The Defi space just keeps on growing daily, creating new opportunities for everyone to make money from and GameFI is one of those opportunities which users can earn passively from. In this article, I’ll introduce you to GameFi and everything you need to know about how to get started.
What is GameFi?
GameFI is a fusion of two words, Game & Finance. It’s identified as a play-to-earn blockchain technology that offers incentives to its players by rewarding them in cryptocurrencies or NFTs.
Usually, performing tasks, competing against other players, and advancing through the many levels of the game is how players can gain in-game rewards. Additionally, they can move their resources outside of the game to trade on cryptocurrency exchanges and NFT market.
How does GameFi work?
The reward in GameFi can take on various types, including bitcoins or in-game items like virtual real estate, avatars, weapons, and outfits. Every GameFi project will use a unique model and gaming industry. The majority of the time, in-game assets are NFTs that are blockchain-based and tradeable on NFT marketplaces. Other times, though, gamers cannot trade or sell in-game items until they have been transformed into NFTs.
Typically, the in-game items will give players some advantages so they can earn more rewards. However, some games also offer cosmetics and avatars that are entirely aesthetic and have no bearing on the game’s gameplay or revenue.
Depending on the game, players can gain rewards through completing missions, engaging in combat with other players, or constructing buildings that can be sold. Through staking or lending their in-game assets to other players, some games can allow users to earn passive revenue without actively participating in the game. There are a lot of features that GameFI offers in the blockchain such as:-
- Play-to-earn model (P2E)
- Digital asset ownership
- Defi applications
Play-to-earn model (P2E)
The groundbreaking gaming mode known as play-to-earn (P2E) is at the heart of all GameFi ventures. It differs significantly from the pay-to-play business model used by conventional video games. Pay-to-play games need players to invest before they can begin. For instance, gamers must pay for licenses or ongoing subscriptions to play video games like Fornite.
The majority of the time, gamers of traditional video games won’t see any financial gains, since the gaming industry controls and owns all of the in-game assets. P2E games, on the other hand, can give players total control over their in-game possessions while simultaneously providing them with chances to make money.
Keep in mind, however, that everything is dependent on the model and game design chosen by the GameFi projects. Although it may and should, blockchain technology isn’t always used to give players complete ownership over their in-game assets. Before playing a P2E game, make sure you know how it operates and who is behind the initiative.
P2E games can be free to play and yet give players money benefits, however, certain GameFi initiatives demand that you buy NFTs or crypto assets before you can participate. As a result, it’s crucial to DYOR and weighs the dangers. You are more likely to lose your early investment in a P2E game if the startup costs are high and the profits are meager.
Digital asset ownership
Since digital asset ownership is made possible by blockchain technology, which we have already covered, players can earn money from their in-game assets in a variety of ways.
Players can own avatars, pets, homes, weapons, equipment, and much more, just like in video games. However, in GameFi, these assets can be produced as NFTs and issued (also known as NFT minting). As a result, gamers may fully control their goods and ensure their validity and ownership.
The concept of land ownership is emphasized in some well-known metaverse games, including Decentraland and The Sandbox. They let users earn money off of their virtual property. Gamers can buy digital plots of land in The Sandbox and develop them to make money. For instance, they can charge other players who visit their land, reward tokens for hosting content and events or charge users to use their custom-made land.
Staking, liquidity mining, and yield farming are just a few of the Defi products and features that certain GameFi ventures also provide. Players typically risk their in-game tokens to gain awards, gain access to premium products, or advance through the game’s stages.
The addition of DeFi components can further decentralize crypto gaming. Some GameFi projects let the community take part in the decision-making process, in contrast to traditional game studios that centralized control over their game updates. Through decentralized independent organizations, they can suggest and vote on the next upgrades (DAOs).
Players in Decentraland, for instance, can vote on organizational and in-game rules by locking their governance tokens (MANA) in the DAO. Their voting strength increases as they lock more tokens. This makes it possible for players to interact with game designers directly and affect how the game is made.
How to get started with GameFi
There are dozens of blockchain games available, and they all function differently. Watch out for suspicious websites and fraudulent projects. It can be risky to connect your wallet or download games from arbitrary websites. Ideally, only utilize the money you can afford to lose and make a fresh crypto wallet just for this purpose. If you are sure the game you found is secure, start playing by following these instructions.
1. Create a crypto wallet
You need a suitable cryptocurrency wallet, such as Trust Wallet or MetaMask, to enter the GameFi universe. You might need to use multiple wallets or connect to separate blockchain networks depending on the game you’re playing.
For instance, you must first connect your MetaMask to the BSC network if you wish to play blockchain games on the BNB Smart Chain (formerly known as the Binance Smart Chain). Use Trust Wallet or any other cryptocurrency wallet that is supported. The ones they endorse may be found on the game’s official website.
Additionally, you may access most games running on the Ethereum network by connecting your cryptocurrency wallet to the Ethereum blockchain. To cut expenses and boost performance, certain games, including Axie Infinity and Gods Unchained, will develop their own wallet.
The Ronin network was created by their team as a sidechain, however, Axie Infinity is based on Ethereum. As a result, in order to interact with the Axie Infinity ecosystem, you must use the official Ronin Wallet. The Ronin network lowers the cost of playing by significantly lowering the cost of trading and breeding Axies.
2. Connect your wallet to the game
You’ll need to connect your wallet in order to play a blockchain game. Ensure that the website you are connecting to is the legitimate one and not a duplicate. Look for the option to connect your crypto wallet on the game’s website.
Most blockchain games use your cryptocurrency wallet as a gaming account, therefore you’ll probably be prompted to sign a message on your wallet before you can join to the game, unlike traditional online games that require you to create a username and password.
3. Check the requirements to play
For the majority of GameFi projects, you must first buy their cryptocurrency token or in-game NFTs in order to get started. Although the prerequisites differ from game to game, you should constantly take the prospective rewards and overall dangers into account. Be sure to calculate how long it might take to start realizing a return and recover your initial investment.
You need three axes in your game wallet in order to play Axie Infinity. They are available for purchase on the Axie Marketplace. You need wrapped ETH (WETH) in your Ronin Wallet in order to buy Axies. You can purchase ETH from cryptocurrency exchanges like Binance and transfer it to your Ronin Wallet using the Ronin bridge. Please read How to Use the Ronin Wallet for additional details.
You can think about looking for a scholarship program if you don’t have any money or don’t want to take any chances. You can borrow NFTs to play with, but you must split your winnings with the NFT owners.
Since the beginning of Bitcoin, there have been those who have tried their luck with easy web games in the hopes of earning BTC gains. Although BTC games are still available, the emergence of Ethereum and smart contracts has altered the blockchain gaming industry, which can now provide much more complex and engaging experiences.
It’s simple to understand how GameFi draws players by fusing rewards with fun. Blockchain games are becoming more and more popular, thus it’s possible that more major corporations will start to develop the metaverse.