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gamefi meaning article metaschool web3 glossary

What is GameFi ๐Ÿ“–

GameFi is a meshing together of gaming and blockchain-powered financialization.

Blockchain-based games that allow their players to receive real-world, tradable financial benefits come under the banner of GameFi. It allows players to get access to secure ownership, and privacy and eliminates the central authority.

The term itself was first used in 2019 by the founder of MixMarvel, which is a blockchain game publishing platform. However, its conceptual origins can be traced as far back as the creation of Bitcoin in 2008.

Evolution of GameFi projects

In 2017, a blockchain-based game called Cryptokittes got released which marked the beginning of GameFi in crypto. 

This was a proper category GameFi game. The first-ever blockchain game dates back to 2014. It was named Huntercoin and was more of an experiment to gauge how well blockchains can handle a virtual game.

As far as Cryptokitties is concerned, the game is structured around virtual cats, serving as NFTs, which you can create to sell, buy, and trade. 

One of its kind, this game comes under the genre of pet games. Such games gatecrashed at a time when NFTs were quite a niche category. 

While the decrease in the popularity of NFTs did affect GameFi, the success of DeFi further boosted the category.

However, it was not until 2021 that GameFi really took up and saw unprecedented success. Axie Infinity is a great example of a such a game. Loosely based on a creature called Axie, in this game you can breed Axies and then battle them as well.ย 

In simpler terms, GameFi is focused on two broad concepts – BUIDLing and trading. With these two terms, it also serves the purpose of an interesting game and trading platform.

How does it work? Play-To-Earn (P2E)

GameFi works on the Play-To-Earn (P2E) model as opposed to the Pay-To-Play (P2P) model, which is more commonly adopted by traditional video games.

In traditional games players can’t generate any assets for themselves and their in-game assets are of no use in the real world.

Enter GameFi. It plays a revolutionary role with its P2E mode and gives players full control over their in-game assets that they can trade to make money.

So that next time you play a game, you earn some money as well.

It works on blockchain and is managed + governed by the community. Even players can participate in the decision-making of a project. So far it only uses Ethereum-based ERC-2O tokens which can be purchased using ETH, BTC and USDT (Tether).

Many GameFi projects provide financial services (DeFi) like staking, liquidity mining, and yield farming as well.

Prerequisites of GameFi

  1. Create a crypto wallet like MetaMask
  2. Connect your wallet to the game
  3. Check the requirements to play a particular game i.e. you may need to purchase tokens or in-game NFTs depending from game to game.

1) Axie Infinity: a digital pet community in which you buy creatures called Axies. Axies can be battled, collected, and even used to earn cryptocurrencies with real value.

2) Decentraland: a decentralized virtual reality platform powered by the Ethereum blockchain where you can buy and sell land, estates, avatar wearables and names.

3) Forest Knight: a turn-based strategy mobile game that allows players to build their dream team and collect NFTs based in the Forest Knight Realm. The rarer the NFTs are, the higher their value.

Given the success of Axie Infinity and other such platforms running on different blockchain protocols, GameFi is a welcome addition to the gaming industry.ย 

What is a GameFi collection?

GameFi collection, like any other collection, means owning everything related to gaming finance. These are NFTs that are part of the gaming ecosystem. They may range from in-game characters and rewards to weapons and even virtual land.

Since NFTs are unique and have distinct characteristics, different users can have varying NFTs. Take the famous Axie Infinity game, for example. In the game, the users and the players can own different Axies, each with a different outlook, appearance, and characteristics. 

GameFi is a great way to start with NFTs. By playing games and investing your time in them, you get a better understanding of the ecosystem. You learn why some NFTs are so sought-after and their sheer importance. 

Ever since the popularity of GameFi, some of its projects have even gone on to make millions of dollars. The Ethereum-based DeRace, for example, is one of the best category projects worth $17.87 until September 2022.

How can I have a GameFi collection?

GameFi collection BUIDLing requires you to DYOR. However, we have categorized a few ways that could enable you to start your collection journey.ย 

Now, two things are important here: 

  1. You can either be a game freak and be overly involved in the communities, the different GameFi projects, and various GameFi collection tokens 
  2. Or you can have fairly good knowledge of buying cryptocurrency and can consequently buy the different tokens. 

If you are the latter, you may start with the following steps:

  1. Choose the GameFi project of your choice
  2. Most GameFi projects like the players and users to have bought their cryptocurrency in order to get access to the different NFTs that they have
  3. Once a part of the circle, you can study the available NFTs more closely, choose the NFT of your liking, either buy it using cryptocurrency or participate in NFT auctions.
  4. Once acquired a number of GameFi collection tokens, you can keep in touch with the different communities and sell and trade your tokens.