GameFi: Introduction, Working and Uses
With the continuous development of technologies, a lot of people have started to adopt online gaming. While some people prefer playing online games, with no involvement in money, a lot of people play games to earn money. In the meanwhile, GameFi becomes a platform for gamers who want good money.
Although the GameFi name seems like something related to games, it refers to play-to-earn blockchain games that propose economic incentives to the players. In easy words, the players will be able to earn cryptocurrency and NFT rewards after completing the tasks or battling other players and progressing to the different levels of the game.
Unlike traditional video games, several blockchain games allow players to transfer gaming items out in the virtual world. With this, the players can trade their items on NFT marketplaces and even their crypto earnings on crypto exchanges.
GameFi has been slightly taking over the traditional gaming industry as it attracts gamers with an opportunity to make money along with fun. So, what exactly is GameFi, and how is it different from traditional video games? This is exactly what we are going to discuss here, in this blog.
What is GameFi?
It is a fusion of word games and money. Gamefi refers to play-to-earn blockchain games. Its ecosystem works with cryptocurrencies, and non-fungible tokens (NFTs), in the backdrop of blockchain technology in an order to create a virtual gaming environment.
The players can not only play the game and earn money, but they can also transfer their assets outside of the game in the real world. They can also trade on crypto exchanges and NFT marketplaces.
How does GameFi work?
In GameFi, a player can earn a reward in various forms, such as cryptocurrencies or in-game assets that include virtual land, avatars, weapons, and costumes. Each GameFi project comes with a different model and game economy. Most of the time, the in-game assets are NFTs that process on blockchain technology. This means they can be exchanged on NFT marketplaces. However, the in-game assets are required to be converted into an NFT before trading or selling them.
The in-game assets provide several benefits to the players. They allow the players to make more money. However, there are some games with feature avatars and cosmetics that are just visual and don’t have any impact on the gameplay or earnings.
As per the game, the players are offered to earn rewards by either completing tasks, battling other players, or establishing the monetized structures on their land. Some games allow players to generate good income without even playing the game. They can either stake or lend their gaming assets to other players.
Let’s have a look at some of the other features of GameFi.
Play-to-earn model (P2E)
In the GameFi projects, you are given the play-to-earn (P2E) option which has turned out to be a revolutionary mode of gaming. It’s quite different from those traditional video games. While Pay-to-play mode asks gamers to invest before playing, P2E games provide players with full control over their in-game assets besides offering several opportunities for them to earn money.
Apart from buying or selling the Axies, the players are also allowed to lend their Axies to other players. This allows the owners to earn money without even playing the game. This model is known as scholarship which allows the scholars to play and earn rewards with the help of borrowed Axies.
Ownership of Digital asset
Notably, blockchain technology provides you with ownership of the digital asset. Likewise, the players are allowed to monetize their in-game assets in several ways. The players can own their avatars, houses, weapons, tools, and a lot more. However, these assets can only be provided or created as NFTs in blockchain technology. With this, the players will have full control over their assets, maintaining authenticity and getting verifiable ownership.
Several GameFi projects propose DeFi products and features. These include staking, yield farming, and liquidity mining. In other words, the players will be allowed to stake their in-game tokens in an order to earn rewards and unlock exclusive items. They can also access new levels in the game. With the help of DeFi elements, crypto gaming becomes more decentralized.
How to get started with GameFi games?
There are numerous blockchain games in the market and all of them work differently. In the meanwhile, it can be dangerous to connect your wallet or download the games via random websites. Therefore, you must create a new crypto wallet for this and only use the funds that you can afford to lose.
Creating a crypto wallet
In an order to enter the GameFi world, you are required to have a compatible cryptocurrency wallet. These could be Trust Wallet or MetaMask. On the basis of the game that you’re playing, you would have to use various wallets or connect with various blockchain networks.
If you wish to play the blockchain games on the BNB Smart Chain, you will have to connect your MetaMask to the BSC network. Besides, you can also use Trust Wallet or other crypto wallet.
It is worth mentioning here that you will be allowed to connect your crypto wallet to the Ethereum blockchain. With this, you can access most of the games that function on the Ethereum network. However, there are still several games, like ‘Axie Infinity’ and ‘Gods Unchained’, that will establish their own wallet in an order to reduce the costs and enhance the performance.
Connecting your wallet to the game
In an order to play a blockchain game, you will have to connect to your wallet and make sure that you are connecting to its official website. Please note, no fake copy will work. You can visit the game’s website and go through the options in an order to connect your crypto wallet.
Several traditional online games require setting up a username and password. On the other hand, most of the blockchain games use crypto wallet as a gaming account. Therefore, you will most likely be asked to sign a message on your wallet before connecting to the game.
Checking the requirements to play
Most of the GameFi projects require purchasing of cryptocurrency tokens or in-game NFTs in order to begin the venture of gaming. However, the essential requirements vary from game to game and hence, you must consider the earning potential and the risks.
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