In recent years, cryptocurrencies have been gaining more and more space worldwide. One of those spaces is that of video games, which by joining the blockchain give way to what is defined as GameFi: gamification of finance or games with financial gain, which is nothing more than play-to-earn (P2E) blockchain games that offer financial incentives to players.
The word GameFi, corresponds to the acronym of “game” (Game) and “finance” (Phi). It is a mix between gamification, DeFi, NFTs, play-to-earn models (P2E, play to win) and metaverse. Its games, run on blockchain technology, allow its players to receive real-world financial rewards.
The idea is to monetize the gaming sector. Usually, players play the game to receive income such as cryptocurrency rewards and NFTs. To do this, users must complete tasks or challenges, fight against other players, and progress through the different levels within the game.
In GameFi, the reward will depend on the task you execute and the game level the player gets. Additionally, it can come in two forms: as cryptocurrencies or as in-game assets, represented in virtual lands, avatars, weapons, and costumes.
Like most games on the blockchain, it allows players to transfer the elements of the game.”outside the virtual world of the game.
In addition, in a large part of the GameFi projects, the game assets are NFTs that are carried out on the blockchain, in this way, once the in-game reward is obtained, users will be able to exchange their NFTs in NFT markets and their digital currencies. on cryptocurrency exchanges.
Also, the player can invest in NFTs and carry out other in-game transactions.. In other cases, in-game assets must be converted to NFTs before players want to sell or trade them.
One of the main features of GameFi is the play to win (P2E) business model, where players can earn rewards while playing and take control of their assets. This, unlike the usual Pay-to-Play model, in which players have to pay before playing.
Nevertheless, These GameFi projects face difficulties like other cryptocurrency subsectorsand one of them is “the maturity of the sector in general”. Even though some P2E games have been on the market for some time, GameFi, like NFT, DeFi or metaverse, is a very young sector that still needs to mature to become an efficient and secure sector.
The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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