What Is Gamefi and How Does It Work?

GameFi is an exciting blockchain use case that brings more value to the traditional gaming industry. If you feel gaming should have more worth, you need GameFi.

With the invention of play to earn and move to earn, GameFi offers incentives for gaming on several platforms.

As the blockchain platform expands, GameFi continues to be one of the most trending concepts on the system.

Now you don’t come on the blockchain for fun alone, but you can also get paid for your gaming interest.

So what is GameFi, and how can you get started? In this article, we’ll walk you through the basics of this blockchain use case and what you stand to gain. 

What is GameFi?

GameFi is a blockchain concept that rewards players for their time and effort playing games, with financial incentives being the ultimate goal.

The GameFi ecosystem aims to create an environment where gamers can earn cryptocurrency by simply playing games.

It also allows developers to offer more value to their loyal fans by rewarding them for their time and efforts in-game.

How GameFi Work?

The GameFi structure uses the blockchain, cryptocurrencies, and NFTs to create a player reward system. This is mostly through in-game assets or gameplay.

In traditional gaming, in-game assets are built into the gaming environment. As such, you can’t transfer or send them to another gamer. Plus, if the server crashes for any reason, you lose your items forever.

With GameFi, all of these issues are eliminated. Players can easily move their in-game items from one game to another without worrying about losing them.

And if the servers crash, the items remain safe on the blockchain. Now you’re wondering how this is possible.

The simple answer is non-fungible tokens. Non-fungible tokens, or NFTs, are unique digital assets with their own identity within the blockchain.

They are not fungible because other similar items cannot replace. Each token represents something different and has its unique identifier. In the case of GameFi, every in-game asset is a non-fungible token.

Players can acquire these assets through gameplay and trade them on NFT marketplaces for cryptocurrency. And as we know, you can exchange cryptocurrencies into fiat currency that players can spend in real life.

How Do You Make Money on GameFi?

GameFi projects operate on Play-to-Earn or Move-to-Earn models, where you get financial incentives for playing the games.

Under this model, you can make money in different ways. First, they allow players to earn tokens by completing tasks or winning a battle.

In the case of Move-to-Earn, you receive incentives for jogging or walking. Second, they allow players to sell in-game assets like avatars, weapons, costumes, pets, etc.

It works the same way traditional games like PUBG and Fortnite work. In these Battle Royale games, you earn Battle Pass points, which you can convert into various items. These items include skins, emotes, emojis, and more.

But unlike these games, GameFi allows you to sell your inventory items to other players or even use them to buy other items.

Another way to earn through GameFi is by participating in tournaments. For example, in Axie Infinity, there’s a weekly tournament where players compete against each other to win prizes.

Lastly, you can make money on GameFi by lending your avatar to other players.

Some play-to-earn games like Axie Infinity allow you to loan your characters to other players. The original owner will receive a percentage of what the player earns.

How Much Can You Earn With GameFi?

Making between $50 and $100 daily with little training and experience is possible. However, much of it would depend on your skills and luck. There is no upper limit when it comes to earning with GameFi.

Your earnings rely on your creativity, ideas, and initial investment. GameFi NFTs occasionally sell for millions if you’re lucky and strategic enough to pull it off.

How Can I Participate in GameFi?

Numerous blockchain games are available, and they all operate in various ways. If you are interested in GameFi, you only have to select from one of the many options. 

However, beware of shady businesses and suspicious websites. Connecting your wallet or downloading games from unreliable websites might be harmful.

Use only funds you can afford to lose, and create a separate cryptocurrency wallet solely for this purpose. 

Start playing the game by following these instructions once you’re certain the game is safe:

Open a Crypto Wallet

To access the GameFi world, you need an appropriate cryptocurrency wallet, such as Trust Wallet or MetaMask.

Depending on your game, you might need to use numerous wallets or connect to different blockchain networks.

It’s also possible to play most games on the Ethereum network. Tying your Bitcoin wallet to the Ethereum blockchain is a simple way.

Some video games like Axie Infinity and Gods Unchained will create their wallet to save costs and improve speed.

Link the Wallet to the Game

To participate in a blockchain game, you must link your wallet. Ensure the website you see is the real deal, not a copy. Look for the option to connect your crypto wallet on the game’s website.

Unlike traditional online games that require creating a username and password, most blockchain games use your Bitcoin wallet.

Hence, you’ll likely be asked to sign a message on your wallet before you can join the game.

Buy the Required Playing Assets

Most GameFi projects require you first to purchase their in-game NFTs or cryptocurrency tokens to launch.

Although the requirements vary from game to game, you should always weigh the potential benefits and overall risks.

Carefully determine how long it could take before you begin to see a return on your investment.

If you don’t have any money or don’t want to take any chances, you can consider looking for a scholarship program.

NFTs can be borrowed for gaming purposes, but you must share any gains with the NFT owners.

What is a GameFi Token?

GameFi tokens are cryptocurrencies hosted on the Play to Earn platform and supported by cryptocurrencies and NFTs.

Thanks to blockchain technology, players earn GameFi tokens when they access video games on the Play to Earn platform.

GameFi tokens are one of the most difficult to get. However, purchasing them on platforms like Binance and Coinbase is possible.

How Do I Buy GameFi Tokens?

There are certain platforms on which you can buy GameFi tokens. Each of these platforms has its way of operating.

Though each platform will have unique tweaks, you can follow this general method to purchase your tokens:

Check CoinMarketCap or Crypto.com

CoinMarketCap and Crypto.com list buying options for each cryptocurrency (market pairs).

Look up the GameFi token you want on these platforms to see where you can buy them. 

Here are the lists of gaming tokens on CoinMarketCap and Crypto.com. These pages contain a complete list of GameFi tokens and where and what currencies you can use to complete the purchase. 

Make Your Purchase on Your Preferred Platform

Every platform works differently. Some platforms are easy to use, while others are not.

Generally, purchasing cryptocurrency using a fiat currency such as the US dollar will be easier than purchasing it with another coin.

To buy a GameFi token with another cryptocurrency, you must create a crypto wallet supporting the token.

Since most GameFi tokens are ERC-20, you can use Metamask or Coinbase wallets. Afterward, you’ll buy the first currency and use it to buy GameFi on your preferred platform.

Most platforms assist if you become stuck. If they don’t, try the crypto fans community on YouTube, Twitter, and other platforms for instructions.

GameFi Games Worth Knowing

There are several exciting GameFi games available to interested gamers. Players are open to over a hundred games that work with GameFi.

Below are some of the GameFi games you must know about.

Axie Infinity

Axie Infinity’s success in 2022 has been sporadic. Since its high in November 2021, the price of the in-game currency AXS has decreased. This is due to a breach in the platform’s private blockchain, Ronin, in March. 

The costs of in-game NFTs and items have also been reduced since the beginning of the year.

Nevertheless, the game’s designers have been working hard to ensure the economy will endure. 

Not all of the news is bad, though. Axie NFTs may now be purchased for around $6, allowing anyone to start playing the game.

The makers of Axie Infinity, Sky Mavis, have also developed a new Origin series that features more rewards for winners.

Illuvium

Illuvium is a free-to-play fantasy role-playing game that launched its open beta in Q1 2022 and ran on the Ethereum network.

Players explore a 3D environment while capturing the mythical creatures known as Illuvials that populate it.

Though the game is free, it gets much better if you spend money and get some decent Illuvial avatars. 

ILV is the name of the in-game money. Players can win rewards by winning battles against other users or betting on how other users fare.

Hunting, capturing, and selling Illuvials is another efficient method to get money in this game.

Splinterlands

This game is for individuals who take pleasure in trading and collecting cards.

The game is the most widely used dApp on the Hive blockchain because it was created specifically for the platform. Hence, this fact should not come as a surprise.

Presently, over 527,320 different active wallets have been linked to it. It’s preferable to play Splinterlands with a strategy in mind.

Before you begin, decide whether your goals are gathering resources, enjoying yourself, or earning money. 

Within the game, there are other tournaments. The nicest aspect about Splinterlands is that you can start playing it for nothing initially. 

As you proceed, the Splintershards governance token (SPS) is used when aiming to earn within the platform.

Players are advised to spend the $10 required to access the whole game.

Decentraland

Decentraland is an open-source, realistic digital world hub with virtually limitless possibilities.

Users may buy virtual plots of land on the platform in the form of NFTs using the MANA cryptocurrency.

It also allows them to monetize those plots of land in several ways.

Decentraland is essentially the GameFi equivalent of Minecraft, where you can create marketplaces, houses, and companies while interacting with other users.

The difference is that Decentraland’s virtual land is far more valuable than Minecraft’s. A Decentraland piece of real estate sold for USD 2.4 million in 2021.

StepN

StepN, one of the hottest blockchain gaming businesses, is a Move-to-Earn platform that rewards users for exercising.

You’ll need a pair of Sneakers (an NFT), which start at 13.95 SOL (about $689), to start earning. As a result, there is a high pricing barrier to entry. 

It’s even more challenging because a user needs to own a few pairs of Sneakers to earn real money. StepN plans to add a leasing option to the site shortly.

This integration will allow players to rent Sneakers from other users and split the money.

Conclusion

So, here’s a little recap of what GameFi is. GameFi —also called play-to-earn or move-to-earn—is simply a combination of Gaming and Finance, which describes blockchain games that offer economic incentives to their players.

The segment has grown fast, especially as it provides the perfect entry window into crypto for gamers worldwide. 

It’s a point to note, however, that most GameFi platforms don’t offer as much thrill as traditional games in terms of gameplay.

It might take some time before we see a fully immersive GameFi game.