Blog: GameFi - the future of gaming
GameFi (Gaming Finance) is still a relatively new concept that combines features of decentralized finance (DeFi) with traditional games. GameFi can be considered a general name for game ecosystems that utilize blockchain technology, digital assets and features known from DeFi. GameFi aims to improve the player experience in particular and offer players completely new earning models.
GameFi is a concept that has been extremely popular in the cryptocurrency world lately. GameFi allows players to earn cryptocurrency by playing games, trading in-game virtual items, and participating in other game-related economic activities. This can include using, owning and trading the game's own cryptocurrency or in-game NFT commodities.
The arrival of GameFi revolutionizes the gaming world and brings with it numerous advantages for both players and game developers. It combines gaming and blockchain technology in a unique way, opening new doors to digital ownership and financial gain. The GameFi concept has gained great popularity in recent years as the use of cryptocurrencies and decentralized financial systems has become more common. GameFi as a whole has so far aroused enormous interest among both players and investors. Despite this, this may be just the beginning, and many experts consider GameFi to be the future of gaming.
GameFi is not only limited to the relationship between players and game developers, but can also provide new opportunities for game publishers and, above all, investors. Game publishers can take advantage of GameFi by opening up new revenue streams and building stronger communities around them. For example, they can offer players the opportunity to earn shares of game revenue or create unique bonuses and benefits using blockchain technology.
Investors have also become interested in the GameFi world, as it offers new ways to invest in the gaming industry. With the rise of NFTs and in-game financial systems, investors may see this as a potential investment opportunity. In addition, GameFi can attract traditional investors who are interested in decentralized financial systems and blockchain technology, but may not have been previously interested in the gaming industry.
All in all, GameFi is not only the future of gaming, but it can also change the overall picture of the gaming industry and open up new opportunities for many different players, including players, game developers, game publishers and investors.
Next, let's go through what kind of technology is behind GameFi and how GameFi works in practice.
Blockchain technology and GameFi
Blockchains are decentralized and shared databases that aim to solve the challenges of centralized databases. Any information that needs to be stored in a decentralized and reliable environment can be stored in the blockchain. Blockchain technology refers to the technology that enables the creation and maintenance of decentralized and shared databases among the different parties of the blockchain. The blockchain can be thought of as an account book that is shared among parties belonging to a peer-to-peer network. In addition to the possibility of building distributed databases, blockchain technology also offers many other advantages and application possibilities.
Recorded transactions on the blockchain are practically impossible to change or fake. The reliability of the blockchain is one of the factors that has aroused the interest of large institutions in blockchain technology. The data on the blockchain is virtually impossible to modify afterwards, and all actions performed are traceable. Members of the blockchain can trust each other and the correctness of the transactions performed, even if they do not know each other. Additionally, blockchain members can conduct business without third parties, such as remittance intermediaries, or carry out heavy trust processes, such as drafting contracts, without the assistance of lawyers.
Decentralization ensures the security of the blockchain. Blockchains are distributed databases that are run by up to tens of thousands of nodes, i.e. servers. The more nodes a blockchain has, the more secure it is. In contrast to centralized databases, there is no single critical point in the blockchain, which could be crippled by hacking.
Blockchains not only provide security and reliability, but they also promote transparency and efficiency in different operating environments. They provide a secure and transparent platform for recording various events and keeping their history. This makes blockchains ideal for a wide variety of applications, such as the GameFi projects discussed in this text.
GameFi brings together the gaming world and blockchain technology. Thanks to this, it is able to create completely new types of economic ecosystems for players. Playing in such an environment is not only a pastime, because in addition to playing, it offers the opportunity to earn real money.
At the heart of this completely new business model is the play-to-earn (P2E) concept, which rewards players for their active participation in games. P2E offers players earning opportunities in the digital world where they can accumulate cryptocurrency or other digital assets by playing.
An integral part of the GameFi ecosystem are in-game cryptocurrencies and NFTs (Non-Fungible Tokens), which allow players and investors to trade online. These allow players to own unique game characters, items, or other digital assets that can be valuable both in-game and out-of-game. This creates completely new earning opportunities for both players and game developers.
When talking about blockchains and GameFi, one cannot ignore the biggest platform solution in the cryptocurrency world, Ethereum, which is also in a central position when talking about GameFi as a whole. Ethereum is the leading decentralized blockchain platform in the cryptocurrency market, offering the possibility to create a wide variety of decentralized applications (Dapp), smart contracts, cryptocurrencies, DeFi protocols and unique digital commodities, or NFTs. It works as an open platform that attracts developers and innovators from around the world. What comes to cryptocurrency platforms, Ethereum is at the top in both the recognition and scope categories. Applications that are built on top of Ethereum generally aim to eliminate various middlemen and thus provide a direct and transparent way to perform various functions. Today, Ethereum also serves as a platform for numerous of the largest GameFi projects on the market.
How does GameFi actually work?
GameFi is a broad entity that combines gaming and blockchain technology in a unique way. It offers players the opportunity to earn cryptocurrency or other digital assets such as NFTs by participating in events in the game world. This innovative approach opens new doors for players as well as game developers and changes the nature of gaming permanently.
GameFi enables diverse game experiences for players and rewards for achievements earned in the game. Players can fully immerse themselves in digital environments and enjoy the joy of gaming while having the opportunity to earn rewards. As a reward, players can earn mostly in-game cryptocurrencies and various NFTs. Earned prizes can be easily converted or exchanged by the player into the cryptocurrency of their choice, which can be used in a wide range of digital transactions or other games. Players can also take advantage of the fluctuations in the value of cryptocurrencies and invest their funds forward to increase their returns.
GameFi games allow players to trade digital assets such as NFT tokens and in-game currencies. Trading can be done either within the game or on separate marketplaces that utilize blockchain technology in their operations. At its best, this creates a dynamic and interactive game world where players can cooperate and benefit from each other's skills.
GameFi games are mostly built around a strong community. This in turn supports the development of games and the interaction between players. Players can give feedback and suggestions to improve the games and participate in various events and competitions. This community approach creates a unique and inclusive gaming experience, especially from the player's perspective.
On a practical level, GameFi opens up new opportunities and earning models for game companies as well as players. At the same time, it offers the opportunity to create your own financial paths and take advantage of the value that gaming brings. GameFi can be seen to change the nature of gaming permanently, giving players more power and responsibility for their gaming experience.
Summary
GameFi (Gaming Finance) is a new and innovative concept that combines the features of decentralized finance (DeFi) with traditional games. It creates a generic name for game ecosystems that utilize blockchain technology, digital assets (NFT) and features familiar from DeFi. GameFi aims to improve the player experience by offering new earning models and creating financial opportunities for players.
GameFi offers players a way to earn cryptocurrency by playing, trade in-game virtual items, and participate in other game-related financial activities. Players can also benefit financially from in-game cryptocurrencies and NFT commodities.
The arrival of GameFi in the gaming world will revolutionize gaming and at the same time open up new opportunities for both players and game developers. It combines gaming and blockchain technology in a unique way, opening new doors to digital ownership and financial gain. GameFi has gained a lot of popularity in recent years as the use of cryptocurrencies and decentralized financial systems has become more common.
In addition, GameFi also offers new opportunities for game publishers and investors. Game publishers can take advantage of GameFi by creating new revenue streams and building stronger communities around their games. Investors have also become interested in the GameFi world, as it offers completely new ways to invest in the gaming industry.
Mikko Soon
Head of Private Banking
Last updated: 09.04.2024 15:00
