GameFi Introduction

GameFi is a disruptive technology that is rocking the gaming industry. However, just a handful of people understand the concept. Therefore in this article, we will answer the major question, “what is GameFi?”

We will look at the core aspects of this concept, like its relationships with other components of the blockchain industry. Also, we will see its future, how you can make money from it, and its pros and cons.

What Is GameFi?

It is a combination of Gaming and DeFi. It is the junction where blockchain elements like crypto, NFTs, and P2E (play to earn) gaming models meet. This meeting point shows up in two major ways;

• Gaming with DeFi elements.
• DeFi platforms with game-style tools.

Gaming with DeFi elements allows gamers to earn money while playing games. On the other hand, DeFi with gaming tools allows users to have fun while making financial transactions. DeFi platforms use gaming tools like challenges, rewards, avatars, badges, points, and scores.

The History of Gaming

Before now, we just had two gaming models, fee-to-play and pay-to-play. Today, we have a new gaming model called the play-to-earn model. Let’s look briefly at how the gaming industry has evolved.

Pay-to-Play Model

This gaming model started in the 70s with arcade games. The arcade games allowed users to pay before playing any game. As the name sounds, people made money by charging others for playing games. Players usually pay a small fee to enjoy rounds of gaming. The venture was very profitable to game owners.

As time went on, gaming developers started looking for better revenue models. This need was the birth of gaming consoles. So, gamers can now pay a huge one-time fee to acquire consoles and play whenever they want. Examples of these consoles were the Mario brothers and FIFA.

Later on, developers introduced subscription gaming. People will now pay a little subscription fee to access gaming platforms. Some examples of these games were World of Warcraft, Tibia, and Runescape. Furthermore, these games cane with extension packs. So, users can get in-game elements by spending a little more money to unlock premium features.

Free-to-Play Games (F2P)

This gaming model allows users to access every part of the game and premium features for free. However, the platform encourages them to buy enhancements like lives, digital currency, long playtime, etc. A very good example of this gaming model was Apple’s Angry Bird in 2008. Other examples are Temple Run, DOTA 2, Team Fortress, and Plants. With these gaming models and pay-to-play, it was almost difficult for players to earn money.

Play-to-Earn (P2E) 

This model was the beginning of GameFi. In 2017, Ethereum launched the first P2E game, CryptoKitties. After that, we saw several decentralized games launched on the blockchain network. For example, Pepe Farm, Ether Cartel, and Ether Shrimp Farm. These games provided gamers with the opportunity to earn from playing them.

However, until 2020, we did not see the P2E gaming model in the spotlight. The pandemic gave the P2E gaming model a tipping point. People locked in their homes earned rewards as digital tokens for playing games. Primarily, the publishers reward players with cryptocurrencies and NFTs for spending time playing games. Users can trade these items on third-party exchanges for fiat money. An example of these games is Axie Infinity.

How Does GameFi Work?

All games developed on blockchain technology have in-game digital currencies, a token economy, and a marketplace. Gamefi gaming platforms have no central authority controlling the game. Primarily, the games are governed and managed by the community. Therefore, every player is part of the decision-making body of the game.

Here are the features and how it works.

• It works on the blockchain’s shared ledger. So, players can track their assets and make sure that transactions are transparent.
• It rewards players with items that have value inside and outside the game. For example, cryptocurrencies and NFTs.
• The players can transfer their reward assets and even trade them for fiat money.
• Most GameFi games have inbuilt DeFi elements like staking, liquidity mining, and yield farming. So, players can earn passive income while increasing their assets in the game.

Play-To-Earn Games

Axie Infinity

Axie Infinity is a P2E NFT-based video game. The game is an online game developed by Sky Mavis studio. The platform allows users to play and get rewarded with NFTs. The game has over 2 million daily active players.

Decentraland

Decentraland is a P2E game developed by Esteban Ordano and Ariel Meilich. It is a virtual world built on the Ethereum blockchain. Players can buy plots of NFTs as plots of land using MANA. MANA is the in-game crypto, and they can sell their NFTs to other players in the game.

The Sandbox

This P2E gaming platform is a virtual metaverse. In this metaverse, players can own assets and build and use their virtual experiences. Furthermore, the platform gives users tools to create their 3D experiences. Then the users can rent out their works, sell, or exchange them for tokens. The in-game cryptocurrency of Sandbox is SAND.

Game of Silks

Silks is a metaverse horse racing game built on the blockchain. Every digital Silk Horse is an NFT replica of horses in the real world. So, whenever a breed of horse wins a race in the real world, the owner of the horse NFT in Silks will receive rewards in the game. The reward is the in-game currency STT. In addition, players can own assets like Land, Stables, and Avatars in the game. These items are tradable within the game. Lastly, players can stake their STT for passive rewards.

CryptoBlades

This game runs on the Binance Smart Chain, and Riveted Games developed it. The game rewards users with SKILL tokens for taking part in raids and defeating enemies. Also, players can bet their SKILL tokens to get more reward tokens or trade their in-game items in a marketplace.

How to Get Started With GameFi

Open a Crypto Wallet

Before storing crypto and NFTs or making transactions in GameFi, you must have a crypto wallet. There are many known wallets in the crypto ecosystem, like Binance, MetaMask, Trust Wallet, etc. However, some P2E games will demand some specific wallets. To be sure about the wallet to use, visit the platform’s real website.

Link the Wallet to the Game

While regular games require users to input passwords and usernames, the case is different for P2E games. The users are required to connect with their wallets. Furthermore, you can use any wallet or a special wallet if the platform demands that.

Fund Your Wallet

Before you can buy items in-game, you will need to fund your wallets with crypto. For example, the came can require that you buy starter items, its native currency, or characters.

What Is GameFi’s Relationship With Metaverse?

There has been a lot of emphasis on how vital the P2E gaming model is global. It is one way we can decipher the metaverse. It is a portal from which we can view the metaverse. Generally, the metaverse has a root in the gaming industry. So through GameFi, the metaverse will affect how we socialize, interact and carry out financial transactions.

What Is GameFi’s Relationship With NFTs?

NFTs are the in-game rewards that users get for participating in GameFi activities. Also, most platforms have their in-game elements like avatars, lands, and weapons as NFTS. So, through GameFi, many players can establish their ownership of digital assets. Moreover, they can trade them for money or crypto on other third-party exchanges.

What Is GameFi’s Relationship With Blockchain?

GameFi, being a combo of DeFi and gaming, runs on blockchain. Its first platform, CryptoKitties, ran on the Ethereum blockchain. So, the blockchain is the basis for most P2E games. It allows users to track their NFT ownership and enjoy the transparency of transactions.

What Is GameFi’s Relationship With DeFi?

Some platforms can also have DeFi features. For example, staking, yield farming, and liquidity mining. So, like DeFi platforms, players stake their in-game reward tokens to earn passively, access new levels and unlock special items.

Also, the DeFi elements in GameFi make the platform decentralized. It means that the people in charge of governance and decision-making are community members. So, as a player, you can vote for updates in the future via DAO. Players can participate in the voting system by staking their in-game crypto. The more they stake, the more power to vote and influence the game development.

How to Invest in GameFi?

Investing in GameFi means buying in-game digital currencies. However, its currencies are not as easy to buy as other digital currencies. They may not even be available on some exchanges. For example. Coinbase. So, here are steps to easily buy or invest.

• Go to CoinMarketCap to see where you can purchase your chosen GameFi currency. CoinMarketCap will show you their prices and how they perform in the market.
• Select the platform you would like to buy from based on the options provided by CoinMarketCap.
• Go to the platform, register, or open an account if you will need to do that. Then, go to its marketplace and buy the currency using fiat. Alternatively, you can swap other cryptos for it if you wish

How to Make Money From GameFi?

The major unique feature of P2e games is their model. These games are play-to-earn games. So, they are not like regular free-to-play games or pay-to-play games. The model allows users to buy in-game items like skins, weapons, etc. And these items have value even outside the games. Also, users can earn rewards assets that have real-world value.

These rewards are either NFTs or digital currencies. For example, lands, weapons, badge looks, in-game currencies, and avatars. You can trade your collections on third-party exchange sites and earn fiat money.

So, players can have multiple income streams by selling multiple items in one game or on different platforms. Moreover, players can stake their assets to get more tokens and trade them on third-party exchange sites.

Pros and Cons of GameFi

Pros

• It rewards players for playing games and having fun.
• It solves a major economic problem which is unemployment.
• Users can hold their in-game currencies and NFTs and sell them for higher prices later.
• It provides opportunities for multiple income streams.
• GameFi games are easy to play.
• Just anyone can make money with an internet-connected device.

Cons

• It has increased the level of Ponzi schemes on the internet.
• It has been a major route for scamming and phishing in the blockchain ecosystem.
• Some platforms still act centralized even when they claim they are decentralized. For example, they can block the tokens of players based on some misconduct.

What Is GameFi’s Future?

GameFi is gaining ground in gaming as an aspect of the blockchain and crypto niche. Currently, this niche is worth over $200 Billion. The rewards it brings into the industry while allowing gamers to have fun have gained serious traction. The ecosystem brings blockchain, DeFi, and gaming technology together. The coming together has made it and blockchain tech more interesting in the last few years.

In the future, P2E games will give gamers more power to utilize their imaginations and recreate experiences. With the combination of games and NFTs in the metaverse, people will have fun creating their in-game experiences in 3D.

As the niche keeps developing, we will see more adoption of the P2E gaming model. Now, more people and individuals are joining P2E games either by buying currencies or playing games to get rewards.

We expect massive and sustainable growth with the heavy influx of people and capital into the niche. Ultimately, it will be a world of unlimited possibilities for everyone.

Conclusion

In conclusion, the gaming industry is evolving, and we are the P2E point. In the future, people will no longer ask, “What is GameFi?” because it will be the gamers’ reality.

In the article, we have answered the major question, “what is GameFi?” Also, we have seen other intricate details of this P2E gaming model. Some of them include its relationship with metaverse, DeFi, blockchain, and NFTs.

Being able to answer fully “what is GameFi?”, and all other details will give you a headstart as a beginner. Finally, this technology is taking the gaming world by storm. So, if you are a game lover, the best time to earn from your passion is now via P2E gaming.

References

What is DeFi? A Beginner’s Guide

What is Metaverse? A Beginner’s Guide

What is NFT? A Beginner’s Guide

Where Is the Future of GameFi?

How to buy GameFi?

The post What Is GameFi? A Beginner’s Guide appeared first on Blockchain Doyen.

Introduction

‘Non-Fungible Tokens (NFTs)’ is a trending topic in the blockchain ecosystem. The concept is on the lips of many people who are part of the cryptocurrency and blockchain ecosystem. Among the crowd, some believe it to be the future of arts, while others see it as a profitable investment. However, others see NFTs as a wildfire soon going out of trend.

Although many people have these different opinions about NFTs and what they represent in the blockchain ecosystem, it will not just be what this article will focus on.

This article will focus on everything you need to know about NFTs. We will talk about what they are, the ecosystem’s future, how they are created, bought, and sold, their relationship with other aspects of the blockchain ecosystem, and so on.

What Are NFTs?

NFTs are digital representations of physical objects in the real world like music, artworks, gaming characters and collectibles, videos, etc. People can buy and sell these digital representations online using cryptocurrencies. Interestingly, the creators use the same kind of crypto-coding software for coding them.

Although NFTs did not come into the scene last year, they captured the attention of the cryptocurrency ecosystem last year (2021). Suddenly in 2021, people began to find NFTs as the best ways to purchase and sell their artworks. That year alone, the NFT market was worth $41 billion. Interestingly, the total market value for 2021 alone comes close to the total market value of fine arts globally.

Generally, NFTs exist as one-of-a-kind artworks because, in a limited run, they can be only one. In essence, the presence of an NFT creates a scarcity of that digital art. The nature of NFTs is moving against the tides of many digital creations because most of these digital creations usually have an infinite supply. Therefore, NFTs are rising in price in the digital market because they are scarce while still in high demand.

Again, NFTs are rising in price because, by nature, the original owner of an NFT is the buyer. While many people can view the artwork for free online, it belongs to just one person; the buyer. Because creators design NFTs to have one owner, they are coded with authentication. Their authentication is the owner’s ownership proof. Furthermore, the authentication gives the owners (collectors) bragging rights.

How Does an NFT Work?

NFTs work using blockchain technology, and this technology is a Distributed Ledger. The ledger is a public one for entering and recording transactions. Similarly, cryptocurrencies use this technology for operations. NFTs run on the Ethereum blockchain. However, some other blockchains support the running of NFTs. Also, unlike cryptocurrencies that are produced by mining, NFTs are created by minting.

Types of NFTs

NFTs refer to digital representations of a real-life physical object. Just like objects in our real world, there are different types of NFTs, and they are

Artworks

These NFTs are more popular in the NFT space and are majorly digital representations of real-life artworks and paintings. The most expensive NFT artwork is Beeple’s ‘The First 5000 Days.’ He sold it for $63.9 million in 2021.

Collectables

These NFTs are the first to come into the NFT space. They are mainly physical collectibles in digital forms. NFT collectibles include Pokemon cards, Curio cards, Bored Ape Yacht club, Cat Colony, Cryptopunks, and Meebits. The highest valued digital collectible is the Bored Ape.

Sports Memorabilia

These NFTs are currently the hottest in the market. Examples of these NFTs are NBA Top Shot and Lebron James Sunk Throwdown Series.

Video-Game Assets

These NFTs are video game rewards. Examples of games that reward players with NFTs are Axie Infinity, Cryprokitties, and Gods Unchained.

Virtual Land

These NFTs are virtual lands in the metaverse that people in the metaverse can develop. So, people can build virtual real estate properties and rent them out in the metaverse on their virtual land NFTs.

Memes

Memes are also NFT collections that have rocked the NFTs world. Examples of meme NFTs are the original Doge meme, Disaster Girl, Success Kid, Bad Luck Brian, and NyanCat.

Domain Names

These types are minted crypto domains on the blockchain. Examples are the BSC (Binance Smart Chain) and Ethereum. Currently, the domain extension NFT rocking the market is the ‘.eth.’

Music

This NFT category is arguably the newest in the block. Today, artists can release their albums as NFT digital representations and sell parts of the album before streaming on platforms. As a result, the buyers will get shares of the profits from the traditional album release.

Real-World Assets

These NFTs are representations of real-world physical properties. Buying the NFTs means you own a part of or the whole asset, and the NFTs are legal proof of ownership. Since NFTs have unique authentication, owners or creators cannot duplicate the ownership.

NFT Fashion

Fashion NFTs are the real deal now. Companies like Nike have their NFT sneakers representations. Also, other fashion brands like Burberry and Louis Vuitton have kimonos and sneakers for avatars in digital games.

Miscellaneous Online Items

these are other NFTs that are not in the other classes. Miscellaneous NFTs include blogs, tweets, comments, and posts. For example, Jack Dorsey’s first tweet was sold as an NFT for $2.9 million.

What Are NFTs Used For?

NFTs have become a way for content creators and artists to sell their crafts using blockchain technology. Therefore, artists and content creators do not need to rely on traditional auctioning to profit from their creativity. Furthermore, these content creators can program royalties in their NFTs so that they will receive some percentages if their owners sell to new people.

What Is OpenSea?

OpenSea is the largest NFT marketplace. It is a decentralized marketplace where NFT collectors and creators can buy and sell NFTs. In 2021 alone, the total worth of NFTs people bought and sold in the OpenSea marketplace was $3.5 billion.

Why Are NFTs So Popular?

NFTs are digital representations of a physical, real-world item. So, just like real-world items have owners, NFTs are designed to have unique owners. The nonfungibility of the assets makes them unique and impossible to duplicate. Furthermore, NFTs are stored on the blockchain with a policy ID and token numbers to establish their authenticity.

Their uniqueness accounts for why it is very popular. People who own NFTs have bragging rights and are the sole owners of these NFTs. So, with one owner worldwide, that particular NFT will be scarce, and if it is highly sought, it will be on the lips of everyone. These characteristics of NFTs make them very popular and highly sought after.

Furthermore, NFTs are becoming popular because global brands and celebrities are involved in the ecosystem. According to Stevenson, Vancouver’s digital art galleries founder: “The reason NFTs have skyrocketed in popularity is that most artists in the world, for example, Justin Bieber [who has] has his NFT– all these global celebrities are coming out with their own NFTs which are making [them] in general just more popular,”

In addition, Stevenson said, “A whole bunch of notable brands and artists are coming on board. They’re kind of pumping up the popularity of NFTs in general.”

NFT Going Mainstream

Generally, the NFTs market is growing daily. According to a forecast from research by QYReseach, the NFT marketplace may reach $7.63 billion between now and 2028. With the rate of popular artists and global fashion brands going into NFTs, the Industry may go Mainstream in the next six years.

NFTs and Cryptocurrencies

NFTs and Cryptocurrencies are like siblings. They share the same parent but are different entities. The parent, in this case, is Blockchain technology. Therefore, siblings from the same parent will share some similarities. On the other hand, they will also have some differences, the major one being fungibility.

NFTs (Non-Fungible Tokens) are not fungible, but cryptocurrencies are fungible coins and tokens. In other words, one Ether coin is equal to another Ether coin, but one NFT is not equal to another NFT. So, even though some cryptocurrencies are scarce based on limited and finite supply, NFTs have only an original copy.

Ethereum and NFTs

Ethereum is a decentralized Blockchain for building or developing decentralized applications (DApps). Most NFTs are minted on the Ethereum Blockchain, and here are the reasons why the Ethereum Blockchain supports NFT minting.

• It is easier to prove NFT ownership history on the Ethereum Blockchain.
• All products on the Ethereum Blockchain communicate with each other, making an NFT a cross-portable digital asset.
• The Ethereum Blockchain does not go down, so it means that NFTs will always be available for sale.

Penguins NFTs

The Penguins NFTs is an 8,888 NFT collection built on Web 3.0. The Penguins are a representation of compassion, empathy, and a representation of positivity. Apart from these representations, holders of the Penguin NFTs get special access to events and experiences.

Last week, people bought 60 Penguins NFTs valued at $103.21 thousand. So, the average price of one Penguin’s NFT was $1.7 thousand. In addition, 4,357 people own the entire 8,888 Penguins NFT in the ecosystem.

How to Buy NFTs

You have seen that NFTs run on the Ethereum blockchain, so buying an NFT requires you to pay with Ether. Generally, the particular blockchain on which a creator mint or sell an NFT will determine the cryptocurrency a collector pays.

Therefore, if you want to buy an NFT, here are the steps you should follow:

• Register with a cryptocurrency exchange and buy Ether.
• Open a MetaMask wallet and transfer your Ether to your wallet.
• Connect your cryptocurrency wallet to your chosen NFT marketplace, browse and select your preferred NFT and pay for it from your Ether wallet.

Best Marketplaces for Buying and Selling NFTs

Below are the top ten NFT marketplaces in the NFT ecosystem.

• OpenSea
• Axie Marketplace
• Crypto punks/Larva Labs
• NBA Top Shot Marketplace
• Variable
• SuperRare
• Foundation
• Nifty Gateway
• Mintable
• Theta Drop

Should I Buy NFTs?

This question is the big question in the mind of many people who want to get into the NFT community. As much as this question looks valid, it is not the most important. The most important question is, “why should I buy or why should I not buy.”

Vitally, the reasons for something will give you a clue about whether or not you should go into it. Therefore in this section, we will answer why you should buy or not buy NFTs.

Firstly, one valid reason people buy NFTs is to support artists they love but are neither rich nor famous. Secondly, people buy NFTs to resell and make money from them. Thirdly, sports lovers buy NFTs as fans to support their favorite teams or stars. Lastly, people buy NFTs to make money playing video games on the blockchain.

If you feel any of the reasons listed above are worth your investment in NFTs, you should give it a shot. Otherwise, you can look for other places to spend your time and money.

How to Create an NFT

Anyone with basic Blockchain and Ethereum knowledge can create (mint) NFTs by following these simple steps:

• Select an item that belongs to you in the real world.
• Select the blockchain you want your NFT to run on.
• Set up your cryptocurrency wallet.
• Choose the NFT marketplace where you want to list your NFT.
• Upload the NFT you have created as a file on the marketplace.
• Set up the process for your sale.

What Is the Relationship Between NFT, Metaverse, and Web3?

Again, these three concepts are siblings like NFT and cryptocurrencies. They have common similarities like;

• They all have decentralization as their core.
• They run on Blockchain technology.

However, these similarities are just one aspect of their relationship. There is more; these three concepts are interwoven into each other. Let’s begin by looking at the concepts in their simple terms.

Firstly, NFTs are digital representations of real-world physical assets. Secondly, The Metaverse is a decentralized digital world that allows people to be and do what they want. People can relate, socialize, govern and own properties in this digital world. Thirdly, Web3 is an internet of the future built around decentralization. Web 3.0 is the integration of blockchain into our current Web 2.0. This integration is to make Web 3.0 a decentralized Web 2.0.

Summarily, NFTs are digital tokens of real-world assets that people can use in the metaverse; now, both the Metaverse and NFTs used as tangible in the Metaverse run on Web 3.0.

The Future of NFTs

NFTs are gaining ground, popularity, and huge traction globally. People from different sectors are getting involved globally. So the big question will be, “what does the future hold for the NFT ecosystem?”

Although we might not be able to give a sure outcome for the ecosystem in the future, we will likely have these four scenarios.

• The market will keep gaining stability slowly and steadily.
• NFTs may end up becoming gold mine assets in the virtual world.
• It will go Mainstream in the video game industry, and in-game NFTs will dominate the market.
• The market will eventually collapse, according to skeptics and critics.

Conclusion

The NFT ecosystem and everything surrounding it is a beautiful concept that people positioning themselves for the Web 3.0 future need to know. From this article, you have seen the answers to the throbbing questions around the NFT ecosystem like what NFTs are, how they work, their future, if they are worth your investment, the reason for their popularity, their effect on the environment, how to buy and create them and so on.

Getting to know these should set you on a course to know if you will be part of this ecosystem or not. Lastly, this article does not carry information on the profitable NFTs to buy, so if you have decided to get into the space after reading this article, research before buying any NFT.

References

What is Blockchain? All You Need to Know About Blockchain

What is Metaverse? All You Need to Know About Metaverse

What is Web3? All You Need to Know About Web3

Non-Fungible Tokens Explained

Non-fungible tokens (NFT)

Pudgy Penguins statistics

How to Buy Non-Fungible Tokens (NFTs)

Best NFT Marketplaces

NFTs and the Environment

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