What Is GameFi And How Does It Work?

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Ever since digital games were invented, they have been amusing young children and adults alike. However, with the introduction of the e-gaming industry, gaming is no longer just a pastime activity. Today, you can actually play games and get paid for doing so. So, if you are a gaming enthusiast, keep reading this article as it will contain very important information about GameFi to benefit you.

As the cryptocurrency market grew, the gaming industry saw its potential and integrated digital currencies and other features related to Blockchain technology into their core infrastructure. Moreover, play-to-earn games were invented to help users fill their digital wallets with cryptocurrency just for playing games.

GameFi is a system that pays us for dedicating our time to different games. It uses DeFi and Blockchain to bring us the perfect gaming and earning experience. So basically, while you play games, you will be getting rewarded for completing certain tasks in the form of cryptocurrency. The money you earn is not fake and limited to the game, but you can actually withdraw it and use it to pay your bills. Even if you plan to keep them in your wallet, they will appreciate in value as the GameFi industry grows. So, you can use the cryptocurrency you earn by gaming as an investment as well. The GameFi system has helped many people make a living out of their favorite video games.

The new Web 3.0 infrastructure also contains GameFi to transform the gaming sector. In this article, we learn what GameFi actually is and how it works to benefit you.

What is GameFi?

Since Blockchain technology has lots of beneficial features, the experts have always been trying to implement it into various Features, like transparency, immutability, decentralization, and others, making Blockchain a perfect platform for developing various applications. Electronic gaming is one of the few industries which have succeeded in benefiting a lot by implementing Blockchain-based solutions.

When you join GameFi, you will be able to earn money while playing games in a decentralized system. You can earn NFTs, Crypto, and in-game items, which can also be swapped or traded.

This technology helps DeFi protocols in providing gaming services and allows games to use Blockchain systems to ensure transparency within the game itself.

When decentralized finance tools are used in games, players can actually earn cryptocurrency and tokens just by playing their favorite digital games. Features provided by Blockchain technology help run all the games smoothly. There are lots of benefits for players who play games within the GameFi ecosystem.

Since its inception, GameFi has become very popular amongst players of all ages. They can now play video games and earn money at the same time. The types of games supported include lotteries, play-to-earn games, and multiplayer games. When you play these games, you are required to complete specific tasks in order to earn money in the form of rewards. Once you collect enough NFTs or cryptocurrency, you can withdraw them to a cryptocurrency exchange and exchange them for fiat money.

Despite all of the benefits it provides, the GameFi industry is still in its initial days. However, players can still benefit from the decentralized economy provided by this industry and earn a living while playing their favorite games. This promotes healthy competition and attracts lots of new users to video games. Even if you do not know anything about GameFi, NFTs, and Cryptocurrency, you can easily take a course to learn everything quickly.

Working Mechanism of GameFi

GameFi is known for the rewards and benefits it provides its players. You can get rewarded in the form of in-game assets, Crypto, and NFTs. Almost every game using the GameFi system is unique because the creator selects a new infrastructure and rules for their game. In-game assets are also NFTs, which can be traded on any NFT exchange. So, you can actually convert the rewards you earn within the game into actual money.

Once you start playing a game and collect some rewards, they will help you become a better player for as long as you are playing the game. Moreover, some other rewards are just cosmetic and have nothing to do with the actual performance of the player within the game. Other rewards can even help boost your earnings if you keep them.

There are lots of games available in the GameFi market. Platforms like Decentraland can even help you trade actual land in virtual reality. You can own virtual land, build on it, and rent it out to earn money from other users. You can also increase your earnings on a few platforms even without participating in games. Some platforms allow you to mine and increase liquidity. You can then stake or lend those assets to make more money. By increasing your shares in platforms like Decentraland, you can participate in the decision-making process.

Features of GameFi

Let’s discuss some of the most considerable features of the GameFi marketplace.

A good example of the Play to Earn system is Play to Earn gaming. It is actually one of the biggest features of the GameFi model. Before this system was introduced, players had to pay money in order to play the games. Moreover, there is almost no financial compensation for your time and dedication to the game. Any assets you buy within the game are owned and controlled by a central authority. When your account gets suspended, or you stop playing the game, the assets are also gone forever.

In Play-to-Earn games, you can play the game and earn money at the same time. Everything you win or earn in the game stays under your ownership even after you stop playing it. This model helps you increase your earnings as you keep playing. Every game you play under this model has its own unique, rewarding system. You can easily understand the whole process after playing a few games for sometime.

In the GameFi model, you can start playing games and earning through them without even spending a penny. However, a few games might require you to invest in NFTs in order to start playing and earning.

Once you are in the GameFi industry, you can start earning by interacting with projects like Axie Infinity. This particular model uses ETH to reward its players. You have to collect Axies, which are in the form of NFTs, in order to redeem them. Just like any other game, you are required to perform certain tasks and defeat other players to earn rewards. If you keep your Axies together, they will help you earn even more Axies. You can then sell these on the NFT marketplace. In addition to selling them, Axies can also be lent to other players, and you can keep earning passively through this model.

Many models in the GameFi system allow you to stake, mine, and do yield farming to earn money. You can use the assets collected by playing the game to level up and increase your earnings even more. Staking is the main method through which you can earn lots of money in the long run. You can enter smart contracts with your in-game assets for yield farming or use gaming guilds to stake them and earn more money.

By borrowing tokens from you, new gamers can easily enter games that require more tokens to participate. So, this system makes it easy both for the investor and the player to stay within the ecosystem. Governance tokens can be earned and used by players to influence decisions on the platform. The more tokens you have, the more your voting capacity. This system is designed to include both the players and developers in the decision-making system to improve the platform.

Before the introduction of decentralized gaming, centralized games used to have various features which were only controlled by the developers and not the players. Moreover, anything you collected or earned by playing a centralized game could not be traded for other things like fiat money. But on the other hand, GameFi provides you with a great chance to on all of the digital assets within your game and also provides additional opportunities for its players to earn passive income by staking or lending their tokens for interest.

In the GameFi ecosystem, features like decentralization, security, and transparency are our top priorities. This creates a transparent system in which every user is rewarded for the time and effort they put into their game. This can only be made sure by using a decentralized technology like Blockchain. If you want to, you can sell your assets on an NFT marketplace. Moreover, you can trade the digital assets on one Blockchain for the digital assets on another Blockchain and retain their value in the process.

Steps To Start Playing GameFi Games

Signing up to play GameFi games and start earning money is very easy. That is because Blockchain technology makes the barrier to entry negligible in this field.

Let’s take a look at some of the most important steps you should take if you want to play GameFi games and earn money at the same time.

Make a Crypto Wallet Account

If you want to enter the GameFi industry, having a crypto wallet account is a must. Moreover, depending on the game you want to play, you might have to create your crypto wallet account with a specific crypto exchange. If you want to play multiple games at once, you might be required to register for multiple accounts on many exchanges. Almost every crypto wallet will allow you to keep the rewards you earn by playing games and also trade them whenever you want to.

You can easily create a wallet from your laptop or even from your smartphone. Once your account is created, you will be provided with the recovery phrase, which you will have to keep safe and secure at any cost.

Link the Wallet With the Desired GameFi Project

After choosing a suitable GameFi project and a game to play, it is time to connect your wallet with the desired project. For this, you will have to visit the website of the portal you have chosen and find the setting which allows you to link your digital wallet with your crypto account. Instead of creating a separate account, your crypto account can be used for playing games and collecting all the rewards. You might be required to go through some additional steps because of the privacy and security features of the Blockchain you are using.

Fulfill the Requirements

Before starting to play any GameFi game, you must fulfill all the requirements. While some of the GameFi projects are fully free to enter, others might require you to invest in specific crypto or NFT in order to start playing.

It is advised that you check out the game requirements before playing any game. This will help you understand the requirements and enable you to make an educated decision on whether you should play the game or not.

Future of GameFi

Although GameFi is showing promising results in today’s gaming industry, it is still a relatively new project. Ever since its inception a few years back, it has never stopped progressing. That’s because players love earning money for playing their favorite games.

As time passes, more firms and GameFi projects are starting to sell tokens and benefit their players. Today, every gamer can experiment with the Play-to-Earn games by lending a few tokens from NFT marketplaces. This system allows you to keep all the rewards in your personal position, even after you stop playing the game. Since the rewards are in the form of nonfungible tokens, you can stake them or lend them to earn additional interest in the long run.

Blockchain technology provides users and players with trust in the GameFi field. With the help of this useful technology, the industry is bound to make lots of progress. Both the developers and gamers are benefiting from this model, and the increasing popularity of GameFi strongly suggests that it will make huge progress in the future.

Benefits of GameFi

After all this discussion, determining the benefits of GameFi is really easy. It lets every player play their favorite game, and rewards them for collecting certain in-game items.

So, let’s discuss the biggest benefits you can reap in the GameFi industry, which also have the potential to change the gaming industry forever.

One of the biggest advantages of the GameFi system is that there is a minimum barrier to entry for every game. Moreover, there are lots of games that do not charge you anything for playing them. You can easily download and start playing any Play-to-Earn game and start earning today.

Another big benefit is that you get to on all the rewards and in-game items you get while playing the game. Your data is stored on the blockchain, and you on all the assets for your whole life even if you stop playing the game. You have complete control over all the assets within the game, and you can do whatever you want with them.

While many players doubt their abilities to start playing GameFi games, they are actually really easy to start playing and earning money. There are literally no complexities between you and the gameplay once you step into this industry. In fact, GameFi games are known to be really simple to understand and play. So, the learning curve is also minimum once you enter the GameFi world.

This gaming system has proven to be the death of traditional gaming, in which you are required to purchase in-game assets to enhance your gaming experience and get an edge over other players. Moreover, you cannot even own your in-game assets, and they are gone forever once you stop playing the game, or the game gets shut down. On the other hand, GameFi games allow you to keep full ownership of every asset within the game which you earn. You can even trade those assets outside the GameFi system in the form of NFTs. You can convert the rewards into fiat money as well.

Conclusion

We can conclude that, although GameFi is getting very popular in the gaming industry, it is still a new idea and needs further nurturing in order to become perfect.

This system is now challenging the traditional gaming industry, which used to force players to spend more money on the game to enhance their gaming experience and beat other players.

With the help of GameFi, players can now earn rewards while playing games. These rewards are in the form of NFTs and can be kept by the player or traded on an NFT trading platform.

However, before you create a crypto wallet account and start playing GameFi games, you should learn more about this industry and the specific project you’re signing up with.


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