GameFi (game finance) is an innovative combination of decentralized finance, blockchain games, NFT, and one of the hottest trends in the crypto industry today. While many modern games work on the Pay-to-Win model, meaning investments in the game, then GameFi apps use the Play-to-Earn model. Of course, users and investors found this opportunity very attractive.
The concept involves financial incentives for players to progress in games actively. Thus, the player can generate a regular income. Today, we will tell you how to make money on NFT games and GameFi tokens. Let’s get started!
How Does GameFi Work?
The term was introduced 9 years ago by Andre Cronje, the founder of Yearn Finance and the ‘father of DeFi.’ One of the first blockchain-based games with a profit opportunity was CryptoKitties, launched in 2017. GameFi is no longer limited to one technology or platform but covers a wide range of games and areas.
Most GameFi apps are designed for PC, but there are also mobile apps. Often, players must first invest some amount of cryptocurrency to start making a profit. Games of this kind include the following structural elements:
- Play-to-Earn. P2E allows you to earn cryptocurrency in the game by performing certain in-game actions.
- Blockchain-based technology that makes in-game characters or items unique. Thus, they cannot be copied and faked.
- A utility token that is used for rewards, incentives, internal trading operations, or maintaining the project’s value.
The first platforms were built on the Bitcoin blockchain. However, subsequently, the scope gradually expanded and became more complex. Thus, most platforms gradually switched to blockchains specifically designed for dApps: Ethereum, Wax, Solana, Binance Smart Chain, etc. All transactions, purchases, and sales of goods are decentralized, and they are also transparent and fair.
How to Invest in GameFi Projects?
Game blockchain projects and tokens are of interest not only to retail investors but also to corporations. The total value of the gaming sector is expected to exceed $200 billion by 2023. The rapid growth of blockchain games shows that such platforms will take a significant share of this market and allow users to earn money by investing in projects that effectively combine finance with games.
Among the investors is Huobi Ventures, the investment arm of the Huobi crypto exchange, which invested $10 million in a number of gaming projects in September. Earlier in May, Huobi also set up a $100 million fund to finance DeFi and NFT sectors.
In August, the Tron Foundation, led by Justin Sun, announced the launch of their $300 million fund to finance GameFi over three years. The OKEx exchange, in turn, provided $10 million in grants and marketing support for such projects. With such institutional support, one should not doubt the further growth and development of the sector.
This way, users can buy tokens of launched projects and support new platforms by participating in token sales on such IEO platforms as:
- Binance Launchpad
- Bybit Launchpad
- OKEx Jumpstart
Binance also has a Launchpool platform, which makes it possible to get actual game tokens as a bonus reward for staking other assets.
How to Make Money by Playing NFT Games?
Most of the items in blockchain games act as NFT digital tokens, each of which is unique and confirms the ownership of a specific digital item. Usually, these are in-game weapons, characters’ skins, real estate, land plots, and pets.
Finding and receiving such items during the game, players can sell them on marketplaces, exchanging them for cryptocurrency. You can increase the value of items and, accordingly, the earning potential by upgrading characters and creating more rare items.
The use of NFT technology in the gaming industry provides several benefits:
- Players have full ownership of items that cannot be challenged.
- The received items are stored in the user’s wallet as tokens and not on the platform’s servers. Accordingly, they can be sold anywhere, on any marketplace that supports the required token format.
- The process is fully decentralized, and there is no single point of failure. Hence, players do not risk losing their assets due to hacker attacks or technical issues.
Many games also include DeFi components such as yield farming or staking. This means that players can lock certain tokens and earn interest for as long as they are held.
What Do You Need to Start Playing?
To make money on blockchain games and GameFi tokens, you will need the following:
- A cryptocurrency wallet that supports the ability to connect to decentralized applications. The most popular option is Metamask. It works with any Ethereum-based blockchain games, and if you switch the network in the app, it can work with Binance Smart Chain and almost any other blockchains.
- Some amount of cryptocurrency in the wallet account. Usually, the cryptocurrency of the blockchain on which the game is running (ETH, BNB, etc.) is required for initial purchases and later for payment of transaction fees.
- Starter items, characters, pets. You can log in to blockchain games for free. Still, you can join the gameplay only by acquiring some starter items.
Best Projects for Making Money on GameFi
Examples of time-tested blockchain games that can be used to make money on NFTs or tokens:
- Axie Infinity. It is a Pokémon-inspired game where you breed pets, upgrade, and use them to fight against other players.
- Alien Worlds. The player here acts as a space explorer and can choose a planet to mine trilium (in other words, $TLM tokens).
- MOBOX. This platform includes tools for creating games and NFT tokens, their use, and trading.
- My Neighbor Alice. It’s a multiplayer construction game, which includes developing and decorating a farm, interacting with neighbors, and various trading operations.
- The Sandbox. It’s a platform for creating your own games and in-game items, equipped with a powerful but user-friendly editor.
- Decentraland. The project focuses on the social component, where players can create their digital characters and communicate with other users.
- CryptoBlades. This game allows you to fight with other players, equipping your character with weapons and armor and upgrading their skills.
- CropBytes. A blockchain farm that has been operating as a mobile app since 2018. The game enjoyed a new wave of popularity with the launch of its native token.
Relatively new but promising projects also include Genopets, Mines of Dalarnia.
Prospects for GameFi Direction
GameFi has already gained significant popularity, but analysts believe that this relatively new sector still has a lot to come. Thus, Tron founder, Justin Sun, recently stated:
GameFi will be the next big thing that makes the DeFi, NFT, and the larger crypto space easy to understand and be involved in.
Almost every day, new projects are launched, and entire gaming platforms, such as MOBOX, allow people to create blockchain games and NFT tokens on their own. With the influx of new investment, the sector’s potential is endless. Another headlight that may stimulate further growth is the decentralized future that developers are striving for. We will definitely see many more innovations and improvements.
Players who have mastered blockchain games have long been making money by selling characters, weapons, and other NFT items. To do this, you can use both secondary platforms (for example, OpenSea) and in-game marketplaces.
NFT games and GameFi tokens are an inevitable trend in the industry, and the rapidly growing numbers of reach and involvement of players and the market cap of tokens only confirm this.
What is the best NFT game? Feel free to share your favorite ones in the comments below!