GameFi – Metalok

Technology today has made such in-roads in our lives that it is difficult to imagine living without it. The ever-evolving digital world has affected our day-to-day lives and has given a 360-degree up-gradation to the world of entertainment.

Blockchain based games are a new rage. These games are changing the market of traditional video games with their play-to-earn (P2E) aspects and non-fungible-tokens. There is a huge potential and demand for NFT games which has created a new sector called GameFi.

What Is GameFi?

In November 2019, Jade Zhang, the founder of blockchain gaming platform Mixmarvel while delivering a speech at the Wuzhen World Blockchain Conference, said that technology and cryptocurrency have the potential to revolutionize the video gaming sector. In September 2020, Yearn founder Andre Cronje mentioned GameFi in his tweet, saying that blockchain technology and games are an important source of income. GameFi means earning from video gaming. It is a combination of two words, Game and Finance and is often used to refer to play-to-earn (P2E) games that offer economic incentive to players. Players typically earn in Crypto currencies or NFTs for completing various stages or tasks in the game. Here the game is played to earn and not just to win. Overall, it’s a great combination of fun, entertainment and earnings. It is important to note that GameFi is not gambling.

It is believed that in the near future, GameFi will overtake the nearly $180 billion global market for video games in no time.

How Does It Work?

Simply put, players can win rewards by competing with other players, completing a task or progressing to further levels of the game.

The rewards won in a play-to-earn game can be in the form of avatars, virtual land, costumes, weapons etc. It should be noted that each game has a different model and game economy. Majorly the in-game assets are NFTs running on the blockchain, in other words, they can be traded on NFT marketplaces or can be exchanged for Cryptocurrencies or real currencies. Any in-game property acquired by a player will remain with him, even if the server is down or the gaming company has experienced technical downtime. It becomes easier to earn more by inviting other people to the same gaming platform or in game tournaments and thus help build the game’s ecosystem.

Examples of some of the best P2E games are The Sandbox, Decentraland, Axie Infinity etc.

More About Play-2-Earn Model

At the core of the GameFi ecosystem is the ‘Play-to-Earn’ model. It is fundamentally different from the ‘Pay-to-Play’ model of the traditional video games which require the players to invest a certain amount before they can begin playing. For example, video games like Call of Duty require a player to purchase licenses or periodic subscriptions. The returns that are generated by the ‘Pay to Play’ games are next to none and their assets are guarded by the gaming companies. As opposed to the Play-to-Earn games which enable players to earn money as well as be in charge of their assets.

The gameplay system of the GameFi verse is simple to understand and easy to navigate. The best part about this system is that players of any age and experience can participate. There is no need to purchase anything and one can easily download it without any additional fees or investment. The assets or the NFTs one earns in a P2E model, are stored on blockchain for lifetime even if the game developer or the company goes bankrupt or runs away, a feature that’s missing in traditional video games.

How To Get Started GameFi Games?

Create a crypto wallet
Connect your wallet to the game
Check the requirements to play
Start playing and earning

Word of Caution

There are many P2E games in the market. Be careful of dubious and fake ones. Before you choose any GameFi project, research well about its marketing techniques and also about the technology being used. Do not fall in for tall marketing claims and gimmicks.

One of the biggest scams of GameFi is Squid cryptocurrency. In 2021, during the Covid era Netflix’s show Squid Games was topping all the charts, Squid cryptocurrency made its appearance around the same time and went upto $2800 because the show was a big hit and people assumed Squid cryptocurrency to be officially connected to the Netflix show but it wasn’t. There was no official connection and when this information became widespread, the value of the currency collapsed to zero. Scammers got lucky to withdraw all the money and ran away with close to $3.5 million.

You can also buy virtual real estate from marketplaces like Opensea where virtual lands or properties will be listed as an NFT.

Again like in real life, there are property agents in the world of Meta, but there are also many frauds who are taking advantage of people due to lack of regulations in this world.

Many such cases have arisen where frauds have sent a link of a virtual property similar to one listed on the real metaverse. As soon as the user linked the wallet to buy virtual land, these frauds vacated the crypto wallet and the potential real estate buyer did not even get the land. So one has to be really careful when dealing with virtual real estate agents.

In a similar fashion, Epic games CEO Tim Sweeny called the Fortnite token a scam and stated that the company is preparing to take legal action. The creator responded saying that the token is just a fan made project with no specific company behind.

To avoid scam games, pay attention to details like the team behind the game, marketing details, source of project’s profit, reviews on social media, and on professional platforms.

Future Of GameFi

The market for blockchain-based gaming is rising. It is pegged to be a $200 billion sector by 2024. The interest in the sector is increasing with many new games, gamers and players entering the market. It is estimated to be a $50 billion economy by 2025. Even though it’s at nascent stage as compared to traditional gaming, GameFi is growing ten times faster with daily active users expected to reach 12M by 2023 Q1.