GameFi is among the hottest innovations within the gaming and cryptocurrency spaces currently. As a concept, GameFi reflects the union of two industries and ideas – new crypto developments, particularly DeFi, and the need for gamers to earn rewards for the time and effort spent gaming.
Thanks to GameFi, gamers can now trade in-game items, lend out their winnings and even borrow crypto against them, something almost unheard of in traditional gaming.
But as this innovation gains traction, crypto enthusiasts and gamers cannot help but wonder whether GameFi will revolutionize gaming or fade into obsolescence as quickly as it rose.
What is GameFi?
Also known as play-to-earn, GameFi is a hybrid of gaming and DeFi (Decentralized Finance). DeFi is an umbrella term for token-based transactions such as paying, borrowing, and lending on decentralized digital ledgers, i.e., blockchains.
DeFi relies on smart contracts to offer many financial applications that do not rely on intermediaries like banks, brokerages and exchanges.
At a basic level, GameFi involves Dapps (decentralized applications) with in-app monetary incentives paid as rewards for completing tasks such as growing digital crops, winning battles, solving puzzles and mining precious digital resources.
In some GameFi apps, e.g., Alien Worlds, players can earn passive income by letting others use their digital assets, e.g., mining on their virtual lands.
How to Play Gamefi Games
While specific starter requirements differ by GameFi title, most games require players to possess a compatible crypto wallet and purchase a few in-game items to participate.
1. Create A Crypto Wallet
A wallet is a must-have item for virtually all cryptocurrency-related activities: after all, how else would you store your crypto and NFTs? That said, there are multiple kinds of wallets compatible with different crypto ecosystems.
Before creating a crypto wallet, check whether it is compatible with your preferred games. For instance, games built using Ethereum’s protocol (like Axie Infinity) require Ethereum-compatible wallets like MetaMask.
2. Add Enough Funds To Your Wallet
Most GameFi games are pay-to-play, i.e., new players have to pay a specified amount of crypto to participate. Like wallets, the required cryptocurrency varies by game, and you might have to go through a few steps to get the required token.
For instance, Cryptoblades requires new players to have enough SKILL in their MetaMask wallets – SKILL is Cryptoblades’ native cryptocurrency.
However, SKILL is not available on most crypto exchanges, and you will first have to purchase BNB (Binance Coin) then convert it to SKILL.
Although funding your wallet might seem confusing at first, you will get the hang of it after watching a few tutorials and adding some coins.
3. Buy Beginner Digital Assets
While it is possible to download some GameFi games without paying upfront, you will either have limited functionality or not be able to participate at all before purchasing a basic item – often a character.
Among the most popular GameFi games, prices for beginner items might seem a bit too prohibitive.
In Axie Infinity, for instance, players have to buy Axies (blob-like monster characters) or at least three NFTs, which cost as little as $600-$700 – for comparison, BNB’s price typically ranges between $407 and $390, with an all-time high of $686.31.
And while playing GameFi games can come at a hefty upfront cost, it can be very rewarding.
What Is The Future Like For Gamefi?
For many GameFi proponents, this innovation represents a chance for gamers to take back control from traditional game makers. Ideally, GameFi games have inclusive communities of players who democratically make decisions on issues like fees and community rules.
Moreover, GameFi’s notoriety within the gaming and crypto communities is only increasing.
For instance, by December 2021, there were more than 544 blockchain games, a modest rise from 200 in 2020.
Also, in the first week of 2022 alone, the top 10 GameFi games attracted at least 2 million unique crypto wallets and handled $841 million worth of transaction volume. If the success of these games is anything to go by, GameFi has a bright future.