Most important facts about GameFi
16.12.2021 • Просмотров:

Most important facts about GameFi

By Decimal

Crypto games are digital games that allow participants to own a part of the game. This is due to the fact that they exist on the basis of the blockchain: transactions, assets or property rights are stored in a decentralized manner. Players can receive rewards for their activity and trade directly with each other. Examples of property in the game are skins for a game character, earned weapons and other items, or, in strategy games, cards with certain properties (attack/defense points, …). The in-game currency often used in games (Fortnite VBucks, Roblox, Robux, World of Warcraft Gold) is also a token in crypto games.

Classic games, on the other hand, are in the hands of a particular provider. It charges a usage fee (purchase price, subscription, advertising, etc.) and receives additional revenue from the sale of digital goods, extensions and new versions. All operations are carried out through a centralized platform.

Therefore, crypto players have more opportunities to use their game progress, compared to classic players.

Crypto-games are taking an increasing share in the gaming industry. Especially 2021 turned out to be a winning year for play-to-earn crypto games. According to Coinmarketrate.com, companies developing games with tokens have received record amounts during various serial rounds. Among them are Sorare with 680 million (Series B), Dapper Laps with 305 million (Series C), 250 million (Series D) and Forte with 185 million dollars (Series A).

How Cryptocurrency Games Work

Crypto games initially include all games with blockchain elements:

  • Games are centralized, only tokens are based on blockchain (NFT Games, Crypto Gaming).

This includes games in which only tokens are stored on the blockchain. In most cases, this is NFT. However, depending on the purpose, tokens that can be used are also used. Some of the structures of these games are centralized.

  • Games also run on the blockchain (blockchain games)

Less successful are the so-called blockchain games, in which all game transactions occur through one or more blockchains.

Let’s look at the first category, i.e. ordinary computer games that create financial incentives using tokens and NFT. The term “play to earn” has become well-established for this type of game.

How it works

In play-to-earn games, players often start with NFT, that is, digital characters, items, or other owners who are represented by tokens and have certain properties. Players must buy these NFTs in advance. Alternatively, each player receives a standard NFT at the beginning of the game. Depending on the category of the game, gamers must compete in the game with these tokens. Thanks to successful performances, they can improve their NFTs, increase them, or combine them with other tokens.

It may also be that players first “earn” in-game currency during the game, which they can later use, for example, for upgrades or certain actions. At any time, users can sell both in-game currency and NFT.

Where does the money that players earn in play-to-earn games come from?

The gaming industry is already a billion-dollar business. Players spend a lot of money on their digital identity in the game, or on getting certain improvements. In ordinary computer games, this money goes to the manufacturers of these games.

Crypto games create an economy similar to the economy in the real world:

Some players spend money on what other players spend time and effort on.

In the example with Axie Infinity, these are tokens (SLP) that are necessary for the growth of Axie NFTs. Those who do not have time to complete daily tasks to collect the minimum amount of SLP for breeding can simply buy SLP on the free market. Those who have earned SLP are sellers and thus can earn money from games.

The Economic Cycle in Crypto Games

NFT is what makes games really interesting. These are unique tokens that can be traded both inside and outside the game. Depending on the game, participants can create a token through a combination, competition or other mechanisms. Players can also simply buy them, or earn money by betting. NFTs do not only show ownership. They also have collectible value.

Therefore, it is not surprising that crypto games have a significant secondary market outside of the games themselves. For example, NFT Decentraland or Axie Infinity were among the most quoted assets when such large platforms as OpenSea or Raible appeared on the NFT market.

As the importance of NFT as a whole grows, and the available marketplaces, the development of games gets a reverse impulse.

Play to earn

Crypto-games provide an opportunity to earn income. Since this activity intersects with finance, it is also called play-to-earn or GameFi, referring to DeFi (decentralized finance).

There are various streams of earnings in them:

Equity capital

Participants can bet their capital and place bets on the success of certain games. If the game becomes very successful, it is expected that the value of both NFT and any tokens acting as in-game currency or management tokens will increase.

Play for a reward

Participants can complete certain tasks or achieve goals by playing games, for which they receive a reward in the form of NFT or in-game currency. They can exchange them for other cryptocurrencies (or fiat) on the open market.

How to Start Playing Crypto Games

In principle, it is not always so easy to start playing crypto games. Those who start without cryptocurrency experience should first start a wallet, buy coins, send them to the wallet and link the wallet to the corresponding game. If the wallet and coins already exist, it will be faster. But even here it is important to check whether all the requirements are met (for example, the correct coins). It may also happen that before starting the game you will have to buy game characters in the form of NFT.

There is no standard procedure for starting games yet. Therefore, the start varies from game to game. Game manufacturers’ websites usually have good guides describing this process.

Examples of Well-known Crypto Games:

  • Axie Infinity
  • Decentraland (Metaverse)
  • Sandbox (Metaverse)
  • God Unchained (card game)
  • Sorare (fantasy football with trading cards)
  • Illuvium (open-world role-playing game, in development)
  • Star Atlas (MMO)
  • Outlook

Conclusion

Crypto games are still an exception in the rapidly developing gaming industry.

However, the success of Axie Infinity among millions of players, despite serious technical and financial obstacles, has shown that the growth potential is huge. It is likely that every successful gaming concept that is also suitable for crypto games will be implemented as such in the next few years. However, much remains to be done in terms of usability.

An important keyword here will be interoperability. The easier it is for users to smoothly switch between games, the more users will take the first step. And if it will also be easier for non-technical users to get started, then there will be practically no limit to crypto games and their success. Financial incentive systems play an important role in this.

Therefore, it is probably not for nothing that the Russian (and not only) crypto community is looking forward to the release of a multi-user browser game on the DecimalChain PRIDE Fight blockchain, which, according to the developers, meets all of the above criteria.

But the connection of games with making money can also be considered critically, since games should be, first of all, exciting even without financial incentives.

It is also unclear how regulators will treat crypto games. After all, you have to pay a tax on the income from games. It is necessary to comply with money laundering laws and much more. And since the vast majority of cryptocurrency games are built on centralized structures, there are definitely starting points for restricting or banning such games.