increased by 2,000 % in FY 2022 of this year. When compared to the same period last year, it accounts for 52 % of all blockchain activity.
When we step back and consider the world beyond North America and Europe, GameFi’s disruptive potential becomes even more apparent. The gamified experience is offering people the option to own and build their first financial asset of any type in less developed nations, where millions remain unbanked.
The massive popularity of GameFi in Southeast Asian nations like the Philippines is altering the reputation of video gamers from time-wasting layabouts to hardworking young business people who can support their families via their online adventures. We are still in the early stages of the GameFi tale because of this potential.
Let’s have a look at some of the popular GameFi platforms:
1. Axie Infinity
Axie Infinity is an NFT-based online video game developed by Sky Mavis in Vietnam, which employs the Ethereum-based currencies AXS and SLP.
This game allows users to acquire, reproduce, battle, and trade axolotl-based characters known as “Axies,” who are synthesized as NFT.
2. The Sandbox
It is a virtual Metaverse game. Players may create, own, and commercialize virtual worlds on this gaming platform. SAND, The Sandbox’s native token, is utilized across the Sandbox ecosystem as the foundation for all interactions and transactions.
Decentraland is a user-controlled virtual realm. In the virtual earth, every piece of land and every element is an NFT which is a virtual plot of land on the platform. The MANA cryptocurrency, which is based on the Ethereum blockchain, can be used to buy NFTs.
If you can see the future of GameFi Games, Although GameFi can be traced back to the early days of cryptocurrency creation, it is just now beginning to acquire public acceptance. The huge popularity of Axie Infinity is an often-cited example of the rise of this fascinating new trend. In the mid of 2021, the popular
GameFi project became the first to reach $1 billion in token sales initially, with over hundreds of millions of daily active gamers.
New GameFi initiatives are drawing a large fan following as well as institutional finance thanks to the continually improving technology underpinning crypto gaming. According to industry observers, crypto entertainment is the most likely path to widespread adoption and deployment of blockchain technology. As GameFi initiatives find traction among conventional gamers, crypto awareness will only rise.
To conclude, The GameFi concept is unquestionably superior to existing internet games. The play-to-earn mechanism, as demonstrated by blockchain and NFT games, is ultimately the key to mainstream crypto adoption. It’s no surprise, however, that this meteoric rise is showing no signs of abating. GameFi and NFTs will become a rallying center for DeFi at this rate. The possible outcomes for this growing sector are limitless, due to increased public interest and funding.
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