What Is GameFi?

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The cryptocurrency world is buzzing about GameFi at the moment. The $175 billion video games sector is about to be disrupted by blockchain gaming. In the wake of titles like Axie Infinity and its more than $1 billion in-game asset purchases, the gaming industry is quite excited about GameFi.

GameFi combines the old-fashioned joy of winning prizes with the latest crypto innovations in DeFi. Players can trade, lend, or even borrow against their earnings. Let’s take a closer look at the GameFi concept and the projects working in this area to see how they earn new revenue.

The current state of blockchain games

NFT Games

A mashup of the terms “game” and “finance,” any crypto project that incorporates both games and financial rewards could be classified as GameFi. Gaming on blockchain has grown by 2,000% since Q1 of 2021 and now accounts for 52% of all blockchain activity. Furthermore, Footprint Analytics estimates that there are over 893,000 daily gamers.

On 13 Feb. 2022, Hive (332,088 gamers) and WAX (329,712 gamers) led the pack in terms of GameFi players per blockchain. Together, these two blockchains accounted for 64% of that day’s 1.03 million gamers. Hive and WAX’s popularity is that both blockchains do not charge gas fees. This makes gaming more accessible and appealing to gamers.

Additionally, the second and third most popular blockchains (BSC and Polygon) are notable for their low gas fees, supporting this hypothesis. Many established gaming titans have already announced their intentions to invest in GameFi and blockchain gaming.

For instance, Ubisoft, a household name in traditional gaming, has partnered with several blockchain gaming companies, including Tezos and Aleph.im. Similar to Microsoft’s announcement in Jan. 2022 that it would pay a record-breaking $67.7 billion for Activision Blizzard, one of the leading game developers known for creating blockbuster titles such as World of Warcraft.

Furthermore, in Dec. 2021, Microsoft Ventures launched a $27 million fundraising round for Palm NFT studio. Given the above, it seems that Microsoft has a big investment in gaming, NFTs, and metaverse. Currently, Epic Games highlighted “blockchain-based assets” as a prospective. This stands in contrast to its rival Valve’s decision to exclude blockchain and NFTs from its ecosystem.

What is GameFi?

The term “GameFi” is a mashup of the words “game” and “finance.” It mixes blockchain technology, non-fungible tokens, and game mechanics to create a virtual environment in which people may participate and earn money.

GameFi is a “play-to-earn” platform. This notion entails rewarding players financially for playing and progressing through stages in games. Certain blockchain games enable players to earn a full-time income while playing. Landing pages, farming, loans, token issuance mechanisms, and algorithmic stablecoins are a few of the DeFi tools integrating with these online games.

Blockchain technology is used to launch these types of gaming projects. As a result, players will have ownership of all digital assets they receive and cannot be given away. On a GameFi platform, everything is simple: all you have to do is play to reap the rewards.

How does GameFi work?

In GameFi, NFTs represent all assets, digital tokens that prove ownership of rare intangible goods. Look at stuff like land plots or gold bars and avatars, clothing, and weaponry. After finding and acquiring these items through gameplay, players have the option to trade them in digital marketplaces for NFTs or for cryptocurrencies. For example, players of DeFi Kingdoms (DFK), Harmony’s top play-to-earn (P2E) game, can boost their earnings by leveling up and improving their characters.

Users can build monetized structures on their land that other players pay to use, competing against other players in tournaments. This is similar to the earning potential of Ethereum’s Axie Infinity and Polygon’s Vulcan Forged.

In general, the DFK game wraps up investment, liquidity, and trading in a fantasy pixel art setting. It has DEX, utility-driven NFTs, and yield farming opportunities. $JEWEL (DFK’s main utility token) can be traded for money in exchange for liquidity pools. To gain experience, players complete tasks, level up skills, combine NFTs, and farm tokens.

DeFi Kingdoms boasts a well-established player base and a rich in-game landscape. All NFTs and cryptocurrency transactions are recorded on a public blockchain to track each player’s possession.

In this case, a global network of computers supports distributed digital record-keeping technology. Staking, where players can lock away tokens to receive annual interest and other benefits they can save to buy other products in-game or unlock new content, is another DeFi feature some games provide.

The Play-To-Earn model (P2E)

Play to Earn P2E Games

Gamers can earn in-game tokens by winning battles, achieving daily tasks, or mining resources as part of the GameFi model. You can exchange real-world value for established digital currencies like ethereum or stablecoins. When playing Gods Unchained, Ethereum blockchain’s most widely traded card game, players can earn money by creating rare cards and selling them in the marketplace upon completing ranked battles.

As part of the P2E mode of Farmers World, which is Wax blockchain-powered, it allows players to mine the Wax blockchain. This gives farmers the ability to mine the minerals they need to run their operations and make money from their yields for themselves and their families. NFT staking is a new income model that combines the popular DeFi concept of staking with NFTs. An example of this is Legends of the Ancients LOA tokens, which you can earn through staking NFT. Furthermore, users can earn interest just by holding their NFTs.

Solana supports the Mask NFTs in the card strategy game MixMob. Players can use them as avatars during gameplay, and they evolve dynamically based on their performance, determining how many MXM tokens the players earn. Mask bearers also receive one-of-a-kind NFTs. Some games, such as the BSC-backed defense game Warena, allow players to lease NFTs through the game’s marketplace. DeFi Warriors is yet another NFT game with a marketplace where players can lend their NFTs to other players.

Certain games necessitate a significant initial investment before players can reap significant rewards. To complete daily tasks in TownStar by Gala Games, players must own at least one structure or item NFT. Only after that will they be able to obtain the in-game token TownCoins. To play Axie Infinity, users must first purchase three Axies and then win battles to earn SLP tokens.

What are the unique features of GameFi?

GameFi was founded to resolve existing issues in blockchain gaming. Among the notable features are:

  • Allows users to explore and play various blockchain games distributed across many blockchain networks.
  • It is a central repository for in-game items and NFT assets owned by players.
  • Gamers can simply monitor the game’s P2E yields.
  • Provides instant exposure for gaming developers’ games and in-game products.
  • Initial Game Offerings (IGOs) allow investors to have early access to in-game assets and tokens.
  • Game developers will gain increased exposure and interact with the GameFi community’s gamers.

Advantages of GameFi projects


Gaming incentives

With the debut of GameFi, the P2E gaming model was a seismic shift for the gaming industry. The new principles rejected typical gaming revenue structures that mainly rely on in-app purchases and advertising. Besides, users are prohibited from utilizing their in-game assets outside the gaming area. On the other hand, blockchain-based games enable the exchange of in-game tokens and objects for cryptocurrency. As a result, players can take advantage of their in-game assets outside of the gaming environment.

Participation at a low cost

Most games in Gaming Finance are entirely free to download and play. In comparison to traditional games, you can benefit from the accessibility of all forms of P2E games. The low cost is the following significant value advantage linked with projects on a GameFi list.

A simple learning curve

Many consumers are skeptical of GameFi games because of their reservations regarding the new P2E approach. However, you do not need to follow any complicated processes or instructions to play such games. On the contrary, straightforward gameplay techniques are one of the most appealing aspects of GameFi projects. As a result, you can see virtually no hurdles to entry into P2E games.

Take control of your gaming experience

In the realm of GameFi, the best value advantage is the assurance of complete control over your assets. Gaming Finance projects permanently preserve all data pertaining to your in-game assets and non-fungible tokens on blockchain networks. You are not at risk of losing all your assets, even if the game itself crashes. Players have complete ownership of all assets they own in the game and may utilize them however they like.

The top 2 GameFi projects

1. Axie Infinity

Be[In]Crypto Image

Sky Mavis, a Vietnamese studio, developed Axie Infinity, a game that uses the Ethereum-based cryptocurrencies AXS and SLP. It has already exceeded $1 billion in token sales and was the first blockchain game to do so. Currently, It has 1.4 million daily active users. Similar to the Pokémon type of games, players gather, create, fight, and exchange “Axies,” which are in the form of NFTs.

The Axie Infinity team has built a unique sidechain that allows the Axie Infinity blockchain to work well with the player load. Many players have earned well from it, but it requires time and effort to breed, care for, and trade Axies. To begin your journey through the Axie universe, you must have at least three Axies on your team. Currently, the minimum price for producing three Axies is around $800.

In Adventure mode, players can choose to upgrade their Axies. They will then be rewarded for each mission completed. Axie owners, on the other hand, can put them through their paces in arena mode (PVP), where they compete against other players. Each victory in the arena mode raises your rating, but it can also bring you various rewards based on your rating.

All items received during the game can be sold. For example, Smooth Love Potion (SLP) tokens can be awarded to players. Axie Infinity has earned more than $150 million in commissions. This income is distributed among players, which explains the game’s success.

  • Axie Infinity (AXS) and Smooth Love Potion (SLP) are native tokens
  • 308,000 monthly users
  • Required initial investment: Before you can play, you must first purchase three Axies from the in-game marketplace.

2. The Sandbox

Sandbox sand

The Sandbox is a metaverse in which players can create, own, and commercialize virtual experiences using NFT and a cryptocurrency called SAND. The Sandbox’s native token (SAND) is also used for all Sandbox ecosystem transactions. In 2011, Frenchmen Arthur Madrid and Sebastian Borge founded the game.

Currently, the platform provides a set of tools for developers to create games without writing code, which they can place in one of the 166464 parts of The Sandbox virtual space. What truly differentiates The Sandbox from many other popular crypto games is that it allows users to design their 3D games and monetizable virtual plots.

According to Sebastien Borget, co-founder and COO of Sandbox, 16,000 people have purchased virtual land parcels in The Sandbox metaverse. The platform connects over 500,000 users’ cryptocurrency wallets. All transactions are subject to a 5% fee.

In this virtual universe, parcels of land also represent title documents for NFTs, which you can gain as real estate before construction. These plots of land can be on a virtual map that gamers can use to launch their avatars. To date, the company has sold almost two-thirds of these plots for more than $144 million.

How to get started with GameFi games

There are thousands of blockchain games, and each one operates on a self-contained economic basis. The following is a brief introduction to how to get started.

Step 1: Create a cryptocurrency wallet compatible with the game you wish to play. You’ll need to check the game’s official website to determine which wallets they support. While crypto wallets do not hold money in the same manner that regular wallets do, they store the encryption keys for digital assets, enabling you to access, transmit, and receive cryptocurrencies.

Step 2: Integrate your cryptocurrency wallet with the game. Unlike typical online games that require you to create a username and password or provide your email address, blockchain games create an account using your crypto wallet. This will also serve as your login method for the game. 

Step 3: Become acquainted with the game’s unique requirements. Numerous P2E games need users to begin by purchasing their in-game cryptocurrency tokens or NFTs. If you lack the funds to purchase a token or are unwilling to take on the financial risk, consider enrolling in an in-game scholarship program that allows you to borrow NFTs from other players. If you take that route, you will be required to share your profits with the NFT owners.

Bear in mind that, as with anything else on the internet, GameFi is not without its share of scammers, so keep an eye out for phony websites. Therefore, a smart rule of thumb is to create a separate cryptocurrency wallet for each game you play; this way, you’re more likely to lose only coins you can afford to lose.

The future of GameFi and crypto games

The best indicator of GameFi’s future is to examine the evolution of existing projects, such as Axie Infinity. Undoubtedly, the following years will see significant activity in this industry and all linked technology. 

As blockchain technology advances, the GameFi growth trend is projected to accelerate. The opportunity to own in-game assets and earn revenue from games makes GameFi extremely appealing, particularly in emerging markets.

Frequently asked questions

What is GameFi?

Game Finance is a hybrid of the dynamics of various online games and DeFi.

What are GameFi projects?

GameFi projects comprise blockchain games that provide economic incentives to play, sometimes known as play-to-earn games. Many of the current play-to-earn games mainly rely on what game designers refer to as a grinding feature. Players must spend significant time performing a repetitive task to earn their rewards, which includes crypto tokens. Generally, users receive in-game rewards by completing activities, competing against other players, or progressing through various game levels.

What are GameFi coins?

GameFi coins are real-world cryptocurrencies that work on the principle that you earn tokens by playing games. These tokens are like DeFi currencies, except they are decentralized. You can trade, lend, and exchange these coins through the game interface.

How do GameFi companies make money?

Typically, GameFi companies earn tokens for their games by charging fees on particular transactions. If the game is popular and many people play and trade the coins, their value increases.

How do I get into GameFi?

Choose a web3 wallet supports the blockchain on which the game is running (Ethereum, Binance Smart Chain, WAX, etc.) and the minimal amount of cryptocurrency required to get started with the game.


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Chris Adede is a content creator with an IT background. He specializes in cryptocurrencies, Fintech, and Blockchain. Chris has been writing and following the cryptocurrency space for several years, and he is enthusiastic about this new industry's potential to transform the world as we know it.

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