GameFi Games Explained: How Playing is Becoming a Paycheck

As technology advances, the demarcation between gaming and finance is becoming increasingly blurred. This has also led to the rise of what is known as GameFi, or the fusion of “gaming” and “finance.”

And as a departure from traditional video games where players invest their money and time with no or minimal financial returns, GameFi brings in a new dynamic known as play-to-earn (P2E). These games rely on blockchain technology and enable players to earn real-world rewards, mostly in the form of digital currencies or non-fungible tokens (NFTs) from participating in games.

Understanding GameFi

When you hear the term GameFi, it refers to the decentralized gaming platforms that integrate blockchain features such as token economies, smart contracts, and digital asset ownership. They take advantage of the Decentralized Finance (DeFi) principles to offer players the opportunity to earn and transact in assets with real-world value.

While centralized games are controlled by one company, the majority of GameFi platforms are operated by decentralized autonomous organizations (DAOs). This means there is more power in the hands of players.

Ways in which players earn

GameFi games introduce several earning models:

·   Play-to-Earn (P2E): players gain rewards in the form of native tokens after completing quests, upgrading characters, or battling opponents. These tokens can, most of the time, be exchanged for digital currencies like Ethereum or even cashed out as fiat money.

·   NFT trading: In-game items including weapons, avatars, or land are usually minted as NFT. Players can buy, sell, or lease their NFTs on open marketplaces.

·   Staking and yield farming: Players can lock their NFTs or tokens in smart contracts connected to the games. As a result, they can earn passive income.

·   Tournaments and guilds: Competitive players can enter into tournaments with real crypto prizes. They could also join guilds that put together resources and share the gains.

You can check Flipper, a leading decentralized exchange to enjoy freedom when trading your crypto assets earned from GameFi games.

Popular GameFi games

There are several popular GameFi games including:

·   Axie Infinity:  This is one of the pioneers in P2E and players battle, breed, and trade NFT creatures known as Axies.

·   Gods Unchained: It is a strategy-based card game in which players own cards like NFTs and can trade or sell them.

·   The Sandbox: It is a virtual world where users create, acquire ownership, and monetize gaming experiences.

Besides attracting gamers, these games also attract developers and investors who have an interest in the expanding Web3 ecosystem.

Downsides and risks related to GameFi games:

As much as they have attracted so much buzz around them, GameFi games come with some risks, including:

·   Volatility: The value of the tokens earned from the games can fluctuate dramatically affecting earnings.

·   Rug pulls and scams: some GameFi projects may have poor designs or weak architecture or are intentionally deceptive, which could make players lose their funds.

·   Regulation: GameFi platforms could encounter legal challenges as governments explore crypto regulations.

Because of the above risks and potential ways of losing assets or the funds players put into the GameFi games, it is vital for players to do their due diligence on these projects, grasp the tokenomics, and have secure wallets in which they can protect their assets.

The future of GameFi

As with other technologies, the GameFi ecosystem is evolving fast. With the increased adoption of Web3, developers are keen to make these games widely accessible, more engaging, and sustainable.

Given there are chances of traditional gaming platforms partnering with blockchain platforms, we could soon see AAA-quality GameFi titles. In addition, these games could have a mainstream appeal.

Without an iota of doubt, GameFi games have revolutionized gaming from just a mere hobby into a potential income stream. Although the concept is still in its inception phase, it has the possibility of creating a more participatory digital economy. This can allow people to go beyond just playing games but also have a chance to get their next paycheck from it.