What is GameFi and How Can You Earn While Playing?
During the last years of the crypto reign, the GameFi games managed to climb to the list of the top game genres, leaving behind the traditional games we were used to.
New users keep joining the constantly increasing number of GameFi game apps seeking the chance to earn rewards or even an income.
How does this new game type work? What does Play2Earn mean and what you should know before you start playing? In the following guide, you will find anything you need to know.
What is GameFi and how does it work?
GameFi -or usually referred to as Play2Earn(P2E) - is a genre of blockchain games that keeps rising and aims to establish a new type of gaming experience. The advantage of GameFi compared to conventional games is the achievement of financial gains through gameplay entertainment.
As its name indicates -a portmanteau of “game” and “finance”, GameFi games offer players, the ability to earn crypto or NFT rewards by completing in-game tasks. The players can then trade their earnings on exchange platforms and NFT marketplaces accordingly to gain financial interest.
Players in GameFi can earn their rewards in a variety of forms depending on how the game is designed. Players will be called to succeed on missions, battle against each other or complete achievements, always in line with the content of each game.
The earnings can be either cryptocurrency -usually tokens created by the GameFi project-, NFTs or in-game assets like cosmetics, weapons, skill points and many more. In most cases, the assets are NFTs available on the blockchain and that gives the freedom to players to trade them directly via an NFT marketplace
The feature that GameFi logic is based on, are *Play 2 earn (P2E), Digital asset ownership and Defi apps.*
Play 2 earn (P2E)
The Play-to-earn model (P2E) is one of the key features of the GameFi projects which allows the player to earn crypto assets like tokens and NFTs by taking advantage of the in-game assets. In contrast with conventional games, in which the development company is the rightful owner of the game assets, P2E gives full control to players and the right to earn money by exploiting them.
Even there is a difference to Pay-to-play (P2P) -as P2E games usually do not require investment in order to start playing -some of them will require the user to buy crypto assets or NFTs before joining the game. In that case, the players have to evaluate the risks as there is the danger of investing more than the highest rewards they can ever earn from the game
As mentioned before, players can own in-game digital assets that will enrich their gameplay experience. Types of these assets could be skins, weapons, times, skill points, virtual land properties and many other game components
Players can monetize the assets for financial exchanges or use them to build a passive income over time. For example, players can rent an in-game item to other players in exchange for money or charge the visits that take place on the land they own.
Other GameFi projects also offer features that are widely known to crypto holders and assist them to have passive incomes. Features like these, are Staking, Mining, Liquidity and Yield Farming.
Based on each game's mechanics, the more you engage with these features the more the game rewards you. A game may escalate your Staking APY when your in-game character level up or it may give you more privileges and access to exclusive content by locking a minimum amount of tokens.
How to get started?
There are thousands of blockchain-based games in the market. Each one works differently, so be careful about scam projects or fake websites that can put you at risk. Be sure to do your own research and choose projects that have Audit and KYC certifications from known crypto firms. Ideally, you should create a new crypto wallet specifically for this purpose and only use funds you can afford to lose.
If you are confident that a game is safe, here are some steps to get started.
Create a crypto wallet The first thing to do is create a Cryptocurrency Wallet. As mentioned above, it would be better to create one specifically for GameFi games. Note that each game may require a different blockchain network so be sure to check before you create it.
Connect your wallet to the game Next, you have to connect your wallet to the game in order to start playing. On the game’s official website, should be an option that by clicking, you can connect with your wallet. Be sure that this is the correct official website of the game and not a fake replica of the original one.
Check the requirements to play Before you decide to invest in GameFi, be sure to check what are the requirements to play. Usually, the game will ask you to buy their crypto tokens or their NFTs in order to initiate. Dedicate time to do your own research and estimate how long will it take to get your initial investment back plus profits
The number of GameFi projects has exceeded any predictions in 2021 & 2022 and is expected to continue growing in the coming years as new ones keep deploying in all popular blockchains like BNB Smart Chain, Ethereum, Polygon, Harmony, Solana, and many more in regular basis
With the combination of gaming and financial earnings, it is no wonder that GameFi technology rapidly attracts gamers and crypto holders. The only logical conclusion we can come to is that the number of GameFi games and the members of the GameFi community will continue to rise side by side with the crypto market.