The video gaming industry has witnessed dramatic progress over the years. From monochromatic lines to 2D shapes to 3D gaming spaces, we have seen various stages of the gaming industry. Now, thanks to blockchain technology, a new era of GameFi has been introduced to the gaming industry.
GameFi is one of the most revolutionizing ventures of blockchain applications. While conventional gaming is limited to providing entertainment to users, GameFi allows players to monetize their game time and skills. Based on the Blockchain Game Alliance Q1 2022 report published by DappRadar, the blockchain gaming industry has witnessed growth of over 2,000% in the past year. The rapid development of this new gaming model is transforming traditional gaming at a fundamental level.
GameFi is a combination of gaming and finance. It refers to an entire ecosystem of blockchain-based games that allow players to earn economic incentives for playing games. The virtual gaming environment in GameFi is built using blockchain applications such as cryptocurrencies, NFTs, and decentralized finance.
In blockchain-based games, players need to complete tasks, battle other players or monsters inside the game, and progress to higher game levels to earn in-game rewards. GameFi combines DeFi with traditional gaming, which makes it possible for players to exchange their in-game rewards with real-world value and trade their in-game assets on crypto exchanges and NFT marketplaces to earn income.
The process of earning rewards and the type of rewards in GameFi differs from game to game. Most of the blockchain-based games work on the P2E (Play-to-Earn) model. Battling and defeating monsters and reaching higher game levels will help players earn rewards in most of the games. However, a few other projects allow players to build a monetized structure on virtual land or rent their virtual property to earn rewards.
Users can earn different types of rewards such as native crypto tokens and NFTs. NFTs can represent anything inside the game such as virtual lands, avatars, weapons, costumes, etc. It depends on an individual gaming project and its economy. In some cases, the NFT assets in GameFi run on blockchain technology and players can exchange or sell them on any NFT marketplace. In other games, in-game assets need to be converted into an NFT before players can trade or sell them.
For the longest time known, the gaming industry was simply known for providing entertainment. Though some traditional games allowed users to earn rewards, they did not have any real-world value. Today, with the help of blockchain technology and cryptocurrencies, players can earn rewards inside games and exchange them for real-world money.
Players can buy, sell, or exchange in-game assets in GameFi projects, which is impossible in the traditional gaming industry. GameFi combines DeFi, NFT, and blockchain-based gaming markets. As a result, the new gaming ecosystem is more efficient, and transparent, and solves major issues in the traditional gaming industry. The captivating gaming experience along with an opportunity to make a living are elevating blockchain-based games to a whole new level.
The metaverse elements combined with GameFi are providing an immersive virtual world environment for players. With the help of governance tokens, players can play a part in the upgrades and improvements of the platform through token voting. Some blockchain-based games also enable players to conduct their own battles and modify and optimize existing versions of games.
In chain games, there is no central authority or unified operation center. Chain games are jointly operated by developers and gamers, which results in a better gaming experience and improved security. Another major difference between blockchain-based games and traditional games is the ownership of in-game assets. In conventional games, players do not actually have ownership of their in-game assets. But blockchain technology allows players to have digital ownership of their in-game assets and NFTs. Thus, players can own various kinds of assets like virtual lands, avatars, and weapons in blockchain-based games.
GameFi is often referred to as the future of gaming, considering its rapid development and the huge adoption of blockchain-based games by gaming enthusiasts. Traditional gamers are turning to blockchain-based gaming because of its attractive features like generating income and owning in-game assets. With more technological advancements in blockchain technology, numerous innovative blockchain-based gaming projects are springing up every day in the crypto world.
According to a report published by DappRadar, blockchain-based games attracted over 2 million players in the first week of 2022. This implies a large-scale adoption of GameFi projects. GameFi could very well become the future of gaming.
