Is GameFi Here to Stay?

The post Is GameFi Here to Stay? by James Wells appeared first on Benzinga. Visit Benzinga to get more great content like this.

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The gaming industry has begun to incorporate blockchain technology to create a new, thriving economy. By turning skins, weapons, power-ups and other in-game items into non-fungible tokens (NFTs), game companies can create real assets for their users. These assets are tradeable on open marketplaces, allowing the market to naturally price them.

Along with making game items NFTs, the play-to-earn model has grown in popularity, incentivizing gamers with tokens that are redeemable for dollars. With play-to-earn, gamers are paid by advancing in the game through experience points (XPs), winning battles and limitless other possibilities.

A number of other sub-areas in crypto have taken off, starting with the initial coin offering (ICO)  boom in 2017 and followed by yield farming, decentralized finance (DeFi) and art NFTs. The next stage could be the increased adoption of GameFi. 

By incentivizing players with digital assets and a play-to-earn model, all that is missing is quality gameplay. With billions of dollars entering the GameFi industry, this circumstance is likely to change. As higher-quality projects come to market, so will the number of gamers and monetary incentives. Being early to this adoption could be very profitable.

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Is GameFi Here to Stay, or Just a Fad?

While there is likely a strong future ahead for GameFi, some players in the crypto industry are using it to make a quick buck. Useless tokens and NFT projects that never ship an actual game are common themes. 

Companies building behind the scenes rather than promoting unproven products are the ones that hold the most potential. For better or for worse, crypto is tied to large sums of money, attracting shady players who are looking to take advantage.

The good news about the recent downturn in the crypto market is it rids the space of a lot of the bad apples. With prices pulled back, the space is largely left with crypto natives and builders, like a controlled forest fire that gets rid of dead underbrush helping the larger healthy trees expand.

GameFi History

The GameFi hype was originally spurred by a game called Axie Infinity. The game involves training, breeding and battling your Axies – cute creatures that are rather similar to Pokemon. All of this action is in a play-to-earn ecosystem. 

Axies are also NFTs and are tradeable on OpenSea, as well as in Axie Infinity’s in-house marketplace. One Axie was resold for a record $820,000. The Axie Infinity token, AXS, is awarded to players for progressing through the game; it trades today for just over $14. The better your collection of Axies, the more potential AXS you can earn, which begins to justify the $820,000 purchase.

Another key aspect of the GameFi economy is the chains that host the games. Originally it was Ethereum, the chain supports both ERC-20 tokens for the play-to-earn model as well as ERC-721 tokens for the NFTs. Today, more chains have functionality specifically to support gaming. Many different alt Layer 1s are competing with Layer 2 solutions that are built on top of Ethereum.

Pros and Cons of GameFi

As promising as the GameFi industry is, a few caveats hold it back.

Pros:

•  Incentivizes gamers with real money
•  Gives users ownership over their in-game items
•  A marketplace to trade assets

Cons:

• Many scams and projects that never ship
• Mediocre gameplay
• Difficulty onboarding non-crypto users 

GameFi Competitors

The leaders in GameFi today are cryptocentric, putting much more of their focus on the blockchain use-cases than on the game play. This key indicator shows that the space is early in its development. When the top gaming companies begin to enter, the crypto aspect will be naturally oriented into the games. Users will have seamless onboardings to crypto and GameFi. 

As games compete for users, blockchains compete for games. Some favorite blockchain games include:

• Axie Infinity
• Alien Worlds
• DeFi Kingdoms
• The Sandbox

These games run on a number of different chains. Games tend to prioritize transaction speed and low fees when choosing which chain to develop on.

Some of the top chains supporting GameFi are:

• Hive
• Binance Smartchain
• Polygon
• Avalanche

How to Make Money With GameFi

Money is made in a multitude of ways in GameFi, the most common is trading game or blockchain tokens. Also, staking these tokens to help secure the network can earn yield.

The other way is to play the game, earning NFTs or tokens as you progress. One interesting model that came from this is a process known as scholarship. In the Axie Infinity game, one person can buy the Axie and lend it to someone to play with; Then, the profits from the gameplay are split between owner and player.

How to Buy GameFi Tokens

Many GameFi tokens are sold on Coinbase Global Inc. (NASDAQ: COIN). If you are looking to play the games and not invest in the projects, then a non-custodial wallet is needed. Coinbase offers Coinbase Wallet; another popular option is MetaMask. These wallets can be added as Google Chrome extensions and will grant you access to different decentralized applications.

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So, is GameFi Here to Stay?

GameFi makes a lot of sense, as its incentives are obvious. However, its games will need to be able to easily onboard non-crypto users, as well as begin to feature better quality gameplay for the masses to begin to take it seriously. If GameFi can turn games that are fun to play into thriving economies, then it could be one of the most exciting spaces to come from crypto.

The post Is GameFi Here to Stay? by James Wells appeared first on Benzinga. Visit Benzinga to get more great content like this.

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• Source: https://www.benzinga.com/money/is-gamefi-here-to-stay/