GameFi refers to games built using blockchain technology.
GameFi is not only a term that covers all aspects of blockchain gaming but it is also a popular movement that is growing rapidly. DappRadar, a crypto research firm, reported that GameFi had over 800,000. These wallets were active daily in the GameFi market as of August 2022.
According to estimates, the industry has a market capital of $8 billion. This is a small number when compared to publicly traded video games companies. Activision Blizzard is one of the most well-known video game companies with a market capital of more than $56 billion.
GameFi’s market cap has risen rapidly over the past years. According to ReportLinker’s 2022 analysis, its market capital could reach $74.2 billion by 2031.
What’s GameFi?
The videogame industry has traditionally been a play-to-win or pay-to-play business. Gamers have always been both the payers and the players, whether they are buying a console at a store or sticking their quarters in an arcade machine.
Recently, many video game developers added pay walls to their games. This means that gamers have to pay more to unlock certain features in a game they have already purchased.
GameFi, on the other hand, is a play to win game where players can earn cryptocurrency by playing the game.
Jason Brink, President of Blockchain for Gala Games, says that traditional games require you to invest money and time in order to get enjoyment. However, GameFi is different because you can change the ratio of time and money to have different amounts of fun. GameFi is different because you can adjust the time-to-money ratio to have more fun span>
How much can you make?
Many games available on blockchain networks can be played for free. Can anyone who has a passion for gaming make a lot of money? It is unlikely, at least not without significant time commitment.
Although cryptocurrency tokens that GameFi developers created for the in-game economy have real value, they are generally only worth a few pennies if not a fraction of a penny. They can have greater value in a videogame ecosystem.
Jean-Paul Faraj is the head of community partnerships and community at Unstoppable Games. He is currently developing Unstoppable Games’ first game. “Even though those tokens don’t have much dollar value, they may have value compared with another game because there is a decentralized marketplace where you can trade or exchange tokens.” He also notes that you might be allowed to use tokens you have earned in one game to play in another.
Your choices in the game will also affect the amount of money that you make.
“In traditional games, every player-controlled character will have approximately the same experience.” Brink comments, “But what if you had someone who could own a city?” Or a player who owns a ship that can transport 20 players to different locations. You could make a lot of cash. Sure. Your outcome could be very different depending on your choices in the world .”
How do GameFi companies make money?
Many of the games can be played for free, so GameFi companies earn money via non-fungible tokens. These are digital identifiers that are linked to images or videos and are used to make money. GameFi NFTs are avatars you can use to create your gaming character. However, they can also serve as tools or items that you can use within the game universe.
Gala Games and other companies will make these NFTs available to the public. They can then be traded on Exchanges like OpenSea and LooksRare. Gala receives a 2.5% royalty when an NFT is purchased or sold. These NFTs can be listed on these websites for hundreds of thousands of dollar, so the royalty fees can quickly add up.
While companies don’t collect any royalty fees for NFTs, they will take a small portion of every transaction that occurs within the game.
Scams
Be cautious if you are thinking of using GameFi games for crypto. While some games may be legitimate, several GameFi developers have been accused of scamming players.
Squid, an inspired game created by Netflix’s “Squid Game”, ended in an apparent rug pulling in late 2021. Squid advertised itself as a game that could be played to earn money, but did not allow token sellers. This increased the cost of each token by a whopping $2,800. Developers made more than $3 million.
Don’t play games that require you to sell tokens, or have a small following.
Brink states that if you hear of something called GameFi, and can’t play it or see any other players, it’s likely not legitimate.
How do I get started
The majority of games on the GameFi platform are free to register for and play. All you have to do to get started is to create a password and set up an account. You might be asked to create a digital wallet to store any cryptocurrency you earn while playing the game. Your log-in information is essential to confirm that you have access to the cryptocurrency.
Although you don’t need to be an expert in gaming or cryptocurrency to start, it is helpful to read reviews about games before making a decision. You should look for games with a large user base if you are new to GameFi.
The editor and author were not involved in any of the investments mentioned at the time this article was published.