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According to Statista, the global video game market in 2021 is estimated at $ 178 billion, and by 2025 this industry is expected to grow to $ 269 billion. So far, the profits in the promising industry are mainly made by manufacturers. The revenues of the largest developers of the level of EA Games, Konami Holdings, Sega Games and Gameloft exceed $ 10 billion. And Sony holds the palm in the segment with $ 25 billion.
But in the near future, the situation may change radically. All thanks to the symbiosis of video games and blockchain technologies, in particular, NFT and DeFi. Today, projects that allow you to make money simply by playing the game have gained extraordinary popularity.
Such games have already been singled out in a separate category of the cryptoindustry called GameFi. We invite you to learn more about the features and trends of this industry, as well as understand how you can earn money while enjoying your favorite game.
What is the “trick” of GameFi?
Interesting information was published in the Worldwide Asset Exchange report: 75% of online gamers want to be able to exchange virtual gaming assets for currency that could be used in multiple projects.
The situation is such that traditional video games are built on an outdated economic system: within its framework, items and internal currency are of value only for players who buy them for real money from the developer. Outside of a specific project, such a currency is worthless. GameFi, on the other hand, gives gaming property a very real value.
Therefore, cryptocurrency games are gaining popularity at an incredible rate. In ordinary projects, all the property of the gamer does not belong to him. He kind of leases it from the publisher while he is in the game. At any time, the administration, without explaining the reasons, can deprive the user of all items, block the account, withdraw the item from the game, release a million similar items, etc.
GameFi is spared these disadvantages. In this ecosystem, everyone owns their equipment alone, and the records of this are recorded in the blockchain. A person can sell, transfer or use virtual property as they see fit. Therefore, crypto games provide an opportunity not only to have fun, but also to earn money.
Despite the wide variety of games in the popular category, they share several common features:
- Play2Earn… This technology allows gamers to earn valuable assets. In the future, they can be transferred to external trading platforms, sold for cryptocurrency, or exchanged for other items. The more popular the game, the more users it has, the higher the liquidity of the local currency and the value of property. For example, the AXS token of the Axies Infinity game in 10 months of 2021 has grown in value by almost 1,100 times – from $ 0.135 to $ 145.
- NFT… Characters or game items in modern crypto games are represented as non-fungible tokens. Thanks to this, you can safely sell and buy even the rarest specimens.
- Internal tokens… To register in GameFi projects and create a character, the first step is to purchase a certain amount of internal currency. During the game, these tokens can be earned and withdrawn by exchanging them for real money. Some projects use several of their types. For example, Axie Infinity has two of them: management tokens (AXS) and game currency (SLP).
- DeFi… In addition to income from Play2Earn, there is the possibility of passive earnings using DeFi technologies: staking, yield farming, liquidity mining.
- Blockchain… The first GameFi is built on the bitcoin blockchain. But the real revolution in the industry broke out only after the transition to blockchains with support for smart contracts and dApps: Ethereum, Wax and Solana.
From centralization to decentralization
The creation of a new game universe, the formation of the fundamental laws of the virtual world, the development of characters and objects – all this presupposes initial centralization. But then such projects focus on the maximum involvement of users in the development of the game world.
How is this implemented in practice? By voting for new storylines, introducing additional NFT items, changing existing rules or making amendments. For this, management tokens are used. The more these coins a player has, the greater the weight of his vote when making decisions. This approach, of course, does not provide complete decentralization, but brings it as close as possible.
In the future, GameFi projects will develop towards achieving maximum decentralization. It is planned to use DAO mechanisms. But so far, their application is only being studied and is considered a promising technology.
How Viable Are GameFi Projects?
The economic viability of the “earn by playing” business model is undeniable for a number of reasons:
- Growing popularity among users… This is evidenced by the increase in the volume of trade in project tokens. For example, Axie Infinity was the first GameFi platform to surpass 1 million users. At the same time, the trading volume exceeded $ 1 billion.
- Variety of earning options… As the ecosystem evolves, blockchain games are gaining new opportunities for generating revenue. For example, a player can buy a piece of land in the virtual world and build a casino on it, and other gamers will play in it.
- Creation of new jobs… We are talking about real and highly paid vacancies for specialists in various fields – designers of NFT items, programmers, lawyers, specialists in smart contracts, etc.
The conditional TOP-3 of the world of economic games on the blockchain today looks like this:
- Axie infinity… The current industry leader. The principle of the game is to grow, breed and trade digital pets, as well as in battles with the characters of other players.
- CryptoBlades… An RPG game where the gamer has the opportunity to make good money by participating in raids and clashes with other players.
- My DeFi Pet… Here income is brought by collecting, breeding, development, battles, trade and communication with pets.
All these games are incredibly popular in the countries of Southeast Asia: millions of people devote a lot of time to them. During the pandemic, GameFi literally pulled a lot of people out of the quagmire of poverty. Thousands of lucky ones left their previous jobs and completely switched to games, which allow them to earn significantly more.
Experts admit that the only drawback of top-end GameFi projects is a rather high entry threshold for new users. With the growth of the cost of domestic tokens, today it amounts to hundreds of dollars (and often exceeds a thousand).
But here the guilds of gamers come to the rescue, ready to lend a newcomer for a percentage of their daily earnings. In other words, you can start making money on GameFi at any time. There would be a desire.
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