Blockchain games have been prominent since 2020, GameFi is growing along with the number of users that are engaging in this community. With this , a new investment opportunity emerges. Unlike traditional video games, blockchain games can trade or exchange their digital assets (NFT) using cryptocurrency for real money.
Tokens in GameFi are cryptocurrencies available on play to earn games that use blockchain technology. Every token created by blockchain companies uses an initial coin offering which is a representation of cryptocurrency to an Initial public offering (IPO). The purpose is for the investors to purchase these tokens in the market.
At the beginning of a GameFi, there is a phenomenon called “Hype-ing” where a trend is being created using various forms of advertising. Influencer marketing, social media marketing are some of the critical forms of advertising that were often utilized. In this way, the demand for the token increases along with the price.
As the token enters the market, the volatility strikes with different concerns to the players. Engaging early in a particular play to earn games is a feasible way to reach their ROI (Return of Investment) plus revenue. FOMO( Fear of missing out) occurs when players tend to initiate in the middle section of the rising trend of the market.
Numerous players have a high expectation on the price to rise in a normal cycle which does not apply to the cryptocurrencies regularly, since Gamefi has its own tokenomics. Players are often mining rather than trading in Gamefi, which is one of the factors causing the decline of the price of the token.
For the next part, there will be a demeanor and resolution to this topic. Click the link for part II
Link https://docs.google.com/document/d/1ymh5PqewFnXx-k1mdMlmlv8z0hyEh69Ykk13HD8VEKQ/edit
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