GameFi: the online gaming revolution combined with finance

GameFi: the online gaming revolution combined with finance

Thanks to decentralized finance (DeFi) and Play to Earn video games, a new concept has emerged within the crypto ecosystem, which combines both worlds: GameFi or Game Finance.

At Empirex Capital we know the importance of being informed about new trends in the digital world. Therefore, we will explain how this new concept that is revolutionizing the gaming industry worldwide works.

To begin with, Play to Earn (P2E) type games are built on blockchain platforms, a system with sequences of blocks or units of digital information stored in a public database.

While in-game purchases, tokens and other items have been around for a long time, prior to GameFi these lacked any real-world value or utility. Thanks to blockchain gaming this changed and transformed into economic incentives for its players.

Following this line, NFTs (Non-Fungible Token) are one of the main elements of GameFi, as they allow users to maintain ownership over the digital objects they create or obtain within the game, facilitating monetization as they can be transferred outside the digital world and sold on the market.

As their popularity grows, so does their value in the marketplace. During the first quarter of 2022, the GameFi marketplace had more than 1.2 million active players (Footprint Analysis and DeGame). Also, with a market capitalization reaching US$21 billion earlier this year, Game Finance tracked the rise and fall of the Bitcoin price.

One success story is Axie Infinity, as according to a study published by Cointelegraph Research, its players in the Philippines were able to earn their regular monthly salary in 2020 only through this game and at a time when measures to prevent the spread of the Covid-19 pandemic were at their strictest while generating great economic hardship for the country.

Although P2E games such as Axie Infinity, Splinterlands, Bomb Crypto or DeFi Kingdoms, do not represent a great challenge or generate great amazement in veteran players or followers of other types of games such as Call of Duty, this is a different experience that, with a different approach, is also designed to make its users enjoy.

It is important to highlight that its growth field is huge and that, surely, these will evolve to be more attractive and dynamic at a visual level, not to mention that the challenges of the market are always a good incentive for innovation and development of new proposals.

The future of GameFi is promising, not only because of the growing number of users but also because of global dynamics that feed the sector. With the shift from Facebook to Meta, in relation to the Metaverse, the quotes of all crypto assets related to shared virtual environments skyrocketed.

Created on 17th Jun 2022