What is GameFi?
GameFi is a variety of blockchain-based gaming platforms. The first games of this type appeared in 2013, but over time they began to gain popularity rapidly. But the rise in popularity came in September 2021, and in August of that year, GameFi’s platforms experienced a real boom. For example, the developers of one of the most popular games, Axie Infinity, made over $1.2 billion in revenue.
How does it work?
In blockchain-based games, characters are NFTs (non-fungible tokens). Players have an option to create their own unique characters or buy existing characters, pump them up and sell them. Payment is made in the cryptocurrency of the platform on which the game is based. Moreover, in some games, you can bet on the outcome of battles. In order to sign up for such a game, you need a crypto wallet. Since most GameFi platforms adhere to the Play-to-Learn principle. However, you should study in detail the project where you are going to register and transfer the funds. The internal tokens of the most popular games have already moved beyond their platforms and are traded on cryptocurrency exchanges. The GameFi industry is gaining momentum due to the dynamic development of the decentralized platform and gaming segment. Some game tokens are even accepted in regular shops, such as Smooth Love Potion (SLP) in the Philippines.
Benefits and potential risks. What is behind the scene?
Despite the fact that some token games have started to be accepted in regular shops, the Philippine authorities have voiced their concerns and are going to regulate a special tax on SLP transactions. This means that such transactions are not sustainable and should be treated with caution. There are many scammers online who create such gaming platforms posing as blockchain games, which are actually pyramid schemes. Experts note that some GameFi platforms are currently undervalued and lag behind the general development trend. According to analysts, the FaraLand and IG Gold platforms are expected to boom in the near future. Experts predict the further development of the decentralized gaming market. However, the value of tokens can fluctuate significantly under the influence of the bitcoin exchange rate, which makes it very risky. It is well known that the entire market depends on the movement of the first cryptocurrency. This could mean that if bitcoin collapses, GameFi projects are likely to collapse as well. In the near future, there will probably be resources (metaverses) where it will be possible to enter with a leveraged NFT character and compete with characters from other games. There will also be entire virtual markets where players can sell or buy everything they need.
GameFi’s blockchain-based gaming platforms are rapidly gaining popularity. However, such innovative technologies can have both upsides and downsides. It all depends on the risk the consumer is willing to take and the benefit he or she can derive from it.