GameFi has become a very popular notion in the gaming and blockchain sectors lately. Traditional video game players, who are accustomed to paying to play an online game, are drawn to blockchain video games, where they can make money for the time and effort they invest. In this post, we explain what GameFi really is and list some popular GameFi games.
What Is GameFi?
The term GameFi comes from joining two words: games and decentralized finance (DeFi). It was first coined in a 2020 tweet by Andre Cronje, the CEO of Yearn Finance. Since then, the phrase has been actively used to refer to video games with decentralized financial components that are backed by blockchain technology.
But the roots actually go back to 2013. Some early initiatives in this field included bitcoin integrations in Minecraft servers and other games like Bombermine that rewarded players with real Bitcoins.
The games in GameFi add the unique characteristics of blockchain to the concept of traditional video games that allow players to own various virtual elements like skins, characters, objects, or even areas of the game. Some games still reward players with actual cryptocurrencies instead of game points that only hold value within the game.
How Does GameFi Work and How Can You Make Money Off It?
What makes GameFi truly unique is its play-to-earn model. Unlike traditional games where you need to buy in-game assets like weapons skins, which only hold value within the game, GameFi allows you to earn assets that are valuable in the real world too.
Items such as avatars, badges, land, weapons, and outfits are presented as NFTs that can be unlocked while playing the game. To earn money, you will have to work on your inventory, find interesting items, then trade them on an NFT marketplace. Many games also directly reward players with cryptocurrencies as well, which in turn can be traded for fiat money on an exchange.
But that’s not it. Since everything is recorded in a blockchain ledger, it is very easy to prove ownership of whatever you own in the game. This allows players to create various streams of income while playing GameFi-based games by loaning out their assets like avatars and plots of land to generate passive income.
The best part is that players can do all this without being dependent on a centralized organization to receive paychecks, as these agreements are registered as smart contracts which execute themselves.
Another advantage of GameFi games is that a majority of them have been designed with a casual audience in mind. In other words, most of these games do not employ mechanics that require hours of grinding to master. Instead, they focus on timing and strategy and are generally pretty easy to play. However, this can also be seen as a drawback, as the simplicity of these games may not seem appealing to fans of AAA titles and competitive games.
How to Start Using GameFi
1. Create a Cryptocurrency Wallet
In order to store the in-game currencies and the NFTs that you will collect while playing the game, you will have to create a wallet that is compatible with the game. In the world of blockchain gaming, your identity is not a username but your cryptocurrency wallet.
2. Add Funds to Your Wallet
All GameFi games are free to download. However, to actually play some games like Axie Infinity, you will need a starter kit that, in most cases, can include your digital avatar. To buy that, you will have to put down an initial amount of money that you will add to your wallet in the form of the compatible cryptocurrency.
3. Buy the Basic Digital Assets to Play
Once you have the funds in the compatible cryptocurrency in your wallet, you need to swap them to buy the digital assets required to play the game.
Popular GameFi Games
1. Axie Infinity
Axie Infinity is the most popular NFT-based online video game. It became the first blockchain game to surpass $1 billion in token sales, a fifth of which happened in one week. It has more than 1.8 million daily active players.
The game itself is about trading, breeding, and collecting digital creatures called “Axies,” which are digitized as NFTs. You can train these creatures and cross breed them to create better Axies with higher values and sell them in a marketplace.
Axies generally cost as little as ten dollars and as much as thousands of dollars, depending on how unique and rare they are. For example, a unique Axie NFT known as the Mystic Axie was sold for 300 ETH in 2021.
Decentraland is an open-source 3D virtual world platform with potentially limitless possibilities. It allows users to buy virtual plots of land in the platform as NFTs using the MANA cryptocurrency, then monetize that piece of land in many ways.
Simply put, Decentraland is the Minecraft equivalent of the GameFi world, where you can create houses, buildings, marketplaces, and interact with other players. The difference here is that, unlike Minecraft, the digital land in Decentraland holds a lot of value. In fact, a piece of Decentraland property was sold for $2.4 million USD in 2021.
Illuvium is an open-world role-playing game based on the Ethereum platform. It is the first AAA blockchain game with graphics that are impressive enough to attract hardcore gamers as well.
The objective is to wander across the huge open world and fight to capture a monster called Illuvials. Different Illuvials belong to different classes, have different skill sets and strengths, and can also be cross-bred to create a new breed. It’s more or less like Axie Infinity but with much more advanced graphics and a larger open-world ecosystem.
Built on the Ethereum blockchain, CryptoKitties is a game that allows players to collect and breed cute cats. Each CryptoKitty generated is a unique NFT and can be sold at a high price. To date, the most expensive CryptoKitty is kitty #896775, also known as “Dragon,” which was sold for 600 ETH.
5. Alien Worlds
Alien Worlds is an NFT-centered metaverse game based on the Ethereum, WAX, and Binance Smart Chain blockchains. The game focuses on exploration and mining and enables players to own land, use minions to fight wars, and collect tools and avatars.
Once you’re in the game, you take on the guide of an explorer in the year 2055 with a mission to explore the metaverse, go to different planets, and mine their resources, which in this case is Trillium (TLM). Apart from mining TLM, you can also earn by selling the NFTs you collect and by monetizing the land you buy in Alien world.
CryptoBlades is a very interesting game based on fighting battles with other players. You will need to constantly keep upgrading your character and weapons to keep up with the competition and make your avatars stronger.
After a battle, the winner is rewarded with SKILL tokens that can later be swapped for fiat money. Additionally, you can sell your characters for a good amount of SKILL tokens which kind of adds the breeding aspect to the game as well.
The Future of GameFi
GameFi is a disruptive technology, which just might be spearheading the future of the gaming industry with a constantly growing game library and players. Right now, the GameFi industry is gaining a fair amount of popularity and is paving the way for an entirely different direction in gaming that is based on the play-to-earn model.
Major players in the gaming industry, like Ubisoft and AMD, have shown support to blockchain gaming and are making significant efforts to enter this sector as well. Ubisoft even launched its own in-game cryptocurrency called “Quartz,” which will be used to buy various in-game NFTs in Ubisoft’s latest game: Tom Clancy’s Ghost Recon Breakpoint. With events like these, it’s fair to say that GameFi is bound to grow further and possibly acquire an even larger chunk of the gaming industry’s market share.
Also, given the kind of responses popular arcade games like Candy Crush Saga have gained over the years, it makes a lot of sense to say that arcade games that do not require long-term commitments would skyrocket in downloads if they started making money for their players as well as entertaining them.
Frequently Asked Questions
1. Is it necessary to pay money to get into GameFi?
There are many free-to-play blockchain games, but the more popular ones with a huge user base and earning potential generally have some front-end costs. These may be very high for very popular games and may become a barrier for people wanting to get into the world of blockchain gaming.
2. How much money can I make with blockchain gaming?
Much of it would depend on your skills and luck, but with some knowledge and experience, it is possible to earn around $50 to $100 a day. There is, however, no upper limit, and it would eventually depend upon your creativity, strategy, and also your upfront investment as well. GameFi NFTs sometimes do end up selling for millions of dollars.
3. Do I need to have a high-end gaming setup to enjoy GameFi?
No. GameFi games are generally not very taxing on systems, as they are not very graphically intense. Axie Infinity will be able to run on most computers that are able to run Windows 10. These games are often two-dimensional, where the opportunity to make money is the appeal and not graphics.
4. What are Gaming Guilds?
Gaming Guilds are organizations that fund people who want to play GameFi games but do not have enough resources to purchase their own starter kits. They take applications from people interested in playing on their discord servers, then lease the applicants NFTs they can use to start making money on GameFi. During the lease period, they are supposed to surrender around 30% of their earnings to the guild in return for access to the NFTs (characters).
5. Is is possible to earn enough to make a living playing GameFi games?
Since the income you generate from playing GameFi games is highly volatile, it’s still a little early to say that it can be seen as a full-time income opportunity, especially if you are in a country with a high cost of living. However, there are a few cases where people from countries like the Philippines have managed to make more than the minimum wage by playing GameFi-based games.
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