7 mins readWhat if someone tells you that you can make money and play at the same time? Yes, you’ve read that right! Thanks to the play-to-earn or P2E business model, it’s now possible to have the best of both worlds! This is exactly where GameFi enters the picture.
MIGHTY ACTION HEROES - Action / Esports / Mobile / Web3
GameFi at a Glance
GameFi is the market segment that belongs to the DeFi or decentralized finance ecosystem combining game theory elements with blockchain technology to boost interest in a specific blockchain project and establish the users’ deeper relationship with a particular cryptocurrency.
The P2E or play-to-earn business model is one of the major aspects of the GameFi ecosystem. It offers gamers more tangible incentives for both their effort and time. Some of the most popular incentives are NFTs or non-fungible tokens and in-game cryptocurrencies that users can use, trade, or sell in other financial applications as collateral.
How Does GameFi Work?
Smart contracts support GameFi platforms and they automatically carry out certain actions after meeting specific conditions. The programmability and flexibility of these smart contracts are the very reason why they are powerful tools for the development of innovative and unique experiences in GameFi.
Blockchain games enable player-owned digital assets within their economies
Every game usually has several smart contracts customized for a particular function or purpose in the game. A game, for instance, may have a single smart contract for the management of the development and distribution of the in-game assets. Another contract might be dedicated to managing incentives and rewards for players, while the third contract could be for the management of the in-game economy and asset trading.
The Development and Rise of GameFi
Game developers can take advantage of the P2E business model to give incentives for user engagement and create new streams of revenue. At the same time, it also gains access to a dedicated and huge user base that includes not only traditional gamers but also investors and traders.
Some platforms let investors and developers earn a portion of the transaction fees every time players stake, trade, or sell their digital assets in a certain GameFi ecosystem.
GameFi is believed to be poised to become one of crypto’s largest sectors and has turned into a primary focus of the early-backer attention. Analysts also predict that by 2028, the value of the sector will reach a whopping $104.5 billion.
Here are some of the platforms where blockchain gaming is prominent:
| Ethereum | Ethereum is an open-source, public, distributed blockchain computing platform featuring smart contract (scripting) functionality, which facilitates online contractual agreements. |
| SOSV | SOSV (formerly SOS Ventures) is a venture capital firm founded in 1995 by Sean O'Sullivan that provides growth, seed, and venture capital funding to startups. SOSV runs six seed accelerator programs. |
| Huobi | Huobi was founded in September 2013 by Lin Li and Jun Du. An alumnus of Tsinghua University, Li was a computer engineer at Oracle before founding Huobi. |
| Polkadot (cryptocurrency) | Polkadot is a blockchain network built to enable Web3 and decentralized internet. |
| VeChain | VeChain is a privately held company developing a blockchain platform with a focus on the verification of the supply chain of products like luxury goods. |
| HydraDX (HDX) | HydraDX is a Basilisk cross-chain liquidity protocol on Kusama founded by Mattia Gagliardi and Jakub Greguš. |
| Binance | Binance is a cryptocurrency exchange. |
| Axelar | Axelar is a universal interoperability platform that connects blockchains through a decentralized network and an SDK of protocols and APIs. |
| Brokoli Network | Brokoli Network is a Estonia-based company founded in 2021 by Matthew Le Merle. |
| Green Satoshi Token | Green Satoshi Token (GST) is the game token of STEPN - a Web 3.0 lifestyle app with in-built fun social elements and gamification design. |
| Solana | Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world. |
| Polygon | Polygon is a protocol and a framework for building and connecting Ethereum-compatible blockchain networks. |
Popular Activities in GameFi
The following are some of the top P2E gaming activities in a Metaverse app or online:
- Creation and sales of virtual assets
The gamers are allowed to design distinct in-game items including virtual real estate or digital pets and sell these to the other players to receive digital assets in exchange. This form of activity tends to be very lucrative for developers with the design skills for creating attractive in-game items.
- Staking
Several platforms in GameFi allow players to stake digital assets in return for participation in the governance of the game or taking part in some in-game activities. Through staking, players can take advantage of a means of earning passive income while making their contributions to the growth and development of the Metaverse or the game itself.
- Trading
The gamers can also trade their in-game virtual assets with their fellow players. It is an activity that can be quite appealing to those gamers who want to collect unique or rare virtual items.
What are the Risks of GameFi?
There were several reasons behind the controversial status of GameFi. However, among the primary concerns is related to the ESG or Environmental, Social, and Governance risks.
For instance, there are issues regarding GameFi’s impact on the environment or the planet, especially because it has something to do with the blockchain networks’ consumption of energy.
Polygon is one of the favored blockchain platforms for games
But even after being embroiled in such controversy, GameFit is continuously enjoying booming popularity, capturing the attention of gamers, investors, and developers alike. However, with the evolution of the market segment, it is possible that the regulators would need to address issues regarding the relationship between gambling and GameFi and develop suitable safeguards to guarantee the compliance of the gaming ecosystem with the local regulations and laws.
Getting Started with Earning Money with GameFi
You need a combination of strategy, skill, and luck to earn money through GameFi. It’s critical to research reputable and popular GameFi platforms to find reliable GameFi activities. You also have to familiarize the tokenomics or economic models they will be using before joining.
Crypto experts also suggest that new gamers must begin to invest a small number of resources and time first to test the withdrawal procedures and policies of the platform and assess its reliability with no need to risk a substantial loss.
Follow these steps to get started with using GameFi to earn money:
1. Develop a crypto wallet.
A crypto wallet is necessary for you to make transactions in the game and store the NFTs and virtual currencies throughout the gameplay. You can choose from the different available wallets although many games require using certain wallets. Make sure you visit the official website of the game to know its supported wallets.
2. Connect the game and the crypto wallet.
Blockchain games use a crypto wallet as your account, which makes it different from traditional games where a password and username are often required. To save yourself from scams, make sure you only use the wallets that you download from the official app stores explicitly connected to the official website of the wallet. In addition, as an extra security precaution, make sure you use a specific wallet for every game you’re playing.
3. Add funds to the wallet.
Your crypto wallet must be pre-funded with the compatible cryptocurrency to buy starter items required for playing the game, such as native crypto tokens or characters.
What Lies Ahead for GameFi?
Despite some issues with GameFi, there is no denying that its future looks bright enough for the platform. With around 3.24 billion gamers all over the world, it won’t be too much to say that the up-and-coming GameFi sector has a significant opportunity for further growth and development.
