The word ‘GameFi’ is a combination of the word “gaming” and “finance” and refers to play to earn blockchain video games that combine NFTs, cryptocurrencies and gaming.
With GameFi, players have a wide range of economic incentives to continue playing and is a model that benefits both users and developers. Many game developing companies are currently developing play2earn, blockchain video games, such as the Hong Kong-based company Animoca Brands which in 2022 raised $358 million towards releasing new playtoearn gaming projects.
Another company called Forte also raised in 2022 $725 million towards developing play2earn games with economic incentives that benefit both players and developers and became a multibillion-dollar company.
These and many more major investments are flooding the metaverse Gamefi space and the mass adoption of NFT GameFi.
Axie Infinity is a typical example of a play to earn blockchain game and is very similar to the original Pokemon game. With the Pokemon game, as people walk with their phones outdoors, Pokemon characters appear on their game up. When they do, the player has to throw Poke calls at them to capture as many as possible. With the NFT Gamefi project Axie Infinity, players control different creatures called “Axies” which are NFTs, and each Axie has different attributes: Health, Morale, Skill and Speed. Health refers to the amount of damage an Axie can take before being defeated. With speed, a faster Axie can attack first and the more speed an Axie has, the less likely an Axie is going to be the victim of a critical strike. In terms of Morale, the higher the Morale of an Axie has, the higher the chances of dealing Critical Hits. Lastly, skill influences how often Axies receive critical hits from the enemies.
Axies battle each other and the outcome of every battle depends on these attributes and how each one is used.
What makes Axie Infinity a playtoearn game is the fact that the creates and the objects within the game are metaverse Gamefi NFTs and must be purchased with the game’s native Gamefi token: the Axie Infinity Shard (AXS) in order to be able to play. Gamers earn AXS Gamefi coins as they win battles and complete certain tasks in the play2earn game. Once gamers have earned several AXS Gamefi coins, they can convert them into Ethereum and then convert their Ethereum into US dollars. The money can then be transferred to their bank account and represent a useful additional income stream. In 2021, Axie Infinity players bought more than a billion dollars worth of Axie Infinity NFTs and this trend is likely to grow because the more people play, the more they earn. And the more people play, the more valuable their non fungible tokens and Gamefi crypto become due to the network effect created.
Another example of a play to earn blockchain game is Silks. This Gamefi NFT project has created NFTs that represent some actual traits and characteristics of real-world racehorses. Each Silks avatar tracks a horse’s training progress and racing results in the real world. People can easily purchase Silks NFTs on Opensea.io and only when they hold one can they participate in the Silks ecosystem. Players can acquire, trade, and interact with a wide range of the game’s NFT assets, including Silks Avatars, Silks Horses, Land, and Stables. Owners can then earn the game’s native Gamefi crypto when their horse performs well in real races. This metaverse Gamefi project also tracks each horse in the real world as it gets old enough to breed. When a horse produces an offspring in real life, the game mints a new Gamefi NFT to represent the new horse. If you hold the parent horse as an NFT, you are rewarded accordingly.
The SandBox is another example of a highly popular play to earn blockchain game. This metaverse Gamefi project was first developed as a mobile game in 2011. In 2018, the developer brought the game into the blockchain ecosystem and provided players with the opportunity to own their creations as NFTs. This incentivizes players to create their own locations and virtual games and turn each into a Gamefi NFT.
The SandBox is a 3D virtual world where players have plenty of ways to earn Gamefi crypto and Gamefi coins. Players can create NFT Gamefi assets within the game and monetize these Gamefi NFT assets. The game is made up of 166,464 parcels of land which can be purchased and the Sandbox world is made out of voxels, which are 3D pixels. The first step to participating in the game is owning LAND. Plots of LAND are a space to build games, buildings and other assets that can be turned into income. Land owners can also lease their land to other users as an added income stream. Sandbox land can be purchased either on the Sandbox’s official website or on NFT marketplaces such as Opensea.io.
Decentraland is another popular play to earn blockchain game. In that metaverse Gamefi project, players can buy and sell digital real estate, create digital art and play casino games, using cryptocurrency. When this metaverse Gamefi project first launched in 2017, parcels of digital land sold for about $20, and its native Gamefi crypto, the MANA Gamefi token, sold for $0.02. In 2021, MANA reached over $5. To play and earn in Decentraland, you need two main Gamefi crypto tokens, MANA and LAND. MANA is the transactional Gamefi coin used for buying items in the play2earn game such as LAND, clothes and collectibles. LAND are the game’s real estate lots. You can buy LAND using the Gamefi crypto MANA and build on them many things, such as stores, art galleries and casinos. For players, there are many ways to earn money with Decentraland, including buying land and reselling it when it goes up in value, work for a company within the Decentraland ecosystem and earn a salary, create and sell art, wearables and clothing. Decentraland has a fixed quantity of 90,000 properties, so their value will only go up as more people choose to invest in their land.
These are just some examples of video games leveraging the power of non fungible tokens, blockchain technology and cryptocurrencies, and no doubt, in the coming years we’ll see more similar play2earn projects emerge. Applying blockchain technology to the video game industry is a massive market opportunity and the metaverse GameFi trend and the Gamefi token trend are only going to grow further.