GameFi Explained: How Will It Evolve in The Future
Posted By : Priyansha Singh | 13-Jul-2022
Recently, GameFi has become one of the most popular and prevalent concepts in the gaming and blockchain industry. Conventional video gamers who are accustomed to playing online games are now being largely attracted by blockchain-based video games where they can be rewarded in accordance with their time and effort. Without a doubt, the blockchain gaming industry is set to disrupt the massive $175 billion video game market globally. Titles such as Axie Infinity having more than $1 billion in total in-game assets sales have subsequently piqued the interest of the conventional gaming landscape and with its success, we are now witnessing giants like Ubisoft venturing into the gaming sector.
In this blog, we will explain what GameFi actually is, what it consists of, and what is its future. So, let’s begin.
What is GameFi?
GameFi refers to the financialization of video games and in broader terms, it represents the amalgamation of video gaming and Decentralized Finance (DeFi). For this type of gaming model, next-gen technologies such as blockchain, NFTs, and 3D mechanics are leveraged which enables the construction of virtual environments where players can participate and earn money in the entire process.
Furthermore, GameFi functions on the P2E or “Play-to-Earn” model. This concept inculcates rewarding the players with financial incentives in order to play as well as grow in the gaming levels. Some games based on blockchain development solutions also allow players to earn a full-time income as they start engaging in the game.
Such online games can be seamlessly integrated with DeFi tools like loans, farming, landing pages, tools for issuing new tokens, and more. Gaming projects like these are built and launched on the robust blockchain distributed ledger. This means that all objects, assets, and tokens that players receive ultimately become their full property. In the GameFi ecosystem, everything is secure, simple, and lucrative: you just have to play and receive bonuses in accordance with your performance.
How Does GameFi Work?
As we have already mentioned, the methods and ways of generating rewards and incentives depend on your performance and game offerings. However, a majority of the GameFi projects have the following characteristics:
- Non-Fungible Tokens (NFTs)
Based on blockchain technology, NFTs are digital assets that are indivisible, unique, and have an owner, unlike fungible tokens.
As in traditional video games, users can predominantly own houses, avatars, animals, tools, and more that are represented in the form of NFTs. From there, they can efficaciously spend their resources on improving and expanding their digital assets and also trade them with others, thereby generating an extra stream of profit.
- Decentralized Finance (DeFi)
DeFi is basically an experimental form of finance that does not depends on any central financial intermediaries like banks. It rather uses smart contracts that are based on blockchain. In some of the GameFi projects, gambling is also permitted, for instance, players can block some of their tokens in order to gain and earn some interest.
How Can A Video Game Be Decentralized?
Preeminently, traditional games work in an entirely centralized way, except for a few cases. The video gaming studio is in charge of designing, developing, producing, and launching the game, as well as updating it.
In some of the GameFi projects, what is sought is actually the opposite: it seeks to involve and engage the players themselves in all the processes of decision-making. This aspect is known as Decentralized Autonomous Organization or DAO. In order to join a DAO, a player must first have a governance token. Also, the number of tokens that a player has will play a crucial role in determining the power that the player has.
Implications of GameFi
As the GameFi industry is inculcating more and more functionalities, the realm of decentralized finance and asset tokenization is swiftly gaining momentum all over the world. For instance, the BSC-based game MOBOX amalgamates yield farming with NFT collectibles along with other DeFi services.
Furthermore, blockchain games are relatively more scalable as they do not require any heavy hardware or investments to participate in the project. Users can easily participate in the project with their accessible devices such as smartphones, laptops, tablets, or PCs. This is the sole reason why GameFi furnishes more use cases for NFT and blockchain gaming space, making it extremely lucrative, engaging, and affordable.
It is mainly because of the usage of NFT in-game items that have heavily contributed to the growth, expansion, and increase in popularity of GameFi. It is no surprise that the top blockchain-based games in the market space have successfully surpassed a massive $14 billion worth of market capitalization.
Here are some of the prominent and best-known examples of GameFi projects include:
- Axie Infinity
- The Sandbox
What Can We Expect In The Future With GameFi?
In the past few months, GameFi projects have been on the radar of gamers as well as investors alike. In relation to this, the surging popularity of the metaverse and NFTs are also enabling the relaunch of an industry that already has a heavyweight traditionally.
One of the best examples to comprehend what the future of GameFi will look like is to analyze the evolution of existing blockchain and decentralized finance-based projects such as Axie Infinity. Initially, it was released at the price of €0.12 and today its projected price is nearly €125.
Also, the MetaSoccer which altogether comprises soccer competitions in the metaverse was not actually released, however, it was able to garner more than $2 million in a round of funding.
Therefore, in the coming years, we will undoubtedly witness a lot more related GameFi projects coming into existence, and technologies like blockchain, metaverse, 3D modeling, and NFTs will further fuel its increased adoption.
GameFi Development With Oodles Technologies
At Oodles Technologies, we offer end-to-end blockchain development services to businesses across all industries such as eCommerce, real estate, healthcare, banking, education, and more. As an established blockchain and NFT development company, we enable organizations to harness the power of decentralization, immutability, transparency, security, and scalability. With a team of seasoned professionals, we ensure that every project idea is converted into tangible success. If you are looking for blockchain, GameFi, metaverse, or NFT development services, feel free to drop us a line. Our experts will get back to you within 24 hours.