GameFi is currently one of the hottest buzzwords in the cryptoverse, and is becoming a trend for investment and innovation all over the world. In the NFT sphere, artists can stand to find a fresh avenue for creativity and for profit.
What is GameFi?
Originating from the words “Game” and “DeFi”, GameFi defines a new model that gamifies decentralized financial systems to allow people to gain a profit from playing crypto games.
Thanks to NFTs, and the nature of them being unique, non-fungible tokens on the blockchain capable of verifying and authenticating ownership of various digital assets, a new paradigm has opened up in the gaming sphere for people around the world to earn an income.
How it began vs where it is now
Early GameFi made use of the bitcoin network, but soon found the cost of transactions and lack of speed less ideal. When Ethereum, a smart contract-enabled blockchain network emerged, crypto developers saw an opportunity to build games that could run faster, and could allow for a larger volume of players.
With Ethereum, GameFi soon found popularity. Using a play-to-earn model, Ethereum-based games were a departure from the traditional play-to-win model of centralized games. Where players in the past were spending money on in-game items only to see their money go to game developers, the play-to-earn model allows in-game tokens and assets to be traded for cryptocurrencies that can then be converted into real-world currency.
Players of GameFi projects can earn either by playing the game, or through trading in-game items such as avatars, land, costumes, weapons, gold, tokens, and pets represented as NFTs. Meaning that all the assets and items a player acquires through GameFi are stored on the blockchain, unlike in traditional models where the assets belong to the game developer. Today, many of these GameFi projects employ other Defi concepts for user benefit in-game. Concepts like staking, liquidity mining, and yield farming allow players to take out loans by collateralizing their game assets or stake in-game assets to earn interest, on top of many other perks.
What’s in it for NFT Creators?
For NFT Creators, opportunities are abound for profit to be made through gamification. As NFTs are now key in the world of Gamefi, there are plenty that can activate one’s imagination in-game, and artists are free to adapt to the worlds they so choose. Depending on the platform, project, or Metaverse, creators are afforded the chance to stretch their imagination and build skins, avatars, weapons, buildings, etc that can then be purchased and used.
The Sandbox, one of the most hyped about Metaverse games in GameFi right now, encourages creators to be part of their creator fund, an initiative for which artists and designers will be able to create, share, sell their voxels (a unit used to describe and build items in The Sandbox Metaverse) in-game and earn a profit from selling it in The Sandbox Metaverse.
MOBOX is another example of a gaming project that allows for artists to design their very own MOMO, their in-game NFT. The platform allows creators to build their own NFTs and games with interoperable capabilities.
During the height of the Covid-19 pandemic, Crypto and NFTs really provided a gateway for interaction and a convenient way to tap into a monetary resource for those in need. GameFi was quickly accelerated into the mainstream as a way for those who had been affected by the economic crisis to earn a temporary income. Games like Axie Infinity quickly took off in the Philippines, spreading in popularity throughout the rest of the globe.
Today, GameFi is revolutionizing the $150 Billion dollar gaming industry, with close to 3 Billion players around the world. More than half of the NFT market can be attributed to in-game NFTs, making it a playground for creators to exercise creativity and sovereignty over their work. As communities grow on these platforms, artists and designers can stand to leverage support and numbers when it comes to trading and auctioning their creations e.g. exclusive collectibles.
The next step in GameFi
The gaming world, along with the development of the Metaverse, is set to become part of a larger ecosystem for which creators can innovate and earn through creation. The play-to-earn model for GameFi certainly exceeds existing models of centralized games because it allows for the transfer of value in-game with the sale and exchange of NFTs. GameFi is on the rise to being the biggest driver for bringing crypto and blockchain to mass adoption. With public interest growing around its capabilities, players, along with NFT creators, all stand to gain a profit by jumping on board.