No one will argue that GameFi is one of the latest and hottest crypto trends.
According to a 2021 study by Statista, around 3 billion people worldwide play games. That’s about 40% of the world’s population. What exactly attracts people to play games? How can blockchain technology improve this experience?
Some people might use games to escape reality, and games in the Metaverse will take this to a whole new level; some people might collect in-game items and show off their achievements, and in-game NFTs make that kind of ownership a reality.
Then there is the new experience offered by blockchain games: play and earn. Some people can earn cryptocurrency while playing games while they pass the time on the subway during their morning commute; some people may want to support a project but would rather give time than money; Friends brag about the unique items they get.
That’s the multidimensionality GameFi can offer, and that’s why people pay attention.
How does Play-to-Earn work?
The Play-to-Earn mechanism in blockchain games is one of its main selling points and avenues to scale. P2E takes the already popular concept of letting players collect in-game items and assigning those items real-world value. Players can now not only collect potentially valuable assets in the game, but also earn cryptocurrency by completing quests, earning achievements, leveling up, or simply spending time in-game. In short, players can monetize their gaming experience. For GameFi itself, giving in-game tokens more use cases will also make them more valuable.
If you’re not familiar with the concept of an in-game economy, in a nutshell: the flow of resources from game to player and player to player.
The Play-to-earn model is an important defining point for the in-game economy of blockchain games, as it creates a way of allocating resources to players.
GameFi projects may also contain elements of DeFi or decentralized finance. This means players will be able to lend their assets to liquidity pools, or stake the game’s native tokens for yield.
So how does this in-game economy benefit projects? Depending on the economic organization, a project may simply seek to use the game as a way to distribute its currency and have its value rise with usage. In the case of GameFi project Illuvium, the project may also require users to pay to unlock the ability to acquire higher-value assets.
Why be interested?
First, GameFi provides a way to distribute tokens to its users. Many of its users are probably just gamers, not necessarily crypto enthusiasts. For now, cryptocurrencies are still on the left side of the adoption curve, but concepts like GameFi could provide a little fuel to drive mass adoption. For this reason, GameFi has recently become very popular with investors.
Among gamers, GameFi means that they truly own the assets they acquire in the game. These assets have real-world value and can even be transferred to other games. It’s also one of the easiest ways to get into cryptocurrencies for the curious but risk-averse. Not to mention, because players can get tokens that may appreciate in value, there is a strong notion that playing now, so to speak, “buying the dips” will pay off well in the future, so many flock to GameFi.
Popular items in GameFi
To help understand what GameFi is and how it manifests, let’s briefly review some of the leading projects in the space.
Axie Infinity is a battle game where players breed, trade and fight creatures called Axies. The ownership of these Axies is expressed through NFTs. It is one of the first popular blockchain games and a proof-of-concept that the Play-to-Earn model can attract a large number of players.
Axie Infinity has become one of the biggest projects in GameFi, with players pouring into the game and earning valuable NFTs. Currently, it ranks third in terms of market capitalization of GameFi projects, behind Sandbox and Decentraland.
Axie’s native tokens are AXS and SLP.
Illuvium is an open-world fantasy game that has enjoyed steady popularity, in part due to its ambition to provide a high-quality gaming experience and to provide DeFi features such as liquidity mining.
Aiming to be the first AAA-rated blockchain game, Illuvium has been attracting a lot of attention and investment.
Illuvium’s native token is ILV.
In Sandbox’s case, its goal is not just to provide a gaming experience, but to be a Metaverse ecosystem. With its vision for blockchain gaming as well as DeFi and the Metaverse, Sandbox has gained a lot of traction, making it currently ranked #2 in Play to Earn games on CoinMarketCap.
The sandbox’s token is SAND, and ownership of its digital real estate is represented through an NFT called LAND.
YGG or Yield Guild Games came to the fore after securing funding from investment firm Andreesen-Horowitz.Representing Yield Guild Games, the project is a DAO, or Decentralized Autonomous Organization, focused on investing in NFTs so that guild members (DAO members) can better monetize their game assets and experiences.
Yield Guild Games’ native token is YGG.
Rush to the Metaverse
If being able to get real-world value out of a game isn’t exciting enough, imagine being able to easily transfer in-game items, skins, characters, etc. from game to game. This is a reality for blockchain games that exist in the same virtual world (a virtual, blockchain-powered world). And projects like Sandbox and Decentraland are under construction. With Metaverse, you not only have a place to make money, but also a powerful marketplace and social network to play, talk and trade.
Gaming veterans like Microsoft and Sony are keeping a close eye on the Metaverse, forming the XR Association with other big players in the industry.
So there’s no doubt that there’s some real firepower driving the Metaverse and GameFi.
DeFi + GameFi
Not only do DeFi and GameFi concepts overlap in their emphasis on true asset ownership and decentralization, but some GameFi projects also include DeFi services. For example, Axie Infinity allows users to earn income by staking their native token, AXS. In Harmony’s blockchain-based game DeFi Kingdoms, users can take advantage of its DeX and liquidity pool capabilities.
Therefore, in addition to playing games and completing game tasks, players can also earn money by using DeFi services.
Where to start your GameFi journey?
Most GameFi platforms require wallets to store in-game assets, so MetaMask, WalletConnect, or Coinbase Wallet are some good options. After registering, you can connect your wallet to the game.
Most games require you to purchase necessary NFTs (such as characters or items) to start playing. For example, Axie Infinity requires you to purchase 3 Axie NFTs to start the game. After that, you can start playing!
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/x-to-earn-the-rise-of-gamefi/
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