How GameFi Сontributes to the Growth of Crypto and NFTs
GameFi is a cooperation of gaming and finance. Thanks to this combination, gamers can receive rewards while playing the game.
The GameFi market is steadily growing. Currently, it has a token market capitalization of $8.34 billion. GameFi continues to grow despite the crypto winter. The industry is projected to reach $74.2 billion by 2031.
GameFi ecosystems are based on blockchain technology and use various in-game tools to reward players.
Often such a tool is NFTs, which can be exchanged on the main trading platforms and exchanges for other cryptocurrencies and fiat.
NFTs are presented in the form of virtual lands, costumes and weapons and play an important role in the plot of the games.
The difference in game strategies and economic incentives makes each game unique.
One of the most popular GameFi models is the play-to-earn (P2E) model, designed to keep users interested by allowing them to receive rewards.
This allows players to enjoy the games without spending any money. However, to reach the upper levels, and to bypass competitors and rivals, sometimes an investment is required.
Popular blockchain gaming networks using the P2 GameFi model include Decentraland, The Sandbox, Axie Infinity and Gala.
Advantages of GameFi
Today, the industry attracts
more than 800,000 players daily.
One of the advantages of GameFi is the ease of trading digital assets. A recent report by CoinMarketCap showed that about 75% of gamers are ready to exchange their in-game assets for another fiat or cryptocurrency.
Another advantage that many GameFi players appreciate is low commissions in blockchains, simple and cheap transfers.
The advantages of GameFi include the creative approach used in creating games. In a 2021 BGA survey, 47% of respondents named creativity and gameplay as one of the main reasons they liked GameFi.
According to the DappRadar report, the number of unique active wallets (UAW) tied to the blockchain gaming sector increased in the third quarter of 2021 for approximately 49% to 1.54 million daily UAW registered during this period.
According to the Chainplay report, 75% of GameFi investors entered the crypto market due to their participation in GameFi. These figures demonstrate the growing influence of GameFi on the introduction of cryptocurrencies.
GameFi NFT sales rose to $5.17 billion in 2021, compared to $82 million recorded in 2020. Sales figures helped strengthen the growth of the NFT market.
According to the Footprint Analytics report, gaming companies on the blockchain have collected more than $ 13 billion. More than $3.5 billion of this amount was raised during the first half of 2022.
Prominent gaming giants such as Ubisoft are already participating in GameFi. This year, the gaming firm announced a partnership with Hedera and the HBAR Foundation to develop Web3 GameFi games for the brand.
Zynga, a mobile gaming giant, announced plans at the beginning of the year to introduce its own NFT-based games. The company is working on creating a blockchain team and forging alliances with experienced blockchain partners to develop its own collection of NFT games.
Tencent, a Chinese multinational technology company has started investing in the GameFi sector and has become one of Immutable`s main fundraising sponsors of $200 million. Immutable is the developer of the Gods Unchained and Guild of Guardians NFT games.
Problems of GameFi
Despite such significant growth, GameFi also has problems. One of the most well-known problems of GameFi is hacking platforms and stealing funds.
Among them is the Ronin bridge hacker attack, which led to Axie Infinity players losing more than $600 million in cryptocurrency.
A Web3 game called Dragoma crashed, causing users to lose $3.5 million.
GameFi`s problems include the lack of user experience and weak mechanics, which is explained by the novelty of GameFi technology, as well as the lack of legal regulation.
That is why the status of the entire industry is not defined. And the uncertainty of legal regulation leads to fraud in this area and the lack of protection of players in the event of fraud and hacking.
The lack of legal regulation leads to the absence of investors. The novelty of the technology and the lack of experience leads to a large number of problems and scares off potential investors.
Developers face a lot of challenges, but if they manage to attract players with first-class gameplay, the future of blockchain-based games looks brilliant.