Naturally, a game that charges high fees for in-game purchases would struggle to build a sizable user base. Confronted with this issue, several cryptocurrency NFT games creators migrated away from Ethereum’s foundation layer in favor of speedier networks. Solana, Polkadot, Polygon, Wax, and BSC are among these high-capacity networks.
GameFi projects consist of several stages. Players may enhance their revenue by investing time in character development, monetizing their land assets via the development of buildings in guild of guardians that other players pay to visit, or competing in tournaments.
All data is maintained on a decentralized public blockchain, which maintains a record of who owns what. This implies that the assets in the game are owned by the players, not the creators.
As a player, you retain ownership of whatever in-game object you earn, even if a server is shut down or the gaming firm has technical difficulties. This turns crypto gaming into a legitimate source of revenue for participants while they are entertained. Some gamers even earn a living from gaming.
Additional Benefits of GameFi
There are further advantages. Decentralized Money (DeFi) is a financial technology that brings the decentralized notion of blockchain to the world of finance. Staking, liquidity mining, and yield farming are all gaining traction in GameFi initiatives. These are all additional options for users to make passive cash in-game. Players may stake their in-game assets in order to earn yearly interest and other incentives that can be used to unlock new levels or purchase extra in-game products. Simultaneously, gamers may get loans by pledging their gaming assets.
Unlike conventional game creation, when decisions are made centrally, GameFi projects may engage consumers. Certain NFT games empower players to influence future game updates by granting stakeholder voting rights to members of the GameFi DAO. As an open-source blockchain ledger, a Decentralized Autonomous Organization (DAO) is defined by a set of explicit rules. (Decentralized Autonomous Organization).
A DAO enables token holders to propose and vote on project changes, making GameFi genuinely participative. Typically, these proposals have a financial consequence, such as when members of the DAO vote to enhance the reward for doing a certain in-game activity.
To join the GameFi DAO, you must hold a project’s governance token. In most cases, your voting power is proportionate to the quantity of tokens you own.
Traditional Online NFT games vs. GameFi Games
As with many other blockchain-based trends, GameFi has started to disrupt the conventional online gaming sector. By fusing features of DeFi, NFTs, and blockchain technology, GameFi is redefining online gaming as we know it.
While GameFi projects take many shapes, the majority of successful crypto and NFT. NFT games have characteristics that distinguish them from ordinary online NFT games.
Model of Earn-While-You-Play
GameFi’s play-to-earn approach is ground-breaking. The revenue model for traditional online NFT games is based on in-app purchases, affiliate marketing, and advertising. As a player, you spend money on in-game items that assist you in winning or giving you an advantage over other players. Naturally, that money is sent straight to the game operators.
Additionally, if you’re like the majority of players who grew up playing online video NFT games such as Minecraft and Player Unknown’s Battlegrounds, you’re accustomed to highly coveted in-game coins that have no value outside of the game environment. Apart from entertainment, you receive nothing in exchange for the time and effort spent on these online NFT games.
The New Paradigm for GameFi
This is where play-to-earn cryptocurrency NFT games come into play: they enable gamers to add real-world value to their in-game purchases. Items and products used in-game are stored on a distributed public ledger, or blockchain, that is connected to a crypto network. This blockchain technology enables the trading of in-game tokens and items for cryptocurrencies and, eventually, actual cash.
To enhance their gaming experience and advance in the game, online gamers purchase items such as coins, weapons, additional lives, custom characters, outfits, avatars, and accessories directly from the game. Traditionally, gameplay involves purchasing assets from game developers’ stores, enriching the developers at the expense of the players. This can limit players’ online gaming experience, particularly those with limited financial resources. In contrast, with crypto gaming, these purchases are made using cryptocurrencies and frequently involve players trading valuable assets.
Digital ownership is permitted in standard online NFT games. However, they lack the intrinsic value and monetary value that crypto NFT games provide. You cannot swap in-game assets for money with other players. This is in stark contrast to GameFi’s decentralized operations, in which users own globally dispersed digital assets that are not restricted to game uses.
There are little to no upfront costs.
Because the majority of GameFi NFT games are available for free download and play, they are more accessible than conventional NFT games. While there are no upfront expenses, many NFT games may need you to pay in-game tokens, characters, or other stuff in order to begin.
Ownership of In-Game Assets on a Permanent Basis
GameFi participants’ assets and NFTs are permanently kept on the blockchain. This is in contrast to typical NFT games, which may be terminated at any moment, resulting in the loss of all in-game progress. All assets are owned by the game creator, and players have no influence over the gaming platform’s lifecycle. If the game creator declares bankruptcy, fans may say goodbye to the game’s future development.
Additionally, typical online NFT games lack the security afforded by blockchain-based crypto NFT games, rendering them open to assault. A hacking event might result in the complete loss of a player’s assets.
Simple gaming methods are used in GameFi projects, which makes them simple to learn and navigate. This straightforward strategy reduces the entrance barrier, resulting in significant acceptance. Players of all ages and abilities are welcome to participate.
The Future of NFT games
Although GameFi’s origins may be traced back to the early days of cryptocurrency creation, it is just now gaining broad use. An often-mentioned example demonstrating the rise of this exciting new trend is Axie Infinity’s huge success. In August 2021, the popular GameFi project became the first to achieve $1 billion in token sales, with over a million daily active users.
Crypto gaming’s ever-evolving technology has reached to the point where new GameFi initiatives are drawing massive fan audiences and institutional backing. Crypto gaming, according to industry analysts, is the most probable vehicle for mainstream acceptance and application of blockchain technology. As GameFi initiatives gain traction among conventional gamers, knowledge with cryptocurrency is certain to increase.
As could be expected, GameFi is gaining a greater share of the expanding $175 billion gaming business. Video gamers have long benefited from and become used to the notions of in-game currency, rare digital commodities, and tokenization, all of which are free of monetary value. Without a doubt, GameFi initiatives that include all of these components while also directly empowering consumers monetarily will have a stronger appeal.
For GameFi, these are exciting times. The Blockchain Gaming Alliance, an organization formed to raise awareness of GameFi, is comprised of leading industry stakeholders, including game companies Ubisoft and MOBOX, as well as semiconductor manufacturer AMD. BGA promises to advance the cause of crypto gaming by offering infrastructure for game production and forums for developers and players to network, create, and exchange expertise, as well as by developing common standards.