Play to Earn
GameFi is one of the hottest topics in the cryptocurrency industry right now. Blockchain gaming looks poised to disrupt the global video games market. Titles like Axie Infinity and its more than $1 billion in total in-game asset sales have piqued the traditional gaming industry’s interest — we’re now seeing giants like Ubisoft the GameFi sector.
Blockearth team is consider some popular dynamics for gameplay monetization in existing GameFi titles, including play-to-earn features and asset ownership.
GameFi refers to the financialization of video gaming. Similar to the popular crypto term DeFi, or decentralized finance, GameFi is a fusion of the words “game” and “finance.”
GameFi is a rather broad term, and, as we’ll explain in this article, titles that are considered GameFi may have entirely different financial elements to one another. For example, some blockchain games reward players for completing in-game tasks while others may enable revenue generation from the various assets a player owns.
It is important to note that GameFi is not gambling. The games we consider part of this emerging sector require players to leverage a mix of skill and strategy to generate income. Although luck may be a part of these games, it is not the predominant factor in determining who wins or is eligible for financial reward.
The origins of the term GameFi can be traced back to November 2019, when the founders of MixMarvel, a blockchain game publishing platform, speeches at the Wuzhen World Blockchain Conference in China on how the technology underlying cryptocurrencies could revolutionize the video gaming industry.
Perhaps more famously, however — particularly for western readers — the term was evidently first by Andre Cronje, the founder of Yearn, in a September 2020 tweet. Since then, “GameFi” has been used with increasing regularity to describe games with financial elements enabled by blockchain technology.
Despite the term only entering popular usage more recently, GameFi’s history goes back almost as far as Bitcoin itself. Early Minecraft servers with BTC integrations, the 2013 Gambit.com, titles like Bombermine and peer-to-peer services enabling gamers to monetize mainstream titles with BTC represent some of the earliest efforts in the field that we now consider GameFi. Later, projects like Huntercoin used blockchain technology for more than just payments, enabling players to monetize their gameplay by mining cryptocurrencies.
Ethereum’s 2015 launch presented new opportunities for video game developers thanks to its programming language’s sophistication. It meant programs could be stored and executed on-chain for the first time, enabling the creation of applications. Among them were blockchain games like CryptoKitties, which leveraged the newly defined ERC-721 standard to represent in-game assets in the form of .
In the years since, interest in NFTs has grown and blockchains optimized for performance have been launched, inspiring tremendous innovation in the GameFi sector. Today, we’re starting to see the fruits of these innovators’ efforts, and blockchain gaming is growing at an exponential rate.
GameFi comes in many different forms today. As such, the mechanisms by which players can generate revenue through their gameplay vary. However, there are a few important themes worth mentioning. Many of the most popular blockchain games today use a combination of the following features to monetize the action.
In some blockchain games, players receive financial rewards for completing gameplay objectives. The funds awarded in these play-to-earn titles typically originate from a reserve of native tokens held within a smart contract.
For example, in the hugely popular Ethereum-based game Axie Infinity, a portion of the game’s is reserved to reward the following behaviors:
- Winning battles and tournaments
- Tending your plot of land
- Trading on the Axie Infinity marketplace
- Breeding Axies
Central to many blockchain games today is the concept of ownership of scarce digital assets. Bitcoin introduced digital scarcity via the blockchain, and NFT technology expanded on it. NFTs can represent all manner of assets — both digital and physical — including in-game items.
Digital ownership of unique assets creates economic opportunities that were not possible before. For example, in CryptoKitties or Axie Infinity, players can breed two creatures represented by NFTs to create a third creature. They can then leverage a title’s play-to-earn capabilities with this new asset, sell it or lease it out for other gamers to use, splitting any revenue generated between owners and borrowers.
Although not exactly games in the strictest sense, online virtual worlds — — also enable their inhabitants to monetize their time via asset ownership. At the heart of spaces like Cryptovoxels, The Sandbox and Decentraland is the concept of land ownership, and these plots trade freely on secondary markets.
Owners can monetize their plots in much the same ways that they can in the physical world. In addition to outright selling owned land, they can develop an attraction that may generate revenue, or lease it out for someone else to monetize. Walk around one of these shared virtual spaces and you’ll see various efforts to monetize land. Examples include casinos, virtual shops and concert venues.
Interestingly, these worlds are starting to see the beginnings of economies emerging. For example, in March 2021, the Tominoya Casino in Decentraland real people to greet punters on arrival and act as general support staff. This is a trend that many see continuing. Some even estimate that the “metaverse economy” will eventually dwarf the real-world one as people take advantage of new presented by these virtual worlds.
Some GameFi projects introduce concepts from the DeFi sector to reward gamers. Concepts like yield farming, liquidity mining and staking will be familiar to anyone with DeFi experience and can provide a passive means to generate income from a blockchain game. If you’re new to DeFi, you can learn more about it and concepts that overlap with GameFi in our .
Blockearth is a publishing platform that continues to develop in GameFi, where various mechanisms exist, focusing on a stable ecosystem and solid rewards, and will reach users with various genres and games.