GameFi is a combination of the words Game (game) and Finance (finance), which means to provide players with economic incentives and to earn while playing blockchain games, also known as chain games. The GameFi ecosystem uses cryptocurrencies, non-fungible tokens (NFTs) and blockchain technology to create virtual gaming environments.
Players can usually earn in-game rewards by completing missions, playing against other players, and leveling up through levels, as well as transferring game assets out to trade on cryptocurrency exchanges and NFT marketplaces.
GameFi has become one of the hottest tracks in the crypto industry. Starting in July 2021, the success of Axie Infinity has piqued the interest of traditional game companies – giants like Ubisoft are entering the GameFi market.
Differences from traditional games
1、Player engagement is higher and the game can be modified or optimized
Compared with traditional game companies planning and designing gameplay, scenes, characters, etc., every player in ChainGame can participate in the improvement and upgrade of the entire game. There are governance tokens in the game. Players can get tokens when playing the game. Players can upgrade and improve the game through token voting, so as to obtain a better experience in the future. Players and the game have higher interactivity and sticky.
2、Chain Games has no central control and no unified operation center
Chain Games is not owned by a single company, but a game jointly operated and maintained by developers and players. The popularity of the game is affected by the market. The better the experience the game brings to the players, the higher the number of users. Games on the chain are not under the control of the company, and the company cannot control the future development of the game or force it to close. Everything is related to the users themselves.
3、”Play to Eran” is more adaptable
Like traditional games, Chain Games can make money while playing. While playing games to relax, the gold coins, props, etc. obtained by fighting monsters and upgrading can be sold in the on-chain market. And this is very obvious to the Filipino players of Axie Infinity, and even formed a professional game guild of Axie Infinity in the Philippines, organized local residents to participate in Axie Infinity, provided it for free to players without Axie, and earned income by playing games. The monthly income of players has exceeded the income of local traditional employees, and some people even have 2-3 times as much.
How to choose a Gamefi project
The key to GameFi’s sustainable development is to continue to generate revenue for players. The revenue of players and developers in GameFi comes from the transaction of in-game currency and assets. A GameFi that can continue to generate revenue requires three key factors: an excellent founding team, a good token model, and maximized player interaction. An excellent founding team can accurately capture and describe the current market demand, design and operate the corresponding products well, and then obtain strong financial support and trust endorsement. The design of the token model is the skeleton of the GamiFi economic system, and the game resources attached to the token are like flesh and blood. The production, consumption and unlocking of in-game resources need to cooperate with the token system to ensure the smooth operation of the entire economy.
GameFi’s economic model can only expand the in-game economy if it continues to operate. This must rely on the interaction between players. The design of an excellent chain game must promote the continuous interaction of players. Generally, it can be achieved by increasing gameplay and openness, and the ultimate openness is the metaverse form.
Gamefi development status
In 2021, the number of GameFi projects has skyrocketed, and it will likely continue to increase in the future. As of May 2022, DappRadar has gathered more than 1,500 blockchain games. Popular games are spread across multiple blockchains, including Ethereum, Binance Smart Chain (BCS), Polygon, Harmony, Solana, and more.
With the continuous upgrading of blockchain technology, GameFi is expected to continue the momentum of rapid development. Having in-game assets and earning money while playing makes GameFi attractive to many players, especially in developing countries.
However, in terms of transaction volume, the GameFi market size will only account for 2.5% of the global game market in 2021, and traditional game manufacturers are actively embracing blockchain technology. Traditional game makers have transformed by developing single games or building blockchain game platforms, but it is still in the early stage, and the acceptance of players is generally not high.