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11 Feb 2022

Will GameFi Drive the Future of our Virtual Existence in the Metaverse?

Ananda Banerjee

If you are a gamer, you may know that Multiplayer Online Battle Arena (MOBA), Role-Playing Games (RPG), and First-Person Shooter (FPS) are all online game-playing styles. And while we can now pick any random game going by its title and start playing it on our computers, trying it out in the metaverse is an entirely new experience.

And here’s the thing. That experience is evolving even as you read this. In this article, we will be looking at one of the most interesting new developments with the GameFi-metaverse connect in focus. 

Key takeaways

  • GameFi combines the fun elements of gaming with the perks of DeFi.
  • Some GameFi platforms even support NFTs, in-game trades, and actual tokens as rewards.
  • GameFi is currently perceived as an opening into the metaverse and is expected to bring in a lot more participants in the future.
  • Axie Infinity is one of the more popular GameFi projects, followed by Decentraland and Gala Games.

Developers are now making it possible for every metaverse gaming instance to be aligned with incentivizing economics. This means they can now monetize games to keep players interested and invested. Some of you may recognize that this is a combination of gaming and Decentralized Finance (DeFi). You’re right. That’s exactly what GameFi is.

Note: DeFi or Decentralized Finance signifies a new breed of financial technology. It is an umbrella term encompassing peer-to-peer financial services available on public blockchains. 

GameFi is a confluence of traditional gaming and novel financing, also known as DeFi. In simple terms, GameFi takes digital gaming to a whole new virtual space. And once you are there, the financial aspects come in to support play-to-earn models, incentivized game creations, and in-game purchases.

Sounds like fun, right?

It sure is, but GameFi is also more than just a means of amusement. It is a concept prefaced by blockchain gaming, and while it is fun, how GameFi connects with the metaverse is a lot more than just that.

While some consider GameFi to be one of the few metaverse marvels, there is much more to this tokenized and virtual gaming wonder. And that is exactly what we are going to discuss. Are you interested in knowing more? Kindly tag along!

What is GameFi?

GameFi refers to decentralized, blockchain-specific gaming with several economic incentives.

So it’s kind of like a gaming competition, right? Wrong.

GameFi is the epitome of decentralization. It sure involves playing games over the blockchain and even getting paid for winning, but there’s a lot more to it. It is an ecosystem in itself, where participants can mine in-game resources, mint game-related NFTs, lend in-game assets, make deposits, stake collectibles, and even purchase land. All with a financial interest in mind.

Fun Fact: Did you know that Cryptokitties was probably the first full-fledged representation of GameFi?

GameFi has evolved from a standard play-to-earn set-up to become one of the more productive things in the metaverse, as the game-centric tokens are designed to work as full-fledged assets. These tokens are nothing like the standard bottle caps you might like and be used to collecting. And in GameFi projects, in-game assets are even tradable as NFTs. That certainly sweetens the pot further, doesn’t it?

Fact Check: In-Game NFTs are the specialized assets relevant to a particular gamer. They become more popular and valuable depending on the number of players associated with the game or the community in general.

But that’s enough about the nitty-gritty of GameFi. (For that, you can always read this insightful post.) Having understood the functioning of GameFi, we can now begin to discuss how it’s going to impact the future of our virtual dwelling, the metaverse.

GameFi key features

How Does GameFi Function?

GameFi comprises decentralized applications focused on, well, gaming. It is the way GameFi functions that makes it a sight to behold. Any GameFi setup or rather an ecosystem would require people to join, play, win, and interact as a community. And to manage one’s affairs within the space (i.e., rewarding others, buying goodies to play and scale gaming levels, and more), a specific form of ecosystem-relevant currency is required.

Do you remember Axie Infinity, the virtual gaming platform? Well, the Axie-powered GameFi setup requires people to first purchase gaming avatars called Axies by paying $700 upfront. Once they have the resources to play, they can breed, raise, collect, wage wars, and do all kinds of stuff on the GameFi platform.

And if you win and complete quests, you earn Smooth Love Potion (SLP) tokens. Just so you know, these tokens native to Axie’s GameFi ecosystem have value and can be exchanged over Decentralized Exchanges (DEXs).

 But that’s not it. People flocking to Axie Infinity’s GameFi ecosystem means a lot of attention for the metaverse-themed blockchain. And that eventually works as one form of Growth speculation. No doubt AXS, the native governance & staking token, took off so well in 2021.

How is GameFi Relevant in the Metaverse?

The metaverse is many things. (The one thing it’s not is real! At least not in 2022.) And it is already shaping into the hottest topic of the current year, with tech giants like Samsung even planning a smartphone launch in Decentraland.

The corporate and retail enthusiasm is justified as the metaverse coalesces technical concepts like Augmented Reality, Virtual Reality, and Artificial Intelligence. However, for users to ditch the real world and come to the metaverse, it would require a lot more than hype and euphoria.

Gaming is one of the industries that can skyrocket metaverse adoption like no other. Buying land, attending concerts, interacting with folks, and all that sound great, but at this stage, Gaming is the only option that sounds like the most credible thing to do in the metaverse.

But why would people ditch their existing gaming groups and consoles and move to the metaverse? Well, that is where GameFi comes into the mix. Metaverse-themed gaming blockchains are steadily incentivizing gamers, NFT creators, in-game asset sellers, participants, and even decision-makers to flock to the ecosystems.

And don’t we all know that “One brings Two, Two brings Many”?

The Rise and Rise of GameFi

For now, GameFi is the largest door to the metaverse. Moving into the future, it will be the breeding ground for the creator economy. And ultimately, it will encompass the entire virtual ecosystem in a full-filled financial realm that will require queuing up.

Yes, that is how the lifecycle of GameFi looks in the foreseeable future, based on recent validations. But do not take our word for it. Here’s a list of the top projects that are bringing GameFi to our doorstep (the virtual one, of course) for you to go through and decide for yourselves.

Decentraland

While we did talk about Axie Infinity, it is Decentraland, one of the more complete and project-intensive metaverses that are taking the GameFi game to the next level. Decentraland lets you play highly popular casino games virtually with the option to earn NFTs, MANA (the native token), and even virtual merchandise.

CryptoBlades

A web-based RPG, CryptoBlades deals with combative warfare. In terms of incentives, its SKILL tokens can be earned. And as the platform gains more popularity, the weapon NFTs are expected to become exclusive assets. But why wait when CryptoBlades still allows you to trade NFTs for BEP-20 and SKILL tokens?

Disclaimer: This shouldn’t be considered financial advice. Kindly DYOR.

Gala Games

One of the well-known names in the GameFi space, Gala Games, is on a mission to create immersive blockchain games. In its universe, you can join a radiant community of gamers and can play games to earn GALA tokens. And kindly note that GALA gained almost 80% over the past week.

Disclaimer: This figure shouldn’t be considered financial advice. Kindly DYOR

And while we have mentioned only a handful of projects, there are close to 15 impactful GameFi options to check out globally!

GameFi and Metaverse: Mutualism or Commensalism?

Contrary to popular belief that the metaverse benefits GameFi developments or vice versa, it is now abundantly clear that the relationship is mutually beneficial instead of being commensal (where only one party benefits).

It goes without saying that the metaverse and GameFi share a symbiotic relationship. The metaverse was what opened doors for GameFi. And it is GameFi that is now driving the popularity of the metaverse through the roof.

But that’s just the tip of the iceberg. With companies like Ubisoft (the name behind Assassin’s Creed), Zynga, and Square Enix (the name behind Final Fantasy) vouching for GameFi, token releases, and other blockchain-centric activities, it is a matter of time that our most beloved games find a place in the metaverse.

Should We Be Careful?

Well, our response is: Shouldn’t we always be careful when in a virtual space? According to critics, some gaming companies might join the GameFi space just to mint money.

On top of that, there are chances of bot proliferation in the gaming space. Bot proliferation means that computers would begin to join the competition on gaming platforms, and human players would naturally begin to lose games to them.

Further, as most GameFi resources are still dApps, issues related to smart contract code bugs might appear every now and then. And yes, we still need to watch out for Rag Pulls. Instances where game developers run away with player money.

Wrap-Up

Palmer Luckey, the founder of Oculus VR, asks, “Why shouldn’t people be able to teleport wherever they want?” Well, with the metaverse, they can. At least virtually. But the metaverse is still a young concept; people need to have a clear perspective on it for them to take the plunge, and it still needs to give people even more reasons for them to do so.

GameFi, however, is expected to make things easier, bringing real people into virtual spaces. And with more players entering the GameFi space with a focus on incentives and NFTs, we might see a metaverse boom in the future. Especially with some use cases worth reveling in.

Looking to learn more about fun concepts like GameFi. Well, do it right with CoinSwitch by your side.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

writer

Ananda Banerjee

Content Writer

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