What is GameFi (Gaming + Finance)

Some few years ago, people used to play games just for entertainment. Then later on came the e-sports revolution, and people could actually become professional gamers. But even then, not everyone could get involved, not until the emergence of GameFi. Now, individuals like you and I do not just play games only for fun, but we have the ability to earn digital asset and NFTs for our efforts. This makes it entirely possible for people to even earn a living by gaming from the comfort of your home. As the technology continues to grow, there's no doubt that GameFi is the future of gaming.

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With that being said, let's now take a look at what GameFi is all about, and how you can get started today.

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What is GameFi

From the word itself, we can see that it is a combination of 2 words (Gaming +Finance). GameFi, simply refers to play to earn games powered by Blockchain and crypto technology. Players are rewarded with incentives for their gaming efforts. Rewards come in the form of cryptocurrencies and NFTs, and these rewards are often given after players are able to accomplish particular tasks in the game.

What is even more interesting about GameFi is the fact that the rewards earned (crypto assets and NFTs), can be withdrawn from the game and traded on exchanges and crypto market places. Hence, play to earn.

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How Exactly Does GameFi Work?

Well, there will be little variances depending on the project, but generally, GameFi functions as follows:

GameFi usually requires players to do some form of investment (we'll see more about this later on in the post), before they can begin playing. As I already mentioned earlier, players are rewarded for accomplishing tasks in the game. For some games, rewards could only be crypto assets and NFTs, while for other projects, even the avatars and their costumes can be converted to NFTs and traded. Some games even go as far giving certain avatars and costumes special powers and abilities, while some even to the the extent of remunerating players with Virtual land. Some games even allow players to earn passively by either staking their crypto assets, or renting out their assets to other players.

All these assets and NFTs are usually powered by the crypto Blockchain upon which the game is built. The main components of any GameFi project include;

• Play To Earn
What makes GameFi projects so powerful and popular is the ability for players to earn from gaming. With other games, it was possible to buy certain things within the game with real life money, but there was no way to earn. Players have the ability to earn crypto assets and NFTs, but as I earlier mentioned, there usually needs to be some form of initial investment.

For most projects you need to buy their coins and some NFTs before you can begin playing. For some games, the initial investment is usually big and results could come in very slowly, especially if you're not good at gaming. In some cases, players can actually lose their initial investment. That is why it is important to do proper research (DYOR) before getting involved with any project. But if you're confident in your gaming abilities, then GameFi might just be for you.

• Digital Ownership of Assets
As I already mentioned above, it is very possible for players to not only own their rewards, but they also have ownership over their avatars, avatar's costumes, etc. All these can be minted as NFTs and sold on NFT market place. I also mentioned projects who go as far as giving out virtual land as rewards. A perfect example is this is the sandbox project. Players have the ability to even develop real estate on their virtual, host events, charge visiting fee, thereby increasing the value of their virtual lands while earning at the same time. Players have full ownership over their assets.

• DeFi Applications
The integration of DeFi Applications into GameFi is another game changer. These DeFi Applications allow traders to be able to stake their earned rewards for even more passive income. It overall helps in decentralization of GameFi, unlike other forms of gaming where the developers usually have exclusive rights over decision making. With GameFi, there's a while community, and decisions can be made taking into account every Community member through voting.

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How To Get Started With GameFi

Inorder to get started with GameFi, you'll need to do the following;

• Get A Crypto Wallet
This is usually the first requirement. You'll need to get a crypto wallet. The wallet will be used to store your crypto assets and NFTs, as well as buy the initial assets the game requires you to have. You're not just getting any type of wallet, but your wallet must be compatible with the tokens and the Blockchain upon which the project runs. Therefore, if you're thinking of playing a game powered by the Ethereum Blockchain, then a Good wallet for you could be MetaMusk. Once you have your wallet set up, funding it shouldn't be complicated.

• Connect Your Wallet To The Game
This is usually the next requirement. You'll be required to head over to the project's website and connect your wallet to the game. It is very important that you verify the URL to make sure you're on the right site, as well as for the safety of your wallet.

• Check Playing Requirements
As I mentioned earlier, they'll usually be little variances depending on the project, but I can assure you that you'll need to do a purchase of some sorts to begin playing. You'll need to buy some NFTs as well as some crypto assets to begin playing. And as the game progresses, they'll be some levels where you'll need to purchase some avatar or some special form of upgrade. All these comes at a price, so it's important you check the requirements.

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An Example of a GameFi Project

Perhaps the most popular GameFi project is Axie Infinity. This project became popular in 2018, and has remained popular ever since. The project is built on the Ethereum Blockchain, and they have their own coin (Axie Infinity) which is even listed on Binance, as well as their own NFTs (Axies). Axie Infinity (AXS) has a market cap of over $8 billion.

Their games usually consist of players battling creatures to progress to next levels in the game. It is by far the biggest GameFi project ever, and players have been able to earn hundreds of thousands of dollars by playing this game.

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CONCLUSION

With the current growth of Blockchain technology as well as the metaverse, I have no doubt that this is the future of gaming. Already, there are numerous projects under development, and there already some solid ones which are already established like sandbox and decentraland. While their high initial costs could hinder people from getting in, if you're very confident in your gaming abilities, then can tell you that you should definitely look into GameFi.

Thanks for reading 👊
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