Is GameFi the future?

What is GameFi?

GameFi is an online game based on block chain, which is a combination of game, NFT and decentralized finance (DeFi). It presents decentralized financial products in the form of games, gamifies DeFi rules and NFT derivatives of game props.

Unlike the traditional game industry, one of GameFi's notable models is Play to earn, where players who contribute to the game ecosystem are rewarded with game ecosystem tokens. Players will also be able to trade game tokens and NFT assets on platforms such as Opensea.

Axie Infinity is currently the head of GameFi, a pet fighting game. Axie Infinity is a Pokemon inspired universe where anyone can earn AXS through skillful gameplay and ecosystem contributions, according to the white paper on the website. Players can fight, collect, breed and build a land kingdom for their pets.

According to Token Terminal, Axie Infinity generated more than $760 million in transactions in August, accounting for about 83% of total transactions in the entire NFT gaming market. Even crazier, its token AXS rose 1,236.11% in the last three months.

It is worth noting that the prices of NFT game tokens, including TLM, SKILL, SAND, etc. have all increased to varying degrees since July this year.

How is GameFi transforming the traditional game industry?

The most immediate change in GameFi from traditional games is that the ownership of assets is "controlled" by the player.

That's because GameFi games run on a cryptocurrency network, where in-game tokens, NFT and other virtual assets are stored on distributed ledgers that allow players to not only verify ownership of game assets, but also lend them or sell them to other players for revenue.

In addition, GameFi's game items are essentially free-flowing, unlike traditional games where items can only be used in a fixed game. However, the game industry has its own life cycle, which the player cannot control. Therefore, when the game server is down, players will not be able to access its virtual assets.

"GameFi addresses the needs of game teams to finance and survive." GameFi observation reporter hai-bo zhang said, "before the COVID-19, Because the traditional game traffic and resources are monopolized, the game development team had to in order to cater to the capital to do some quick buck, such as in the game design,they will consider cashing in as soon as possible, so there will be many places to squeeze players, so the game life cycle can be shortened greatly, "GameFi will allow more people to get back to making games they love." He describes what he thinks GameFi will look like in the future: "Game developers are the ones who make the rules, who build them; Players are contributors as well as contributors to the value of a game, and the value created by both developers and players should no longer be exploited."

A bottleneck GameFi needs to break

In the future, gamefi still needs to break through different bottlenecks in order to achieve sustainable and benign development.

GameFi is currently unable to compete with established traditional games in terms of gameplay. At present, GameFi is basically equivalent to copying the mature gameplay of traditional games into the GameFi field, plus the business model of Play to earn, and introducing Token and other mechanisms to realize a new gameplay.

How to balance the playability of the game and the high return on investment pursued by players is also a difficulty faced by game developers.For most GameFi players, a high ROI is often more important than "fun". Once the ROI of game design is too high, it is easy to shorten the life cycle of the game; If the design is too low, it will be difficult to attract a large number of users in the coin-sphere, and it will be difficult for users from the traditional gaming space to enter the GameFi space.

It is understood that several teams are also working on new GameFi projects following the market. With more players and new capital coming in, the potential is limitless. But the present is just the beginning, and the future is hard to predict.