GameFi: What Is It? Top 5 Play-to-Earn Games for Beginners
GameFi: What Is It? Top 5 Play-to-Earn Games for Beginners
In 2021, GameFi gained considerable traction in the crypto market, prompting many to ask what GameFi is and why it attracts millions of users worldwide.
Blockchain and NFTs in gaming have been hot topics for several years and are rapidly becoming the future of earning money through gaming.
In this article, I'll help you understand what GameFi is and introduce reputable GameFi titles worth exploring.
Introduction to GameFi
By June 2021, games like Axie Infinity had risen to prominence, allowing players to earn money through gameplay. GameFi quickly garnered attention and has since evolved into a billion-dollar industry.
What is GameFi?
GameFi projects attract new players by offering them opportunities to earn money through gaming activities.
As of July 2022, over 5,000 GameFi projects have been built.
GameFi Explained
GameFi refers to blockchain games that enable players to earn money. Combining gaming and financial elements, GameFi is also known as play-to-earn.
Typically, players can earn cryptocurrencies and NFT rewards by completing tasks, battling other players, and achieving various levels in the game.
Unlike traditional video games, most blockchain games allow players to transfer in-game items out of the virtual world. This enables players to trade their assets on NFT markets and sell cryptocurrencies on crypto exchanges.
The GameFi ecosystem uses cryptocurrencies, non-fungible tokens (NFTs), and blockchain technology to create a virtual gaming environment.
All players can earn rewards by participating in game activities. These rewards can exist as tokens or NFTs, which players can move outside the game to trade on crypto exchanges or NFT marketplaces.
How GameFi Works
Each GameFi project operates its own economy and mechanisms.
Rewards in GameFi come in many forms: tokens, land, skins, avatars.
Most in-game rewards are NFTs operating on the blockchain, allowing players to trade them on the market. In other cases, rewards need to be converted into NFTs for trading.
Game assets serve specific functions and utilities for players, enabling them to earn more money. Additionally, there are decorative assets like avatars that do not impact earning potential.
To earn rewards, players must complete tasks, battle monsters/other players, or construct buildings in the game. Some simpler games allow passive earnings through staking or renting.
P2E Model
The key difference between GameFi and traditional games lies in the play-to-earn (P2E) model. P2E revolutionizes the gaming market, contrasting sharply with traditional gaming approaches.
In traditional games, players pay to purchase in-game items and play for enjoyment.
In GameFi, players invest initial capital to play and earn money, requiring them to understand and research gameplay beforehand. For instance, Axie Infinity required players to purchase NFTs to participate in earning money, with two token types: AXS (governance token) and SLP (in-game utility token).
The dual-token model is prevalent in most GameFi projects.
While traditional games rarely generate financial profits for players (with in-game assets controlled by game companies), GameFi empowers players with blockchain-operated assets, providing them control and potential earnings.
However, GameFi projects heavily depend on economic foundations and initial game design. Applying blockchain technology allows players full control over their assets, but this isn't always guaranteed. Research the project and development team thoroughly before diving into play-to-earn games.
While many free-to-earn GameFi projects generate income for the majority, some GameFi projects require players to start with project-specific NFTs or cryptocurrencies to participate. Manage your risks when engaging in play-to-earn games; some projects may require substantial investments, potentially risking your initial capital.
Ownership of Digital Assets
Blockchain technology enables individuals to own digital assets, allowing players to earn money from their in-game assets in various ways.
Similar to traditional games, players can own avatars, pets, houses, weapons, tools, etc. However, in GameFi, these assets can be issued or created as NFTs on the blockchain (also known as minted NFTs), providing players with complete asset control, with verifiable authenticity and ownership rights.
Popular metaverse games like Decentraland and The Sandbox focus on land ownership concepts. They enable players to earn money from their virtual land. In The Sandbox, players can purchase digital real estate pieces and develop them to generate revenue. For example, they can charge fees when other players visit their land, earn token rewards by organizing content/events, or rent their land to others.
DeFi Applications in GameFi
Some GameFi projects offer products and features akin to DeFi projects, such as staking, liquidity mining, and yield farming. Typically, players can stake their cryptocurrencies or NFTs in games to earn rewards, unlock exclusive items, or access new game levels.
For instance, Axie Infinity introduced Land Staking, allowing NFTs Land owners to stake and earn $AXS.
Incorporating DeFi elements can make crypto gaming more decentralized. Unlike traditional game studios that centrally control their game updates, some GameFi projects allow community participation in decision-making processes. Through decentralized autonomous organizations (DAOs), players can propose and vote on future game updates. The more tokens they stake, the higher their voting power. This enables gamers to directly interact with game developers, positively influencing game development with the majority of players.
However, not all DAOs are efficient with GameFi projects; you must manage risks and understand the project's developmental directions.
Guide to Playing GameFi
GameFi essentially refers to financial games, with thousands of titles on the market, each with unique operations. Be cautious of projects and avoid scam websites.
If you're familiar with the crypto market, you'll find it easier to navigate GameFi projects.
For newcomers to GameFi, follow these steps:
Step 1: Create a crypto wallet and deposit funds into it.
Metamask is among the most widely used crypto wallets today, and you can create them for free.
Step 2: Learn about the game project.
GameFi projects are essentially financial games. Research key information about the project, such as gameplay, starting capital, development team, ROI, etc.
Understanding the project helps you assess its credibility for effective participation.
Step 3: Check the game's requirements and start playing.
Some projects may require minimal NFTs or a token amount to start playing.
For example, to play Axie Infinity previously, you needed 3 NFTs.
Each game has different requirements. Some free-to-earn games may not require anything specific.
However, assess the earning potential and return on investment (ROI), even for free-to-earn games.
If you lack initial capital for GameFi projects, you can join Gaming Guilds. They provide NFTs, scholarships, and profit-sharing opportunities with players.
Top 5 Reputable NFT Game Projects
- Axie Infinity
Crazy Defense Heroes
Blankos Block Party
The Sandbox
Splinterlands
These projects represent diverse genres within GameFi, offering unique gameplay experiences and financial opportunities for players.
Conclusion
In the latter half of 2021, GameFi projects surged and attracted significant attention from large investment funds, such as Animoca Brands and Binance Labs.
As blockchain technology continues to develop and gain popularity, it will further propel the growth of GameFi projects. However, exercise caution, manage risks, and avoid FOMO (fear of missing out).
GameNFT projects are built on prominent ecosystems like Ethereum, Avalanche, Solana, Binance Chain, Polygon, Harmony, Fantom, each with unique features that attract developers and end-users alike.
Since Bitcoin's emergence, the blockchain world has become busier, sometimes appearing daunting to newcomers. However, with Ethereum and smart contracts, the blockchain world has become increasingly vibrant and engaging.
In summary, GameFi is a new branch of the crypto market that efficiently attracts a large number of users. With its popularity and increasing number of GameFi projects, you'll see many major companies participating in building metaverses and games in the future.
