The concept of Gamefi was first proposed by Mary Ma, Chief Strategy Officer of MixMarvel, in a speech at the end of 2019, namely game finance, which adds elements of financial attributes to the game. Through the continuous evolution of the market, a new business model of Game, DeFi and NFT combination has been formed. GameFi allows boring financial products to be launched in a gamified way, finds new breakthroughs for DeFi, gives NFT more economic benefits, adds rich and diverse economic models to games, and brings new vitality to the entire blockchain ecosystem.
It was mentioned again and known to a few people in September 2020, when Andre Cronje, the founder of Yearn Finance, posted a related tweet to the effect that the development of DeFi at that time mainly tended to traDeFi (transaction-type DeFi), and in In the future, the attributes of DeFi will be more gamified.
In recent months, due to the explosion of Axie Infinity, this concept has been frequently mentioned by everyone. From the conception to being gradually known to everyone recently, it has a deep connection with the development of blockchain in the past two years. In 2020, the concept of DeFi is hot, and after more than a year of development, a huge ecosystem has been built, and then the popularity of NFT, and the tokenization of rare assets has given Gamefi the soil for survival.
So what exactly is GameFi?
As you guessed from the introduction, GameFi combines DeFi on the backend with games that include collectible NFTs as UX. Instead of interacting with hard-to-use or boring financial interfaces, you immerse yourself in a virtual world, earn money playing games and invest in the ecosystem to help it grow.
Haven't we seen DApps like CryptoKitties that use NFTs before? We did see it, but GameFi offered a different focus. Rather than simply collecting and buying and trading, etc., the new, more complex game gives users the opportunity to interact with all the features of DeFi, whether it's yield farming or lending or token minting.
On the surface the collectible art world may seem incompatible with complex financial operations, but that is the power of GameFi, which provides a financial tool accessible through gamification to those who conduct regular transactions.
Buying in-game tokens or items to use in virtual worlds is nothing new, as World of Warcraft and FIFA have incorporated these elements years ago, and there is also a huge in-game market on the Steam platform where players Their items can be sold directly from Dota2 or other games. The difference is that participants have a greater degree of autonomy in creating and owning and selling their items.
GameFi applications initially involved connecting crypto wallets and depositing currencies such as Ethereum, actively encouraging players to create and earn and monetize through game items, thereby fostering greater user stickiness. As the gaming ecosystem grows, everyone from developers to users benefits.
As new gaming cryptocurrency projects continue to emerge, this video cannot provide a definitive list. But we're going to introduce three games that illustrate the industry's creativity and growing popularity. Order and ranking are irrelevant.
The first is Axie Infinity built on Ethereum
Axie Infinity is a cartoon universe where players collect, trade, and battle fantasy creatures called Axies. It has about 1 million daily active users, about 40% of which are in the Philippines, with Venezuela and the US being the second largest market.
One of the main goals of the game is to breed new Axies, which you do by earning SLP. These SLPs can be traded on DeFi exchanges and centralized exchanges such as Binance.
Another token, Axie Infinity Shards (AXS), can also be earned by interacting with certain parts of the game or by staking cryptocurrency or by creating user-generated content. AXS acts as a governance token, giving players a say in how the game evolves.
The second is also a sandbox built on Ethereum
Following Minecraft and including two successful mobile games, sandbox provides players with the tools to build and own a metaverse in-game and to monetize their creations.
Players can buy LAND (a unique ERC721 token) on which they can build and host their own NFTs created through the protocol's VoxEdit feature. Once complete, these NFT assets can be exported to the in-game marketplace.
Sandbox goes beyond the creation and trading of NFTs, giving users the tools to actually create their own 3D games and experiences that can also be monetized. Similar to Axie Infinity's AXS, SAND is a token that both facilitates transactions and empowers governance. In February of this year, the game announced that it had sold 2,352 LANDs for a total of $2.8 million.
The third is CryptoBlades built on Binance Smart Chain
CryptoBlades is an NFT RPG where players can earn local SKILL tokens for participating in raids and defeating enemies. Players can also use BNB to buy SKILL tokens, which can then be exchanged through the ApeSwap decentralized exchange on BSC. This is a good thing for Binance as the demand for BNB increases and there is a bigger investment in its blockchain.
Like other GameFi apps, in CryptoBlades, users can customize their weapons and accessories, mint them as NFTs and sell them in the marketplace. Following in the footsteps of CryptoBlades are other projects, such as Bunicorn, which hope to gain a larger foothold in the market by combining finance and entertainment and gamifying NFTs.
About the value of GameFi to players
The current world of GameFi seems to encourage the right mix of entertainment and creativity, while also making profitable financial decisions. In the case of Axie Infinity, SLP currently has a market cap of over $150 million. With AXS up 900% since June, top players can net hundreds of dollars a day, with even bigger windfalls if they sell when they're up.
Monetization aside, people continue to participate in this metaverse because it's fun and provides a sense of community and fuels a lot of people. Through governance tokens and content generation initiatives, players feel like they have a place in the protocol and can positively influence its direction.
As GameFi gains and sustains attention, it seems that more engaging and sophisticated games will be made, bringing more supporters and investors to the DeFi space.
So what is the connection between Gamefi and DeFi?
Gamefi can be counted as a subset of DeFi, because they are all in the financial field. The most popular game at the moment is Axie Infinity. A large part of the reason for its popularity is that playing games can make money, that is, play to earn (play while playing), through early investment, and then play games every day to get a certain profit. I have introduced it in the previous video, and friends who are interested can look at my previous video.
This game-playing mode of making money is essentially the same as DeFi's liquidity mining. Liquidity mining is to provide Token pledge to obtain rewards. In the play to earn type of games, you buy various items in the early stage, and then spend a certain time playing the game every day to earn income, which is similar to APY (Annual percentage yields deposit annual interest rate) in liquidity mining.
DeFi's liquidity mining is to provide depth for Tokens, allowing people to exchange them better, while chain games are to allow users to earn profits in the process of playing. In essence, it is to generate income more stably by pledging certain funds.