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What is GameFi in cryptocurrencies

What is GameFi in cryptocurrencies

Even 10 years ago, few people knew about cryptocurrencies. Closer to 2015, enthusiasts who love risk and are ready to learn something new have pulled themselves into the cryptocurrency world. In 2017-2018, cryptocurrencies experienced an influx of “hamster” investors who invested in growing assets without understanding the essence of the technology itself. After the first crash, investors became smarter and more selective, which is why 70% of ICOs went into oblivion. But the developers went ahead of the curve. Over the past few years, IEO, IDO have appeared. DEX, DeFi and a relatively new sector, GameFi, have emerged as separate areas.

Why the GameFi sector can be interesting for an investor

The concept of GameFi first appeared in 2020, although individual game projects began to be developed back in 2014. Initially, the developers tried to combine the popular Minecraft game with bitcoin – with the classic implementation of the game, users were rewarded in cryptocurrency. In 2017, “crypto kitties” were launched on the basis of Ethereum – at the peak of popularity, the application accounted for about 11% of the network’s transactions.

The classic gaming model provides for a subscription or license fee. In the game, the user can buy artifacts, but in fact they may not belong to him – the game is on the developer’s servers, which can create problems at any moment. And also in the classic games, the problem is with the ownership of the artifact, which only corresponds to a specific game.

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In GameFi, the gaming model has undergone dramatic changes. The structure has become more independent and therefore transparent. Thanks to decentralization in games, abuse by developers is excluded. The paid subscription has been replaced by the “play and earn” principle – for the game the user receives coins. In fact, GameFi technology has turned the gaming industry from a means of earning money into a tool for monetization. The GameFi concept involves fixing artifacts with the help of NFTs and combining gameplay with earnings. Profit for developers is the commission for transactions and the growth in the value of the internal cryptocurrency.

Categories of projects in the GameFi sector:

  • free2play. Projects that do not require start-up investments.
  • Play2Earn. Projects involving the monetization of gaming experience. For completing levels, users receive native tokens. True, no one forbids investing in character development either.
  • Move2Earn. A new direction for GameFi to reward physical activity rather than play. An example is the STEPN project. To participate, the user purchases digital sneakers, which, through touch sensors, record the real workload of a person.
  • Metaverses. So far, platforms of this subtype are represented by game worlds in which land and real estate are rented out. The user develops a virtual business and receives income from it in platform coins.

GameFi genres – any. From casinos and online lotteries to multi-level multi- and metaverses. In the future, the main game projects will be merged into a single holistic ecosystem with a single economy for different game genres.

The first startups in the GameFi sector were created on Ethereum. Now the leaders are Polygon, BNB Chain, Tron.

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The GameFi sector is closely intertwined with the DeFi sector. Staking, profitable farming and liquidity mining are integrated into the gaming system. In fact, DeFi plays the role of a financial system within gaming projects.

Conclusion. GameFi is the entertainment sector of the cryptocurrency world, which allows you to monetize the gaming experience. So far, its prospects can be called ghostly, since in comparison with the real game world, it covers a small number of users. But if it is integrated into new virtual worlds, individual startups in the segment can show growth of more than 200-500%.

About Eric R. Brinkley

CEO Fxbotreview.com Algotrader. Blogger. I write interesting content, do content with you, and also maintain a website with independent reviews of forex software. Trading robots, Indicators etc..

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