The crypto NFT’s sector is experiencing growth due to the play-to-earn (P2E) trend. This trend is creating numerous opportunities and leading to the emergence of GameFi unicorns. GameFi refers to the practice of offering economic incentives to players through blockchain games. In these games, players can complete tasks, battle with other players, advance through levels and earn rewards through cryptocurrency and NFTs.
Most blockchain games allow players to transfer gaming items from the virtual world, enabling them to trade their crypto earnings on crypto exchanges and items on NFT marketplaces. GameFi, following the success of Axie Infinity and PlanetIX, is quickly gaining traction in the traditional gaming industry.
GameFi combines the concepts of gaming and finance to create an open economy. Players in GameFi are rewarded with NFTs and game tokens. This type of game involves players, investors, NFT game developers, and crypto. GameFi offers benefits to blockchain game development. The question of whether it is wise to invest in GameFi development arises.
The Benefits of GameFi
GameFi allows users to earn money by incorporating blockchain and cryptocurrencies into its game-based economic model. This means users can generate revenue by utilizing gaming crypto tokens and participating in the platform with internet access.
Investors are taking advantage of the investment potential in crypto games. The GameFi mechanism is based on four key pillars that make it successful, which are as follows:
- The Play-To-Earn (P2E) Model
- Blockchain Technology
- Asset Ownership
In play-to-earn games, users can trade their valuable assets and exchange them. An example of such a game is Axie Infinity. By achieving the game’s objectives, players are rewarded with a portion of the game’s AXS token.
GameFi projects reward users when they achieve gameplay objectives, such as winning a tournament or a battle. This is different from play-to-win games.
The Benefits of Blockchain
GameFi projects are based on the blockchain, and many games are built on networks that use smart contracts. Ethereum is a popular platform for GameFi development, but it has limitations because its block space is limited.
When the block space exceeds a certain amount, the cost of transactions increases rapidly. This limitation of Ethereum has led blockchain game developers to explore alternatives such as Polygon Network, Solana, and Polkadot. These protocols offer higher capacity and faster processing speeds for GameFi applications.
All transactions on the blockchain are open, fair, and transparent. Whether you’re buying, selling, or exchanging items, the data of these transactions are stored on a decentralized public blockchain. On the blockchain, players own the assets, not the game developers. The blockchain stores data on who owns which item.
In play-to-earn crypto games, items like avatars, land, weapons, and gold are non-fungible tokens (NFTs). Players collect these items during gameplay and can exchange them for cryptocurrencies. These cryptocurrencies can then be exchanged for fiat money.
NFTs create unique game items and characters that cannot be copied or replicated. Players can earn money from their land assets, participate in tournaments against other players, and increase their earnings by improving their characters. GameFi projects offer a variety of levels for players to progress and advance through.
GameFi offers players numerous opportunities through digital ownership of unique assets. These assets are represented as NFTs in the game and cannot be falsified. On a game marketplace, you can trade a game plot and sell or lease your assets to other gamers. You can monetize your virtual land through virtual shops, casinos, concert venues, and more.
Axie Infinity, CryptoBlades, The Sandbox, CropBytes, and Star Atlas are among the top-performing GameFi projects or games. They have achieved great success and are gaining popularity. As a result, other games are now adopting a similar revenue-generating model.
GameFi projects are attracting investors and gamers due to their integration of DeFi elements, game tokens, and engaging themes. Additionally, the increasing popularity of the metaverse is contributing to the widespread adoption of GameFi, which presents profitable opportunities for both investors and game developers.