What is GameFi?
The terms blockchain gaming and Web3 gaming are often used as synonyms since in both cases decentralization is a key aspect. You’ve also probably heard “GameFi” being tossed around. The term has seen a lot of usage in recent years, but what does it really mean? Is GameFi necessarily part of Web3 or the world of blockchain gaming? Let’s find out.
What is GameFi?
To kick things off, what stands behind GameFi? It is a term that combines “gaming” and “DeFi” (Decentralized Finance). It refers to the intersection of blockchain-based gaming and decentralized finance applications. In the context of GameFi, blockchain technology is used to create in-game assets, tokens, and economies that players can trade, earn, and use both inside and outside of the game environment (by selling them on a marketplace). GameFi projects often incorporate play-to-earn mechanics, where players can earn cryptocurrencies or other rewards by participating in the game, making it a potential source of income.
The GameFi sector is a rapidly evolving space that leverages the principles of decentralized finance to innovate and disrupt the traditional gaming industry. It’s safe to say that GameFi has some exciting ideas. But how exactly does it achieve all of the above?
How does GameFi work?
GameFi revolves around enabling players to earn token rewards and assets for their gaming achievements and skills. This concept has given rise to a subset of games known as play-to-earn games, where players can receive various rewards like cryptocurrencies and in-game assets such as virtual land, avatars, weapons, and costumes. These in-game assets are usually in the form of non-fungible tokens (NFTs) that operate on the blockchain, allowing players to trade them on NFT marketplaces. Each project in the GameFi space has its unique model and economy, making the gaming experience diverse and engaging for players.
In GameFi, certain assets offer visual enhancements without impacting gameplay or earnings, while others provide lucrative opportunities for players. Earnings can stem from mission completion, PvP combat, or creating monetized structures on owned land, varying by the type of game. Additionally, some games present passive income avenues through activities like staking or lending gaming assets to fellow players.
Aside from play-to-earn, we’ve also seen the rise of alternative (arguably better) models such as play-and-earn. Unlike play-to-earn where gamers usually need to make an initial investment in a digital asset in order to play, play-and-earn games opt for a free-to-play model. The main focus in these titles is the gameplay, while the earning potential takes a backseat. This raises the question.
Are All Blockchain Games Part of GameFi?
The short answer? Yes and no. If you asked the same question a couple of years ago, you’d have probably received an astounding “YES”. Nowadays, things are different. Not all games incorporate DeFi elements or their own token economy. Instead, some choose to focus on gameplay and earning mechanisms tied to player skill and tournaments, which brings them closer to the traditional esports scene. The tournament scene means that earning is tied to participation in events and not just by interacting with digital assets on the blockchain.
Then there are also Web 2.5 games that use blockchain technology but don’t necessarily have an earning mechanism tied to them. They’re often seen as the stepping stones between Web 2 and Web 3, offering users a more intuitive gaming experience.
What are the benefits of GameFi?
GameFi presents a range of advantages and opportunities for various stakeholders, including players, developers, investors, and the broader blockchain industry.
- True Ownership: GameFi grants players complete ownership and control over their in-game assets, a stark contrast to traditional in-app purchases. This ownership fosters a more immersive gaming experience, empowering players with genuine influence over their items.
- Earn: GameFi enables players to earn passive income by engaging in DeFi protocols like liquidity pools and yield farming, generating dividends and fees. Additionally, players can access secondary markets to sell their NFT-based in-game items. This contrasts sharply with conventional gaming, where players spend money on in-game items without any earning potential, making GameFi a sustainable and profitable venture.
- Innovation: GameFi represents a pioneering fusion of gaming and decentralized finance, showcasing the broader applications of blockchain technology. By introducing innovative uses for blockchain, GameFi diversifies the ecosystem and creates new opportunities for investors and players. This innovation fosters growth and development within the blockchain industry, extending its potential beyond cryptocurrencies.
GameFi emerges as a captivating genre of decentralized applications, blending traditional gaming with decentralized finance concepts. It showcases the diverse applications of blockchain technology, extending far beyond digital currencies. As GameFi projects gain traction and interest in blockchain gaming rises, we anticipate a surge in innovation and development within this realm in the foreseeable future.
The Myria NFT marketplace is a hub for GameFi projects and all their NFTs, where developers and users can freely trade, buy, and sell digital assets. Discover NFT collections of games that are already available on Myria such as Moonville Farms.
About Myria
Myria is a blockchain game development studio and an Ethereum Layer 2 solution powered by StarkWare, to scale digital assets, NFTs, and blockchain gaming. Myria utilizes ZK roll-up tech to supercharge its ecosystem and bring the next generation of gamers to the blockchain. Myria has a thriving community of over 500,000 users, and more than 270 blockchain projects are already building on the Myria blockchain. Thanks to ZK technology, users can expect high transaction speeds, 0 gas fees, and free NFT minting.
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