GAME-FINANCE (The future of gaming)-by@mondraye

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INTRODUCTION

Since the rise of Axie Infinity, GameFi has been swiftly engulfing the traditional gaming business. It appeals to gamers by providing them with the possibility to earn money while having fun.

WHAT IS Game FINANCE

_GameFi

The terms "game" and "finance" are combined to form GameFi. It's a term used to describe blockchain games where players can earn money by playing. The GameFi ecosystem creates a virtual gaming environment by combining cryptocurrency, non-fungible tokens (NFTs), and blockchain technology.

Players can usually earn in-game rewards by fulfilling chores, fighting other players, and progressing through the various game levels. They can also trade their assets on cryptocurrency exchanges and NFT marketplaces outside of the game.

WORKING PRINCIPLES OF GameFI

The reward in GameFi can take several forms, including bitcoins or in-game assets such as virtual land, avatars, weapons, and costumes. Each GameFi project will use a unique game economy and model. The in-game assets are almost always NFTs that run on the blockchain and may be exchanged on NFT exchanges. In some circumstances, though, gamers must convert in-game assets into NFTs before trading or selling them.

In most cases, in-game assets will provide players with particular advantages, allowing them to earn additional rewards. However, some games have avatars and cosmetics that are merely decorative and have no bearing on gameplay or earnings.

Players can earn rewards by completing activities, fighting other players, or building commercialized constructions on their piece of land, depending on the game. Users can also earn rewards by borrowing out their gaming costumes instead of partaking in the game. Let's take a look at some of GameFi's most prevalent features.

PLAY TO EARN (P2E)

_{Play to Earn}

Play-to-earn (P2E) is an innovative gaming mode that is at the heart of all GameFi ventures. It's not the same as the pay-to-play approach used in traditional video games. Pay-to-play games require players to make an initial financial investment before they can begin playing. Video games like Call of Duty, for example, require gamers to acquire licenses or recurring subscriptions.

In most circumstances, traditional video games will not generate any financial returns for users, and the gaming firm will keep and hold their in-game assets. P2E games, on the other hand, can provide players complete control over their in-game assets while simultaneously providing them with possibilities to earn money.

Keep in mind, though, that it all depends on the GameFi projects' model and game design. Although blockchain technology has the potential (and should) to allow players complete ownership over their in-game assets, this is not always the case. Before you jump into a P2E game, be sure you know how it works and who is behind it.

Another thing to keep in mind is that while P2E games can be free to play and still earn revenue for participants, some GameFi projects require you to buy NFTs or cryptoassets before you can participate. As a result, it's critical to DYOR at all times. If you start a P2E game with a large investment and the benefits are tiny, you are more likely to lose your money.

Axie Infinity is one of the most well-known earn-to-play games. Since 2018, it's been a popular Ethereum-based NFT game. Users of Axie Infinity can earn SLP tokens by completing daily tasks and competing with other players on the platform.

If they hit a particular PvP rank, they can also get AXS awards. AXS and SLP can also be used to breed young Axies, which can then be used in-game or sold on the official NFT marketplace.

Aside from purchasing and selling Axies, players can also lend their Axies to other players, allowing them to earn money without having to play the game. Scholarship is a term for this type of loan. Scholars can play games and receive rewards with the borrowed Axies.

To put it another way, Axie owners can earn money passively while scholars can enjoy the game for free. Scholars and Axies owners share the prizes achieved.

OWNERSHIP OF DIGITAL ASSETS

_{Ownership of Digital assets}

As previously stated, blockchain technology allows players to possess digital assets, allowing them to monetise their in-game assets in a variety of ways.

Players can own avatars, pets, houses, weapons, equipment, and much more, just like in video games. These assets, on the other hand, can be issued or produced as NFTs in the GameFi blockchain (also known as NFT minting). This gives players complete control over their goods, as well as ensuring authenticity and provable ownership.

Land ownership is a prominent theme in certain popular metaverse games like Decentraland and The Sandbox. They give players the opportunity to profit from their virtual land. In The Sandbox, players can buy and build digital real estate to make money. They can, for example, charge visitors to their land, earn token incentives for hosting content and events, or rent their personalized land to other players.

DECENTRALIZED APPLICATIONS

_{Decentralized Applications}

Staking, liquidity mining, and yield farming are all DeFi products and features offered by several GameFi ventures. Players can usually use their in-game tokens to earn awards, unlock unique products, or get access to new gaming levels by staking them.

Adding DeFi components to crypto games can also help it become more decentralized. Unlike typical game studios, which have centralized control over game updates, some GameFi projects involve the community in the decision-making process. Through decentralized independent organizations, they can propose and vote on future upgrades (DAOs).

Decentraland players, for example, can lock their governance tokens (MANA) in the DAO and vote on in-game and organizational policies. Their voting strength increases as they lock more tokens. This lets gamers to directly contact with game developers and have a say in how the game is developed.

VIDEO GAMES and GameFI

Players of traditional video games can also earn in-game currency and collect digital things to enhance their avatars. These tokens and objects, on the other hand, cannot (or should not) be traded outside of the game. The majority of the time, they don't have any worth outside of the game. Even if they do, users are rarely allowed to commercialize or exchange their virtual goods in the real world.

The in-game tokens and assets in blockchain games are mainly cryptocurrencies and NFTs. Some blockchain games use virtual tokens rather than crypto or NFTs, although players should be able to convert their in-game assets to NFTs if they want to. This means that gamers can deposit their winnings into crypto wallets and trade them on crypto exchanges or NFT markets. They can also convert their cryptocurrency winnings into fiat currency.

CONCLUSION

It's clear to see how GameFi entices gamers by combining enjoyment with monetary incentives. With the growing popularity of blockchain games, we can expect a greater number of large corporations to invest in the metaverse.