Gamefi – What Is It?
Using Web3 as a platform, the gaming sector combines finance and gaming under GameFi. Players and producers can gain value by playing games by using GameFi’s cryptocurrency and nonfungible tokens (NFTs). It is common for these games to be hosted in metaverses, which are virtual environments.
A GameFi ecosystem that is decentralized enables interaction between players and developers. Gamers comply with creators’ engagement strategies and games that are engaging. NFTs and in-game tokens are distributed to stakeholders according to strong economic models known as “tokenomics.”
GameFi platforms often use a play-to-earn model (P2E) known as play-to-earn. At IXIE Infinity, P2E was successfully implemented at scale for the first time. As described below, the model operates as follows.
Purchasing the platform leads to players playing the game and winning gaming tokens. In addition to Bitcoin (BTC), Ethereum (ETH), fiat money, and stablecoins, you can exchange these game tokens for them. Game-related NFTs may also be updated as players improve at them. In addition, there are now marketplaces where NFTs can be updated and sold for more money.
Due to the demand side, which balances the economy, not scaling quickly enough, alternative economic models have emerged within GameFi.
“Play-and-earn” systems, for example, prioritize the game experience over financial gain. They argue that a great gaming experience can maintain high levels of player retention. Players need to see the money they gain from playing as a bonus.
Continuous evaluations and improvements are being made to improve these solutions’ sustainability and scalability. Increasingly, companies act as auxiliary systems in this ecosystem as GameFi platforms gain traction. To maintain the viability of the GameFi ecosystem, these players are often focused on particular duties.
A grasp of the GameFi environment might help you better navigate the GameFi ecosystem if GameFi is your thing. But unfortunately, even though many of these players frequently perform many tasks, they tend to focus on a single one.
Companies Engaged in Gaming
How does GameFi get started? It is the business of game studios to develop games. Imaginative people create user experiences using tools like Unity and Unreal Engine, and developers make them a reality.
These features are generally available on Axie Infinity (AXS) and Sandbox (SAND) platforms. Because GameFi companies specialize in compelling gaming experiences, their game creation capabilities must be of the highest quality.
Metaverse games may be released as standalone applications or as elements of metaverses. A metaverse is a virtual environment where users can interact, play games, go to events, shop, and fully immerse themselves. Metaverses are an essential part of many GameFi platforms to keep users engaged.
For the metaverse and GameFi to function together, the GameFi economic model needs to be well-established. Games are enticing to the gaming community because of the experience, and they are forced to spend their gaming tokens in the metaverse.
Guilds for Esports
Almost every consumer business strategy requires some kind of distribution system. As part of the GameFi platforms’ distribution network, platforms called gaming guilds are used. P2E relies on them for its operation, but what are their purposes?
P2E platforms grew in size, increasing the cost of NFTs needed by players. Buying an NFT to play a game for $200 is a significant investment for a Filipino or Indonesian player. Gaming guilds use scholar and NFT rental models to address the affordability issue.
A guild purchases NFTs from GameFi and rents them out to players (scholars). Players pay guilds rent with their winnings when they play P2E games.
Several guilds have emerged in the GameFi environment in the last year or so. Their ROIs have increased due to carefully choosing the players for whom they lease NFTs. In addition, scholarship programs are administered by guilds as a recruitment tool. Because educated scholars often earn more through effective games, these programs produce superior returns on investment for guilds. In addition to Merit Circle, Avocado DAO, and Yield Guild Games, a few other guilds are also known for their excellent reputations.
NFT Rental Platforms
NFTs are amassed by guilds and rented to students. To offer NFT holders a rental service, game developers can automate the renting process and offer it as a SaaS (software as a service). Several businesses are focusing on developing these SaaS capabilities.
NFT owners of GameFi platforms benefit from offering a rental feature because it creates passive revenue. There is, however, a risk that the NFT owner will be unable to rent out their NFT. In this demand risk, there is commercial potential. NFT owners now receive a set return on their NFTs and don’t have to worry about renting them out.
Although in this scenario, the NFT holder will make less money than if they rented out the platform directly. Providing a set return reduces the danger of not receiving rental revenue for a while. From these models, DeFi value propositions are also emerging for holders of NFTs.
A Platform For Games
In GameFi’s ecosystem, launchpads facilitate the development and growth of new platforms. A workspace is provided to GameFi projects where they can develop and implement their vision and strategy according to specific criteria. In addition, businesses can find reliable investors through launchpads to grow from there. Web2 startups use a business model similar to this as incubators and accelerators.
The potential of GameFi
Within the GameFi ecosystem, we have discussed several stakeholders and their functions. Given the rate at which this field is evolving, new models or iterations of existing models are likely to emerge soon. In addition, GameFi stakeholders are already investigating a few more use cases.
The price of an NFT mint can be chosen by some systems, for instance. The business strategy of other guilds changed to become marketplaces for video games after they started out as guilds.
This rapidly changing area is undergoing large-scale experiments. This article provides an overview of the prominent participants in the GameFi ecosystem. As well to these participants, there are also investors, influencers, exchanges, and market makers. Each of these participants contributes to the overall Web3 environment.