GameFi: A Quick Overview
One of the hottest buzzwords in the crypto and gaming world right now is GameFi or Play-to-Earn. Just like other blockchain-based trends, GameFi is shaking up the traditional gaming industry as it combines Blockchain technology with DeFi and NFTs.
GameFi games also assume different forms that set them apart from traditional gaming. The success of Axie Infinity and Decentraland has piqued the interest of several stakeholders.
Web 3.0 forms a major underlying technology of the GameFi industry and is also based on blockchain technologies. Although the concept of Web 3.0 has been around since 2014, it didn’t blow up until 2021. GameFi and Web3 will definitely be some of the most significant trends in the crypto/blockchain space in 2022.
On this bog post, we’ll cover:
- What is the GameFi technology.
- How you can earn from it.
- How to Get Started.
- GameFi on the RSK Network.
What is GameFi/Play-to-earn?
History of GameFi
How Does GameFi Works?
GameFi and Web3
What is Web3?
The problem with the Centralized Internet (Web 2.0)
GameFi and DeFi
GameFi and NFT
How to Get Started With GameFi and Play-to-Earn
Get a Decentralized Wallet
Buy Beginners Item
Top GameFi Projects
The RSK Network & GameFi
What is GameFi/Play-to-Earn
GameFi, like its name implies, refers to the gamification of financial systems that allows you to create profit from playing play-to-earn crypto games. GameFi gaming projects are developed and run using smart contracts on a blockchain. Therefore, you’re the verified owner of the virtual items you acquire while playing the game. Unlike traditional gaming, where you play to win, with Game-Fi, you play to earn.
A major goal of GameFi is to solve the lack of transparency which is a major problem within the traditional gaming industry. Please keep in mind that GameFi is not gambling. You must leverage your skills and strategies to earn rewards and NFTs.
History of GameFi
The term “GameFi” was first used in a September 2020 tweet by Yearn co-founder Andre Cronje. However, the concept started at the 2019 Wuzhen Blockchain Conference in China in November 2019.
At this conference, the founder of MixMarvel discussed possibilities of how cryptocurrencies could revolutionize the gaming industry. More broadly, the history of GameFi goes back as far back as the creation of Bitcoin in 2008. Some of the earliest efforts in GameFi include:
- BTC integration on the early Minecraft servers in 2013.
- Gambit.com in 2013.
- Peer-to-peer services and titles like Bombermines that allowed gamers to monetize mainstream titles with BTC .
- Blockchain projects like Huntercoin that used blockchain technology to allow users to mine cryptocurrencies when playing games.
Although the early GameFi projects used the Bitcoin blockchain, the lack of speed and the cost of transactions were significant problems. The launch of the Ethereum network in 2015 opened up new possibilities for blockchain games. Soon, most gaming projects started adopting smart-contract-enabled projects on the Ethereum network.
Among the first Ethereum blockchain games was CryptoKitties. However, the lack of block space affected the performance of most games. In 2017, CryptoKitties became so popular that it congested the Ethereum network causing gas fees to skyrocket.
How Does GameFi Work
GameFi is a combination of three concepts:
GameFi titles adopt a play-to-earn model that rewards players for completing a task, unlike the traditional gaming model.
The traditional online games make money through affiliate marketing, ads and in-app purchases. As a player in these games, you usually need to spend money to win or get an edge in the game. The bad thing about that is that spending goes to game developers and all the in-game coins you amass have no value outside the game.
GameFi is here to revolutionize this by creating a distinct play-to-earn model that balances financial reward and gaming. The GameFi native tokens are often stored in a smart contract. A portion of the token is awarded for completing in-game challenges or activities.
Real-World Value on In-app
Blockchain technology allows gamers to add real-world value to their in-app purchases or rewards. That is, you can trade your in-app items like your NFTs and coins for cryptocurrencies and, in turn, actual cash. This sets a radical shift as regular games allow digital ownership that’s not valuable outside the game.
With crypto gaming, you purchase your items directly from the game with cryptocurrencies. You can also sell/swap any time to get your monetary value back.
Little Cost to Play
Most GameFi titles are available to download and play for free, making them more accessible. You don’t need to purchase the game to get started like most traditional gaming titles.
Security and Constant Ownership of Gaming Assets
Blockchain-based crypto games are secured by blockchain technology. Unlike the traditional gaming experience, you can be sure you won’t lose all your assets in a hacking incident. Also, all your assets are stored on a blockchain for life. Simply put, you can’t lose your gaming progress due to a glitch or mistake.
GameFi projects usually adopt a simple and easy-to-learn gameplay mechanism that makes learning easy for everyone.
GameFi and Web3
The main idea behind Web3 is to create a web that is less reliant on central bodies (the big tech companies). Web3 will achieve that by transitioning the World Wide Web as we know it (Web 2.0) into blockchain technologies.
What is Web 3.0?
Think of Web3 as a decentralized Internet. Just like DeFi (Decentralized Finance), decentralized Internet will bypass central authority and give you complete control over your data online. Web3 will remove the need for intermediaries and allow users to connect directly to the Internet.
All you need is a wallet to interact with Web3 applications (Dapps). Your wallet contains your private key, which you’ll use to sign transactions. This transaction is then checked, confirmed and processed to form an immutable block on a blockchain. Web3 is trustless and permissionless.
The Problem With Centralized Internet
Web 2.0, the Internet, relies on the systems and servers owned by the big tech corporations. As a result, only a few companies have control over the information and the power of the Internet. Although Web 1.0, the first iteration of the Internet, allowed users to connect directly to each other, it had its share of problems.
Firstly, it was read-only and just too simplistic. Only a few people could actively create content. The rest of the users simply consumed the static and boring content. The problem with Web 1.0 was that the users were too passive, and the barrier to entry was high.
Web 2.0 came along with promises of inclusiveness and a lower barrier to entry. The low cost of computing has reduced the costs of collaborating and exchanging information for many new media and entertainment. However, the Internet still needs intermediaries, just like a centralized financial system needs banks and governments.
That poses a big problem because intermediaries collect our data and centralize control. The intermediaries extract a vast amount of data from users (data mining) and monetize it. The Internet, as we know it, also faces other problems like insecurity of users’ data. The concentration of users’ data in a few companies causes single points of failure that make data vulnerable and enables governments to spy on users through surveillance and enforce censorship.
A different type of Internet is required not only to enhance the experience and privacy of end-users but also to remove tech taxes and reward users directly. That’s exactly what GameFi is all about.
GameFi and DeFi
GameFi incorporates several concepts from DeFi to reward players. Also, it uses several DeFi features to help players generate passive incomes. Therefore, people with DeFi experience will have little to no problem adapting to the financial/payment systems on GameFi. Here are some of the common DeFi concepts you can expect to see in GameFi titles:
- Yield Farming
- Liquidity mining
GameFi and NFTs
GameFi uses NFTs technology to represent all kinds of in-game items. The central idea of many blockchain games is the concept of scarce digital assets. NFTs also allow players to monetize their in-game assets in real life. You can either sell your assets or lease them to other players to use and generate revenue. Additionally, NFTs can be used as collateral with some DeFi projects.
How To Get Started With GameFi and Play-to-Earn
Although gaming requirements will vary for different game titles, all GameFi titles require some basic things to start. This section will cover what you need to begin your crypto gaming experience.
1 – Get a Decentralized Wallet
You need a crypto wallet to start anything on GameFi. Your wallet will store your crypto/NFTs and allow you to function in the gaming world. Keep in mind that several wallets are available and not all are compatible with all game titles. So, before you set up any wallet, ensure that it is compatible with your game title. You need an Ethereum compatible wallet like MetaMask or Defiant Wallet for most titles.
Lastly, you need to connect your wallet to your crypto game to start using it.
2 – Fund the Wallet
The next step is to fund your decentralized wallet with cryptocurrency. You might need to buy some assets for some games to enjoy your gaming experience at the fullest. What you’ll use to fund your wallet depends on which cryptocurrencies the game title supports as you may have to use the game’s native token for some games.
For example, to buy AXS or SLP coins (the native tokens of Axie Infinity), you need to first buy BTC, ETH, or RBTC. After which, you can exchange these for AXS or SLP.
3 – Buy A Beginner Starter Pack
For most cryptocurrency games, you need to buy some assets to start and enjoy your gaming experience. Therefore, you’ll need to identify the essential assets you need to start. Once you’re sure of what you need to start, you can buy them directly from the game’s marketplace from your wallet.
Top GameFi Projects
Axie Infinity is one of the most popular GameFi projects, with over one million active users and $1 billion in token sales. The crypto game is supported by two native tokens – AXS( Axie Infinity Shard token) and SLP (Smooth Love Potion).
CryptoBlades is one of the top blockchain games with over $5 million market cap. It is a competitive game that is rendered in RPG settings. The game’s native token is $SKILL (a BNB-based token). Players play to earn SKILL tokens during gameplay.
Forest knight is one of the first mobile blockchain games. The game is a turn-based RPG that allows players to earn rare NFTs as they fight off evil forces. The game currently offers three NFT items – accessories, skin, and weapons. Forest Knight currently has a market cap of over $1 million.
Why RSK Network is great for GameFi
Through RSK, the Bitcoin network is open to endless applications, including:
- Decentralized identities.
- Decentralized storage.
- Near-instant payments.
RIF (RSK Infrastructure Framework)
RIF services provide everything you need to build a decentralized GameFi project. RIF serves as building blocks for building a fully decentralized internet. RIF puts users in control of their internet interactions and data through DSE (Decentralized Sharing Economies).
With RIF tech-stack, developers and users can:
- Protect identities and personal information.
- Communicate online without fear of surveillance and censorship.
- Make and receive secure payments.
- Store and share data safely.
- Transact directly with service providers.
- Use gateway services to carry out off-chain activities.
Here is a rundown of the RIF services and how they can help build your project:
RIF Identity uses smart contacts to provide users with the power to create and define their online identities. RIF Identity is divided into two components:
RNS allows users to use personalized identities to identify themselves instead of complex and unmemorable addresses. rLogin enables users to log in to different platforms without needing different identities and passwords.
The RIF payments protocol enables users to make fast and low-cost off-chain payments.
RIF storage offers a unified interface connecting several decentralized storage solutions for seamless file storage and sharing between users. RIF Storage gives users complete ownership of their files and data.
RIF Gateways enables cross-chain integrations for users to securely interact with off-chain events. RIF Gateways has already integrated Chainlink into RSK’s Testnet, with the Mainnet release imminent.
RIF Communications offers a means of online communication that is private, encrypted, and strictly peer-to-peer. The messages cannot be tampered with in any way or accessed by a third party.