The world of gaming and finance has started to merge in ways that seemed impossible just a few years ago.
People would be hard-pressed to find two industries that are moving faster than these and there have been a lot of people predicting change in the world of games as currencies evolve: Enter GameFi, a term that blends gaming and decentralized finance (DeFi). This emerging field is reshaping how people interact with games but what exactly is GameFi, and why has it caught the attention of so many in both the gaming and crypto communities and blogs all over the world?
People may have already heard of DeFi, decentralized finance in forms such as blockchain or other types of finances – this is becoming far more common and normal in the modern age.
DeFi Revolutionizes Gaming
Modern and secure payment methods are already becoming a big part of gambling due to the fact that cryptocurrencies have proven to be more secure and give customers a level of anonymity that they may not get with other payment methods.
Crypto’s influence on gaming can be seen most effectively in the casino and gambling industries as people are looking to play in a way that doesn’t involve drawn-out processes. Often, they also don’t really want to have to share so many details with people so the option to make transfers using a crypto wallet has its advantages. Bitcoin gambling enables people to transfer funds quickly as the process is usually almost instant. Additionally, there are some ways that the process can be different as a result – people don’t have to put in details for a bank to check or approve when making this kind of payment. The whole point of DeFi is to take control away from these sorts of middlemen and organizations.
Gambling sites tend to have a lot more options than ever before and this may include payment options and protections for customers – the methods of handling finances are even potentially inspiring more ways people are choosing to play. Crash games have gone on to become one of the most popular forms of modern games on some casino sites and they tend to be played on crypto casinos rather than other options.
https://www.instagram.com/reel/C7C0_5lR8Zg/
How Does GameFi Work?
Another step on this journey to DeFi being a big part of games is the GameFi industry and people may already know that the driving force behind GameFi is blockchain technology. Through decentralized networks, players own their in-game assets, which are often represented by NFTs. These NFTs could be anything from tools and armor in a fantasy game to digital pets or even specific characters (some of which can be trained). Because these items are stored on a blockchain they are totally unique and may form their own little trading industry within the game. Players can sell their assets on decentralized marketplaces or even transfer them to other games.
Some big figures in the games industry are making moves in this way, even the founder and developer behind viral sensation Flappy Birds is now entering the GameFi industry.
One of the key distinctions of GameFi is the token economy. Many GameFi platforms have their native tokens, which serve multiple purposes. Players can use them for in-game purchases or stake them to try to gain rewards – these are just examples and each game has its own way of doing things. On top of that, these tokens may potentially be traded on cryptocurrency exchanges, converting them into other currencies or even real money.
Gaming giants may have already entered the field, too. Nvidia has certainly shown a willingness to work with crypto and DeFi over the years including a new partnership with Alibaba, and this could extend to GameFi systems in the future from the company that recently became the world’s most valuable.
P2E Games and Their Impact
P2E games or play-to-earn are another way to do things and this is an industry that is moving quickly – some think that the concept of play-to-earn (P2E) is the biggest game-changer within GameFi. In traditional gaming models, players invest both time and money into a game, with the rewards typically being limited to in-game achievements or bragging rights. P2E might let players monetize their gaming activities through tokens and currencies (though it depends on the currency itself).
Lots of these games allow people to earn cryptocurrency or NFTs by completing tasks or even participating in tournaments – some also make use of mechanics like farming as the way to issue the tokens. These rewards can be accumulated and exchanged for fiat currency or traded for other digital assets.
Any success of the P2E model depends heavily on the game's economy and token value. If the token’s value drops, the rewards might not be as attractive and the games don’t tend to use the most mainstream cryptocurrencies. This dynamic introduces some risks, as players need to stay informed about market conditions that could affect the value of their in-game earnings.
