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What is GameFi? GameFi projects are growing strongly as users are passionate about Play to Earn trend

It wasn’t long ago when every public blockchain tried to challenge Ethereum’s dominance when the DeFi field was boiling. Still, after the Axie Infinity game became a success, people started paying attention to the gaming market again with the Play To Earn trend. At present, after DeFi and CeFi, all eyes are on a new concept that is “GameFi.” So, what is GameFi? Let’s find out through today’s article.

What is GameFi?

GameFi, which combines Game and DeFi into one word, is the gamification of financial mechanisms where users can earn profits by playing games. Another popular term for this sector is the Play to Earn model. On the surface, the keyword is “gaming,” but at the core, “finance” is what matters the most for blockchains.

How does GameFi work?

The GameFi craze has changed the simple game system. By providing users with the opportunity to earn lucrative rewards, gaming is no longer a waste of money, and it’s actually about making money. The NFT summer of 2021 has turned into a GameFi summer, with several games taking crypto as a backdrop and raising token prices like a storm.

It is impossible not to mention the Axie Infinity craze with the increase in the price of the AXS token. Data from DappRadar shows more than 271,000 active users on Axie Infinity in the last 30 days. This popular crypto gaming platform on Ethereum has generated more than $220 million in revenue in the past 30 days, making it the top revenue generator among all DeFi protocols and blockchains, Ethereum included, according to data from Token Terminal.

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Source: Token Terminal

The GameFi environment offers endless opportunities for developers to craft a new universe and world with their own hands, filled with creatures, events, objects, and even in-game economies to attract droves of players and keep them glued to the interface. Players are offered endless possibilities in generating income from in-game activities and engaging them with many gaming benefits. The catches range from thrilling action and mesmerizing graphics to original meme-based fun that hides ample instruments for making real money.

Hidden behind the simplicity and cuteness of the characters in the game, many GameFi applications have indirectly introduced players to the complicated but simplified financial mechanism when encapsulating everything in just one thing.

That’s all there is to it when it comes to GameFi, removing the boredom and replacing the complicated mechanics of making money by playing games. Value is the fundamental concept of GameFi, where “playing” turns into “working” and “earning” seamlessly. Rewarding players with cryptocurrencies with real value is also a unique idea to attract more and more people to them.

As NFTs turn into coveted items that can be used to lubricate the gears of a DeFi mechanism, they gain intrinsic value and start attracting more than just the attention of avid collectors and fans. And as GameFi blurs the lines between games and finance, it seems that in-game economics is beginning to not only mimic, but even surpass real-world economics. Over time, GameFi and DeFi could become one, as traders increasingly buy and sell decentralized financial assets in virtual stores.

Conclusion

To some, the combination of gaming and cryptocurrency may seem like the perfect marriage. But, there are undoubtedly mixed opinions.

“Crypto has been looking for a mass-market use case,” Andrew Tu, an executive at quantitative trading firm Efficient Frontier, said. “Gaming is a sector that people have been hyping up for a long time. It’s the first area of crypto where the average Joe without a huge understanding of crypto or blockchain can participate.”

While Axie Infinity has also proven itself to be a compelling use case for blockchain games, paving the way for new entrants into the space, not every imitator can make it perfect. Therefore, with the success of Axie, it is likely that we will see significant gaming corporations like Activision Blizzard or EA (Electronic Arts) enter the space in the coming years, bringing blockchain gaming to the masses. But there will also be those who take advantage of this craze to create fake games, scam investors, and players. Therefore, be very careful when deciding to put your money into any project! There are also risks for the hot GameFi industry, given how rapidly it has grown.

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