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A Short Review of GameFi Sector

The gaming industry has long had huge markets where users can trade virtual items, weapons, armor, etc. Some markets allow you to receive virtual currencies that cost nothing, and somewhere players earn real money (for example, the Steam marketplace). 

It turns out that most gamers are already familiar with digital currencies and platforms, but many virtual currencies in games have no value outside the gaming industry. For example, if a player buys currency in the game and some things for it, then often he cannot withdraw these things back to fiat.The solution to this problem is GameFi

GameFi is a combination of games and finance, which will allow gamers to combine business with pleasure: play and make money on it. And the blockchain will give this construction reliability, decentralization and transparency. 

The GameFi industry offers developers the opportunity to create new meta-universes and game worlds filled with creatures, events, objects and, most importantly, with their own in-game economy that attracts many players. Users can make money from in-game activities while enjoying the process. Blockchain game genres range from action to strategy.
Gaming applications are also useful because they introduce newcomers to cryptocurrencies and decentralized finance in a simple, unobtrusive manner.

How the GameFI Industry Began

In 2017, Ethereum launched CryptoKitties, the progenitor of modern GameFi applications. The first blockchain game instantly attracted tens and hundreds of thousands of users and even temporarily paralyzed the work of the Ethereum blockchain.Then the decentralized game about breeding, buying and selling cartoon crypto-cats led to an overload of the network of the largest altcoin in terms of capitalization. In a short period of time, processing transactions in the CryptoKitties game began to consume up to 20% of all computing power of the Ethereum network. In the first week alone, the creators of crypto-seals – the Vancouver company Axiom Zen – earned $ 2.6 million.And for the year, the amount of additional investments in the project exceeded $ 27 million.

This overwhelming success did not leave other blockchain developers indifferent. Therefore, in the wake of the popularity of CryptoKitties on the Ethereum network, a number of other decentralized games on the blockchain were launched, including Ether Shrimp Farm, Ether Cartel and Pepe Farm. As a result, in May 2018, the Ethereum network was again overloaded, which led to a 20% increase in the cost of gas. It is important to note here that these blockchain games more closely resembled the current concept of “yield farming” than play-to-earn projects. So, for example, in the case of Ether Shrimp Farm, users had to breed and sell crypto-shrimps, as well as try to make production as efficient as possible. Assets earned during the game could be withdrawn to ETH. Ether Cartel and Pepe Farm worked along the same lines.

That all changed in the summer of 2018 when the United States Major League of Baseball (MLB) released MLB Crypto Baseball, its very own blockchain game that worked in a similar way to CryptoKitties. This blockchain game can already be attributed to those projects from GameFi, which turned out to be the most in demand on the crypto market. For example, MLB Crypto Baseball users could buy collectible characters represented as league players. These characters also provided access to the most memorable moments of the league baseball games. Another popular collectible blockchain game NBA Top Shot works in the same way today.

As a result, by 2019, large companies began to enter the blockchain games industry. For example, AMD has joined the Blockchain Game Alliance and has announced partnerships with online gaming platforms Robot Cache and ULTRA. And the South Korean corporation Samsung has added the Tron blockchain game to its Galaxy S10 smartphone crypto wallet. 

By 2020, GameFi projects began to appear on the crypto market in the form in which we know them now – these are blockchain games where users can not only have fun and collect in-game items, but also earn tokens and in-game digital assets that can be sold on the secondary market. It is thanks to this concept that the GameFi sphere has received a multi-million dollar audience that is constantly growing.

There is nothing surprising in the fact that such a phenomenon as GameFi has emerged - previously it was only possible to invest money in games, but now there is an opportunity to earn money. 

The summer of 2021 is called the “summer of NFT” or gamification, because during this period several blockchain games using cryptocurrency as a background received a multiple increase in the value of their tokens. As an example, the Axie Infinity craze followed by the AXS token boost. This gaming platform on Ethereum at one point brought more than $ 800 million in revenue in 30 days and became the leader in this indicator among all DeFi protocols.

These are the most popular blockchain games you can make money on: 

  • Axie Infinity. An application that combines the possibilities for breeding game creatures of varying degrees of value and further battles between players. You can make money on both, so that the player is given economic freedom.

  • Cryptoblades. You need to equip the character with weapons and armor in order to then defeat other users in the arena.

  • Alien Worlds. As of early September 2021, it is the most popular blockchain game according to DappRadar. It is an innovative metaverse on the theme of space and the distribution of space.

  • Upland.The game is based on trading tracts of land in a world similar to the real one. There is an opportunity to build a dream home, start a virtual business, and sell real estate on a free open market.

  • Splinterlands. A card game with a collectible aspect. You can receive financial rewards for each victory, as well as trade cards of various rarities.

  • Aavegotchi. Collectible cryptographic objects based on the DeFi concept. Players collect characters, compete and team up with each other to gain gaming experience and earn money.

All of these applications use NFT: characters, weapons, clothing, land, decor items, etc. are represented in the non-exchangeable token format.Therefore, there is no doubt that the NFT and GameFi industries are not only dough, but also their growth correlates with each other.

FAQ

What is GameFi?

Game Finance is a combination of the mechanics of online games of different genres with decentralized finance.

 

What do you need to start playing?

Web3 wallet that supports the blockchain on which the game is running (Ethereum, Binance Smart Chain, WAX, etc.), as well as a small amount of cryptocurrency that is needed to start the game. For example, character creation.

 

How are GameFi and NFT related?

 

Almost every blockchain game uses NFTs (non-replaceable tokens). In this form, game items, skills, areas and much more are presented. NFTs can be resold in both in-game and third party markets. The more rare and valuable token a user manages to get/create, the more he will help out for it.

 

How else can you make money?

 

Gamified blockchain applications allow you to receive your own native tokens for performing various actions, for example, battles in gaming arenas.

 

What are the benefits of native project tokens?

 

First, they open up certain functions in the game. Secondly, you can buy / sell NFTs for them. Third, they serve to vote on project management. Finally, fourthly, these are promising speculative assets, which sometimes show growth by thousands of percent.

 

How much do you need to pay to start playing?

 

Depends on the specific game. For example, in Axie Infinity, to start playing, you need 3 Axies, while in Cryptoblades it costs 0.4783 SKILL to create a character. These prices can change depending on the market value of the tokens.