How Gamers Can Yield Maximum Returns on GameFi
- GameFi networks evolved into one of the hottest trends in the crypto space.
- Meta DAO Guild developed MetaRent to allows players to earn income on P2E games.
- The public sale of Meta DAO’s token (MDGG) is slated to commence on April 10.
According to DappRadar, the number of blockchain games rose to more than 544 at the end of 2021 compared to 200 during the previous year. Most of these games are relatively basic, but the industry is attracting the attention of venture capitalists who have poured more than $4 billion last year to support efforts like Forte, which avails tools to create P2E games.
The result of this increased investment in blockchain games could be the rise of so-called AAA-quality games. These games are expected to have more substantial graphics and more exciting gameplay than the current lot of games. Additionally, they offer the potential for greater income generation for users.
In a short span of time, GameFi has evolved into one of the hottest trends in the crypto space and seeks to disrupt the lucrative $175billion video games market. GameFi establishes a virtual space where cryptocurrency, blockchain, game mechanics, and NFTs are integrated, and players can earn monetary rewards.
How does GameFi work?
The term GameFi is derived from “gaming” and “finance.” More specifically, GameFi represents the marriage between video games and decentralized finance. The CEO of Yearn Finance, Andre Cronje, is the originator of the term having tweeted it in 2020. Subsequently, GameFi has been actively used to mean video games integrated with decentralized finance backed by blockchain technology.
GameFi is effectively a “play-to-earn” (P2E) model where players are rewarded with economic incentives as they advance in the stages of the games. These blockchain-based games can also integrate defi tools like landing pages, farming, loans, and algorithmic stablecoins.
Gaming objects like land, skins, weapons, etc., are predominantly in the form of NFTs and are situated on the blockchain’s distributed ledger, meaning that all objects that players acquire become fully vested as of their property.
While there is variation in the mechanics upon which GameFi projects are built, the general trend is those game items are built as NFTs. Game items may be in the form of avatars, skins, land, gold, weapons, and even pets.
The prime advantage of this system is that for any in-game items acquired, players can prove full ownership. These NFTs, aside from being used in the game, may also be traded for profit on NFT marketplaces or exchanged for other crypto coins.
GameFi Projects
CryptoKitties
CryptoKitties is built on the Ethereum blockchain and involves players collecting and breeding cute cats, each of which is unique NFTs and can be sold for profit. In late 2017, CryptoKitties gained massive popularity and attracted so much traffic that it clogged up the Ethereum network, bringing it to its knees.
The most expensive CryptoKitty ever sold to date is “Kitty #896775”, also known as Dragon, which sold for 600 ETH valued at about $172,000 at the time.
Axie Infinity
Axie Infinity is one of the most popular GameFi games, described as Pokémon meets CryptoKitties. Users breed, train, and collect cryptographically unique Axies, earning the in-game token called “Smooth Love Potions” (SLP). Players generate income by selling the SLP tokens on Uniswap.
More seasoned players for whom higher risk is palatable in exchange for higher returns engage in trading the Axies themselves. Selling Axies could turn out to be quite lucrative as rare Axies have sold for as much as 60 to 90 ETH, with the biggest Axie sale clocking 110 ETH.
Decentraland
Decentraland is a 3D virtual world that allows users to purchase virtual plots of land in the form of NFTs using its native token, MANA, and is established on the Ethereum blockchain. Players of Decentraland can explore, interact with other players and play various games in this virtual realm.
Players can improve their land, similar to Minecraft, such as by erecting buildings to raise the value of their property. Most notably, a plot of land on Decentraland recently sold for $2.4million.
Ways to Earn Real Money on GameFi Projects
Unlike traditional video games, where players risk losing their investments at any time if the game publisher is wound up, GameFi stores players’ assets on the distributed network. The distributed network operates independently of any single organization, thereby significantly reducing the risk attached to the assets.
Players receive monetary rewards in the form of the respective token of the particular game they are playing. These rewards are often for completing tasks in the game, such as winning battles, growing virtual crops, or even mining precious resources. In some GameFi apps, users may also earn passive income by letting other players mine their virtual real estate. Additionally, players can earn income in the form of interest by using DeFi techniques to lend their digital assets or staking them.
Across all GameFi platforms, players must own a cryptocurrency wallet to store the project’s tokens or NFTs. Before you start, many GameFi projects require you to buy starter characters, making it a necessity that your wallet is preloaded with cryptocurrency to make those initial purchases. These NFTs, depending on the game in question, may turn out to be quite expensive, making it difficult for players who want to play to earn but are unable to cough up the cash upfront.
Meta DAO Guild is developing a unique platform, MetaRent, which allows players seeking to earn income on P2E games, but unable to afford the NFTs required to rent NFTs from other users in exchange for a portion of the reward. The Guild is organized into clans, and it lends them NFTs and supports them in their functions of player training and community management. The public sale of Meta DAO’s token (MDGG) is slated to commence on April 10th, with 45,000,000 tokens valued at $0.067 each expected to be up for grabs.
Dedicated gamers can earn a substantial amount of income from online gaming. For instance, in the Philippines, gamers of Axie Infinity- a dApp on the Ethereum chain where users breed, raise, battle, and trade critters are known as Axies- report earning up to $206 per week playing the game. This may not seem like much to the average crypto investor, but it was enough to make ends meet for these players, especially during the pandemic’s harshest periods.
Conclusion
GameFi tokens are, as expected, subject to the same volatility common to cryptocurrencies not pegged to a traditional currency. If a project gains popularity and demand spikes, the value of the tokens grows, making even the most modest of winnings grow significantly; early players of a game stand to benefit from the FOMO of a popular game. However, it is worth noting that keeping volatile assets might mean very steep gains and losses.
Decentralized finance and asset tokenization are swiftly gaining popularity, and GameFi has benefitted from this since it incorporates these functionalities. GameFi projects are also relatively more easily scalable since they do not require serious hardware or investments to participate. However, with the soaring popularity, debates have broken out over whether GameFi will remake the gaming industry or will just be another way to part the gullible from their money.
Read more: https://coinquora.com/how-gamers-can-yield-maximum-returns-on-gamefi/
Text source: News – CoinQuora – Latest Cryptocurrency and Block
