GameFi: Now, What’s That All About?

GameFi: Now, What’s That All About?

The gaming industry continues its experimentation with the blockchain. A few days ago, Konami auctioned an NFT collection dedicated to Castelvania. At the same time, blockchain developers are engaged in creating full-fledged games using NFTs, which is called GameFi or Play2Earn.

In this feature, we’ll discuss the concept of GameFi, its difference from other games, and the use Play2Earn games can bring about.

How GameFi Is Different from Online Games

Most online games have an economic model: players earn in-game currency that can buy them objects to make things easier or look better. If users can exchange objects, the game produces an internal market and a specialisation. Some just dig iron ore or smith swords, others beat monsters for gold that would buy them a new sword with more hit points. If a player doesn’t want to waste his or her time to mine the ore or collect gold, they can buy the currency for real-life money. It is possible through a special store, or illegally from other players.

That’s what separates regular games from GameFi. In online games, the inflow of real-world money into the game is fully legal, while the outflow is not. In GameFi, users can honestly sell in-game resources for real-life money.

Blockchain and tokens move the in-game object market beyond the game itself and make it more convenient. Thus, if gold or ore exist as tokens, any player can list them at a decentralised exchange. Developers can issue objects as NFTs and users can trade them at marketplaces.

Some Criticism

GameFi is criticised for the fact that the projects are built around the economy rather than the gameplay. A strategy game on the blockchain is more about collecting unit cards, and a building simulator is concerned with speculating on land plots.

Another downside is that you have to pay to start the game. Thus, Tezotopia requires you to buy a land plot that costs at least $130. Ethereum-powered games require you to invest at least $500 for a starter character or object. That said, there are games where the start is free of charge, such as the football manager simulator Sorare.

The Use of GameFi Projects for the World

Back in 2014, mining gold in Runescape, which is an MMORPG, has become one of the income sources in Venezuela. The country’s average salary is $53 a month while gold farming could ensure over $200 a month. A local player told Polygon that he managed to earn $450 in Runescape and then left for Peru, and then earned $1,000 more to relocate his relatives. In 2019, the Runescape market plunged into a crisis due to massive blackouts in Venezuela. The locals spent a few days away from mining which drove the resources’ prices upwards.

The first GameFi MMORPG called Mir4 also helped the residents of Asia and South America make their living. The players mine Darksteel, exchange it for DRACO tokens, and sell them at centralised exchanges. After the launch, they could make up to $300 a day. By late 2021, it was $30 a day. Similar things happen in other games. Players from developed economies enjoy their expanding collection of NFT kitties while people in the Philippines or Venezuela earn their bread.

One More Advantage of GameFi

If all in-game objects are pegged to NFTs stored on player wallets, the game theoretically can live forever. Even if developers discontinue it and shut down the servers, the gamers will be able to fork the game keeping all their objects and valuables. That’s how the Tezos community resurrected hic et nunc.

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