Game Finance (GameFi): What's So Attractive About It?

Gaming finance, or GameFi, is an emerging category that aims to merge the colourful gaming sphere with the revolutionary opportunities of blockchain. 

Combining gaming and decentralised finance (DeFi) always sounded intriguing and potentially game changing. GameFi, named after the fusion of gaming with DeFi, has captured the attention of many gamers to date due to its promise to reward creators and allow full ownership of their assets.  

Per a report by 360 Market Updates, the GameFi market was worth over $11,4 million in 2022 and is expected to grow to $48,8 million by 2031 with a CAGR of 27.33%. The new blockchain-based gaming model has become a significant player in the Web3 economy due to its massive potential to reward gamers like never before.  

What is GameFi?  

GameFi is a term that combines gaming finance and is a relatively new type of decentralised application that integrates the gaming and financial worlds into a new kind of decentralised application. This emergent category aims to merge the colourful gaming sphere with the revolutionary possibilities of blockchain. Thus, GameFi improves the game’s interactivity and offers the players a chance to earn money and initiate the transition to the gaming economy, turning entertainment into monetisation.

Game Finance (GameFi) combines online gaming and decentralised finance (DeFi). GameFi’s play-to-earn nature enables games to earn virtual assets and rare items through in-game activities. Before GameFi, gaming assets remained under the control of centralised gaming platforms, so players did not have full ownership over their assets. GameFi gives the players sole ownership of assets and the opportunity to earn assets such as cryptocurrencies and non-fungible tokens (NFTs).

How Does GameFi Work?  

At the core of GameFi is blockchain technology, which underpins the games and the in-game economies through tokens. Several key elements can be considered the foundation of GameFi, regardless of the details of the project. Smart contracts are central to this process, creating a decentralised environment that alters the existing paradigms in gaming. To get started on a play-to-earn (P2E) GameFi game, you need to purchase tokens or NFTs. As you play and complete rewarding in-game tasks, you earn tokens to sell for a profit.  

Integrating decentralised finance, non-fungible tokens, and play-to-earn models is key to realising the concept of GameFi. All these elements help build a strong foundation that helps create a more engaging and financially rewarding gaming environment. Here is what each of them represents:

○ Decentralised Finance (DeFi): DeFi supports the GameFi economy by facilitating tokens, NFTs, etc.  

○ Non-Fungible Tokens(NFTs): NFTs are assets through which players earn in-game assets such as avatars, costumes, weapons, land, and other collectables.  

○ Play-to-Earn Model (P2E): The P2E model encourages players to participate in online gaming by rewarding them through tokens or collectables. 

GameFi Advantages vs. Disadvantages

Six of the Best GameFi Projects on BitDelta

Explore six leading GameFi projects available on BitDelta, each offering unique gaming experiences and financial opportunities.

1. The Sandbox (SAND/USDT)  

The Sandbox allows players to immerse in a vast space where they can build, own, and sell gaming experiences on the Ethereum blockchain. It is an online game that can be played without charge, and players solve puzzles to advance to the next level. The first game, The Sandbox (2011), and the second, The Sandbox Evolution (2016), have over 40 million downloads on iOS and Android.

2. Axie Infinity (AXS/USDT)  

Created by the Vietnamese-based Sky Mavis, Axie Infinity offers players a colourful world of cute and robust characters called Axies. The blockchain-powered game enables players to fight, breed, collect, and profit from trading Axies in the marketplace.  

3. Decentraland (MANA/USDT)  

Decentraland provides an online virtual reality game where players can invest in and develop virtual real estate. The game goes beyond land purchases, allowing designers to create and sell different types of apparel and accessories for avatars.

4. Aavegotchi (GHST/USDT)

Aavegotchi is a GameFi platform owned by the community that encompasses the ability to develop games, tools, and services and manage the governance within the AavegotchiDAO.  

5. Race Kingdom (ATOZ/USDT)

Race Kingdom is set to launch a next-gen metaverse racing game that allows users to race using ultra-rare NFT assets. It is an exciting blockchain-based game and business model with an economic engine to allow players to earn $ATOZ crypto token.

6. My Neighbor Alice (ALICE/USDT)

My Neighbor Alice is an attractive multiplayer builder game where players can build virtual plots, communicate with neighbours and do various daily activities. The game is entertaining and adventurous and empowers gamers to earn while playing.

Bottom Line

Opportunities in GameFi go beyond traditional gaming. Blockchain and decentralised finance (DeFi) propound a new economic paradigm in gaming, where players are not only passive consumers but also holders of monetary stakes in their gaming endeavours. This model has shifted the gaming concept and incorporated a form of investment into the equation.  

As we look forward, GameFi is expected to grow into an inclusive, players-centred model that will attract more traditional gamers every time by blending their earning potential with the thrill of gaming, transforming how we see and play games.

Frequently Asked Questions (FAQs) 

1. What is GameFi?  

GameFi is the fusion of online gaming and DeFi, where players can play to earn assets such as cryptocurrencies and NFTs.  

2. How is GameFi different from traditional online gaming?  

While traditional online gaming is centralised, GameFi is decentralised, giving players sole ownership. Besides, many conventional games work on the pay-to-earn model, while GameFi is based on the play-to-earn model.  

3. What are the main components of GameFi?  

GameFi has three main components: DeFi, NFTs, and P2E. DeFi supports the GameFi economy by facilitating in-game tokens and NFTs.

4. What are the pros of GameFi?  

GameFi allows players to earn by playing games, completing in-game tasks, or trading NFTs.  

5. What are the cons of GameFi?  

GameFi is challenging for players new to blockchain technology. Due to the volatility of cryptocurrencies, gamers risk losing their assets’ value. 

6. What are the best GameFi tokens to trade on BitDelta?  

The best GameFi tokens to trade on BitDelta are the Sandbox (SAND/USDT), Axie Infinity (AXS/USDT), Decentraland (MANA/USDT), Aavegotchi (GHST/USDT) and Race Kingdom (ATOZ/USDT).