GameFi is on the rise
GameFi, gaming fused with finance, is helping with the adoption of NFTs and cryptocurrencies across the world.
2 DECEMBER 2022
How GameFi helps the rise of cryptocurrencies and NFTs
Over the past few years, the GameFi industry has experienced exceptional growth and is drawing interest from investors.
The GameFi business has been one of the main contributors to the explosive growth of the cryptocurrency market over the past few years.
Gamers can earn incentives while playing thanks to GameFi, a combination of the words "financial" and "gaming."
With consistent growth, the market now has a token market cap of almost $9.2 billion. Notably, despite the crypto cold, GameFi networks have endured and thrived. In fact, by 2031, the industry is expected to be worth $74.2 billion.
The GameFi business has been one of the main contributors to the explosive growth of the cryptocurrency market over the past few years.
Gamers can earn incentives while playing thanks to GameFi, a combination of the words "financial" and "gaming."
With consistent growth, the market now has a token market cap of almost $9.2 billion. Notably, despite the crypto cold, GameFi networks have endured and thrived. In fact, by 2031, the industry is expected to be worth $74.2 billion.
GameFi network operation
Blockchain-based GameFi ecosystems employ a variety of in-game economic structures to compensate players. The rewards are often non-fungible tokens (NFTs), which can be traded on significant exchanges. The objects are essential for broadening user experiences and often take the form of virtual regions, outfits, and weaponry.
Each game is different due to the various gaming tactics and economic structures.
The play-to-earn (P2E) model is one of the most often used GameFi economic structures. Users can receive prizes while staying interested because of the model's design.
Players are able to enjoy the games without having to invest any money. However, advancement could be slowed down if there aren't enough resources available to compete effectively. Because of this, players are occasionally compelled to buy in-game products in order to reach higher levels where they can earn more rewards.
Decentraland, The Sandbox, Axie Infinity, and Gala are examples of well-known blockchain gaming networks that use the P2E GameFi architecture.
Each game is different due to the various gaming tactics and economic structures.
The play-to-earn (P2E) model is one of the most often used GameFi economic structures. Users can receive prizes while staying interested because of the model's design.
Players are able to enjoy the games without having to invest any money. However, advancement could be slowed down if there aren't enough resources available to compete effectively. Because of this, players are occasionally compelled to buy in-game products in order to reach higher levels where they can earn more rewards.
Decentraland, The Sandbox, Axie Infinity, and Gala are examples of well-known blockchain gaming networks that use the P2E GameFi architecture.
WHY
GameFi is well-liked
One of the key factors making GameFi so appealing to players is this benefit. Other gamers can lend out some virtual resources, including land. Users can engage in liquidity mining by staking assets if they want to earn money passively without playing games. Retail investors and those looking to make money off of their gaming time have a lot to gain from this.
The reduced transaction fees are another benefit that many GameFi users like. Because cryptocurrencies are frequently used in GameFi setups, fund transactions are generally simple and inexpensive.
When opposed to traditional money transfer methods, which are expensive, especially when it comes to making cross-border transfers, this is a significant benefit.
How GameFi fosters expansion
Because GameFi initiatives use cryptocurrencies to settle transactions, the use of digital currencies has grown significantly in recent years.
The number of unique active wallets (UAW) connected to the blockchain gaming industry increased significantly in the third quarter of 2021, according to a report recently released by DappRadar, a platform that monitors activities on decentralized applications (DApps). These wallets made up roughly 49% of the 1.54 million daily UAWs registered during that time. The information supports the sector-disruptive potential of GameFi and the rising use of cryptocurrencies, which in turn encourages their uptake and use.
The number of unique active wallets (UAW) connected to the blockchain gaming industry increased significantly in the third quarter of 2021, according to a report recently released by DappRadar, a platform that monitors activities on decentralized applications (DApps). These wallets made up roughly 49% of the 1.54 million daily UAWs registered during that time. The information supports the sector-disruptive potential of GameFi and the rising use of cryptocurrencies, which in turn encourages their uptake and use.
Another study report on the subject was recently made public by Chainplay, an NFT game aggregation platform, and it showed that 75% of GameFi investors entered the cryptocurrency market as a result of their involvement in GameFi, demonstrating GameFi's expanding influence on crypto adoption.
"...GameFi has made a significant contribution to the expansion of the NFT market."
In addition to expanding cryptocurrency adoption, GameFi has made a significant contribution to the expansion of the NFT market. NFTs are used more frequently on the blockchain because GameFi largely relies on them for in-game assets. It is not unexpected that the growth of the GameFi market in 2021 closely mirrored the NFT boom.
Sales of GameFi NFT increased from $82 million in 2020 to $5.17 billion in 2021. The sales figures supported the NFT market's expansion.
More investors and gaming companies are drawn to GameFi.
They are placing a bet on the future because GameFi is one of the few sectors that has a chance to get more users over time. He continued by saying that the industry was still in a very early stage and has a lot of space to grow, particularly in terms of innovation.
Currently, as the gaming business develops, major corporations, including well-known gaming companies, are hopping on the GameFi bandwagon.
Powerful gaming companies like Ubisoft are already advancing on the GameFi frontier.
The gaming company formed an alliance with Hedera and the HBAR Foundation earlier this year in order to create Web3 GameFi games for the brand. The wildly successful Far Cry and Rainbow Six series were created by the gaming behemoth.
Another well-known game producer, Zynga, also made plans to release its own NFT-based games at the beginning of the year.
The leader in mobile gaming claimed that in order to create its own library of NFT games, it was striving to assemble a blockchain team and form partnerships with successful blockchain partners.
A number of mainstream technology companies, like the Chinese giant Tencent, have begun making investments in the GameFi market.
The business was recently recognized as one of Immutable's top donors in its $200 million fundraising effort.
The creator of NFT titles like Guild of Guardians and Gods Unchained is Immutable.
The presence of these players suggests heightened competition for a piece of the pie. Long term, this may lead to an increase in GameFi investments and innovation.
Anton Link, the co-founder, and CEO of the NFT rental system UNITBOX, was available to speak with Cointelegraph about this issue.
According to Link, one of the key factors driving investors' frenzied interest in the sector is the industry's extremely encouraging growth metrics. In contrast to other application fields, GameFi enables the immediate implementation of technology, and the sector's growth forecasts and statistics speak for themselves. Additionally, he mentioned that certain game makers were interested in experimenting with GameFi in order to reach a more interested audience.
Anton Link, the co-founder, and CEO of the NFT rental system UNITBOX, was available to speak with Cointelegraph about this issue.
According to Link, one of the key factors driving investors' frenzied interest in the sector is the industry's extremely encouraging growth metrics. In contrast to other application fields, GameFi enables the immediate implementation of technology, and the sector's growth forecasts and statistics speak for themselves. Additionally, he mentioned that certain game makers were interested in experimenting with GameFi in order to reach a more interested audience.
Several issues facing the game-related business
Even if there are a ton of players, investors, and gaming firms drawn to the GameFi sector, there are still several major obstacles to be addressed before it can take a sizable chunk of the entire gaming market.
Security concerns
Recent significant hacks on the GameFi market are likely to have a detrimental effect on consumer perception of the industry.
One of them is the hacking attack on the Ronin Bridge that took place earlier this year. Players of Axie Infinity lost more than $600 million in cryptocurrency as a result. Most recently, a rug pull cost users $3.5 million in the newly released Web3 game called Dragoma.
These are only a fraction of the recorded losses as a result of GameFi hacks and fraud. Such events keep shattering consumer confidence in the sector.
One of them is the hacking attack on the Ronin Bridge that took place earlier this year. Players of Axie Infinity lost more than $600 million in cryptocurrency as a result. Most recently, a rug pull cost users $3.5 million in the newly released Web3 game called Dragoma.
These are only a fraction of the recorded losses as a result of GameFi hacks and fraud. Such events keep shattering consumer confidence in the sector.
Security concerns
Recent significant hacks on the GameFi market are likely to have a detrimental effect on consumer perception of the industry.
One of them is the hacking attack on the Ronin Bridge that took place earlier this year. Players of Axie Infinity lost more than $600 million in cryptocurrency as a result. Most recently, a rug pull cost users $3.5 million in the newly released Web3 game called Dragoma.
These are only a fraction of the recorded losses as a result of GameFi hacks and fraud. Such events keep shattering consumer confidence in the sector.
One of them is the hacking attack on the Ronin Bridge that took place earlier this year. Players of Axie Infinity lost more than $600 million in cryptocurrency as a result. Most recently, a rug pull cost users $3.5 million in the newly released Web3 game called Dragoma.
These are only a fraction of the recorded losses as a result of GameFi hacks and fraud. Such events keep shattering consumer confidence in the sector.
Negative gaming experience
Blockchain-based games also have problems with playability. Even while they let users manage and transfer their in-game assets, their mainstream rivals frequently outperform them in terms of graphics, immersion, and gameplay.
Many blockchain games lack game elements other than "grinding," which is the process of performing repetitive chores to earn assets.
Many blockchain games lack game elements other than "grinding," which is the process of performing repetitive chores to earn assets.
Gamer complaints demonstrate that players still prefer the rich experiences offered by well-known mainstream games to the advantages offered by GameFi, despite the allure of blockchain-based tokens.
Negative gaming experience
Blockchain-based games also have problems with playability. Even while they let users manage and transfer their in-game assets, their mainstream rivals frequently outperform them in terms of graphics, immersion, and gameplay.
Many blockchain games lack game elements other than "grinding," which is the process of performing repetitive chores to earn assets.
Many blockchain games lack game elements other than "grinding," which is the process of performing repetitive chores to earn assets.
Gamer complaints demonstrate that players still prefer the rich experiences offered by well-known mainstream games to the advantages offered by GameFi, despite the allure of blockchain-based tokens.
Technical difficulties
New blockchain concepts frequently go through a number of growing pains. Because many users found the platforms challenging to comprehend and operate, the decentralized financial industry, for instance, encountered many of these issues.
Some of these problems are also being experienced by GameFi. For example, buying and selling NFTs is a difficult process that beginners continue to face.
Technical difficulties
New blockchain concepts frequently go through a number of growing pains. Because many users found the platforms challenging to comprehend and operate, the decentralized financial industry, for instance, encountered many of these issues.
Some of these problems are also being experienced by GameFi. For example, buying and selling NFTs is a difficult process that beginners continue to face.
The industry remains connected to the larger crypto market.
Because GameFi is a part of the cryptocurrency sector, it is impacted by ups and downs in the market for virtual currencies. As a result, activity in the GameFi sector increases during uptrends while it declines during downtrends.
GameFi platform developers must work hard to create captivating games that will help ecosystems withstand market declines if they hope to keep users interested.
Although the endeavor is more difficult said than done, GameFi investors are currently focusing on enhancing gaming experiences to build on sustainability. There are many obstacles for developers to overcome, but if they can draw gamers in with excellent gameplay, the future of blockchain-based gaming is promising.
GameFi platform developers must work hard to create captivating games that will help ecosystems withstand market declines if they hope to keep users interested.
Although the endeavor is more difficult said than done, GameFi investors are currently focusing on enhancing gaming experiences to build on sustainability. There are many obstacles for developers to overcome, but if they can draw gamers in with excellent gameplay, the future of blockchain-based gaming is promising.
The industry remains connected to the larger crypto market.
Because GameFi is a part of the cryptocurrency sector, it is impacted by ups and downs in the market for virtual currencies. As a result, activity in the GameFi sector increases during uptrends while it declines during downtrends.
GameFi platform developers must work hard to create captivating games that will help ecosystems withstand market declines if they hope to keep users interested.
Although the endeavor is more difficult said than done, GameFi investors are currently focusing on enhancing gaming experiences to build on sustainability. There are many obstacles for developers to overcome, but if they can draw gamers in with excellent gameplay, the future of blockchain-based gaming is promising.
GameFi platform developers must work hard to create captivating games that will help ecosystems withstand market declines if they hope to keep users interested.
Although the endeavor is more difficult said than done, GameFi investors are currently focusing on enhancing gaming experiences to build on sustainability. There are many obstacles for developers to overcome, but if they can draw gamers in with excellent gameplay, the future of blockchain-based gaming is promising.
