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GameFi Protocol has become one of the hottest topics lately in the cryptocurrency industry. Blockchain gaming seems confident to disrupt the global video market worth $175 billion. Various titles such as the Axie Infinity and its over $1 billion in total in-game asset sales have offended the interest of the traditional gaming industry. With this we are now seeing companies such as Ubisoft entering the GameFi sector.
This article is completely focussed on the basic concept of GameFi Protocol to those who are still not familiar with the concept. We will also cover the origin of the blockchain gaming, some popular dynamics for the gameplay monetization in the existing titles for GameFi, including the asset ownership and pay-to-earn features. Additionally, we will also include the most popular networks on which the blockchain games have been built and the GameFi titles that you can play right now.
What Is GameFi?
GameFi is a popular cryptocurrency term quite similar to DeFi or Decentralised Finance and refers to the financialization of video gaming on blockchain. It is a fusion of two individual words “game” and “finance”.
Rather than just this, GameFi Protocol is a broad term and the titles that are considered GameFi might have entirely different financial elements to one another. For instance, some blockchain games reward the players for completing the in-game tasks while the others might enable the generation of revenue from the various assets that a player owns.
However, it is quite important to note that the GameFi is not gambling. The games that are a part of this emerging protocol require the players to influence a mix of the strategy and skill in the bid to generate income. Although good luck might be a part of these blockchain games, it is not a predominant factor in determining who is eligible for the financial reward or who wins.
History Behind GameFi Protocol
The origination of the crypto term “GameFi” can be traced back to the year 2019 (November to be precise), when the founders of a blockchain game publishing platform named MixMarvel delivered their speeches at the Wuzhen World Blockchain Conference in China. The speeches mentioned how the technology underlying the cryptocurrencies could revolutionise the complete video gaming industry.
For the western readers perhaps, the term had been most evident when it was first used by the founder of Yearn, Andre Cronje in his September 2020 tweet. GameFi Protocol has been used massively since then and regularly used to describe the games with the financial elements that are enabled by the blockchain technology.
Despite the fact that the term has solely entered the popular usage most recently, the history of GameFi rides back to almost as far as the introduction of Bitcoin itself. The early Minecraft servers possessing the Bitcoin (BTC) integrations, the 2013 Gambit.com, the titles such as Bombermine and peer-to-peer (P2P) services permitting the gamers to monetize their mainstream titles with bitcoin represents some of the earliest efforts in the field that we currently consider to be GameFi. Later, projects such as Huntercoin had used the blockchain technology for over just payments allowing the players to monetize their gameplay through mining cryptocurrencies.
The 2015 launch of Ethereum had also offered brand new opportunities for all the video game developers with the sophistication of the programming language. This means that the programs could be stored as well as executed on-chain for the very first time helping in the application creation. Amongst them had been the games such as CryptoKitties that leveraged the newly defined ERC-721 standard for representing the in-game assets in the form of Non-Fungible Tokens or NFTs.
Since then, the interest in NFTs have grown tremendously and blockchains had been optimized for the performance have been launched. This has inspired enormous innovation in the GameFi sector. Currently, we have started to see the results of the efforts of the innovators as well as the exponential growth of blockchain gaming.
How Do The GameFi Protocol Games Work?
In today’s world, GameFi Protocol is available in a variety of forms. As such, the revenue generating mechanisms of the players via their gameplay also equally varies. However, there are a handful of important themes that are worth mentioning. Today, many of the most famous games on the blockchain make use of the combination of the following features for monetizing the action.
Asset Ownership
The concept of ownership of scarce digital assets is at the centre of most of the current blockchain games. Bitcoin introduced digital scarcity through the NFT technology and the blockchain has expanded on it. NFTs can also represent all kinds of assets in both physical and digital formats including the in-game items.
The digital ownership of the unique assets create economic opportunities that had not been possible earlier. For instance, in the games such as Axie Infinity or CryptoKitties, the players get the opportunity to breed two creatures that are represented by the NFTs for creating a third creature. Then, they can leverage the title’s play-to-earn capabilities with the new asset, lease it out to the other gamers to use or completely sell it. This splits any revenue that is generated between the borrowers and the owners.
Although dissimilar to the games in the strictest sense, the online virtual worlds, most popularly known as the metaverses additionally enables their inhabitants to monetize their time through the asset ownership. At the centre of the spaces such as The Sandbox, Cryptovoxels and the Decentraland is the concept of the ownership of land while these plots freely trade on the secondary markets.
The owners can also monetize their plots in the same manner as they can do in the physical world. In addition to the outright selling of the owned land, they can also develop an attraction that might generate revenue or even lease it out for someone else to monetize. If you walk around one of these shared virtual spaces, you would be able to check out the various efforts to monetize the lands. Some of the examples include virtual shops, casinos and concert venues.
It is quite interesting that these worlds are beginning to see the initial phase of economies that are emerging. For instance, back in March 2021, the Tominoya Casino in Decentraland had hired real people to greet the punters on arrival and also act as general support staff. This is quite a trend that many people see to continue. Some people have even estimated that the “metaverse economy” will finally dwarf the real-world one as people start taking advantage of the new opportunities that are offered by these virtual worlds.
DeFi Features
Some of the GameFi projects introduced the concepts from the DeFi sector in order to reward the blockchain gamers. With the DeFi experience, the concepts like staking, liquidity mining and yield farming will be familiar and it can offer a passive means to generate the income from the blockchain game. If you are completely unknown to DeFi, you must learn more about the same. Some of the examples of the blockchain games leveraging features that are more commonly found in the DeFi includes Nine Chronicles, Aavegotchi and Axie Infinity.
Play-to-Earn
In some of the blockchain games, the players acquire financial rewards for completing the gameplay objectives. The funds that are awarded in these play-to-earn titles usually originate from a reserve of the native tokens that is held within a smart contract. For instance, in the heavily popular Ethereum (ETH) based game called Axie Infinity, a portion of the AXS token of the game is reserved for rewarding the below mentioned behaviours:
- Breeding Axies.
- Lending your plot of land.
- Trading on the Axie Infinity marketplace.
- Winning the battles and tournaments.
Top Protocols Of GameFi
Even though the first GameFi titles had been used in the Bitcoin Blockchain, the most modern blockchain games can be located on the smart contract enabled networks. Of these, Ethereum was the very first and still remains the most popular for the gamers and developers alike.
Yet, ETH is optimised for the decentralisation and the security over the performance. Since the block space of Ethereum is limited, all of those requiring the fastest settlement times should incentivize the miners for including their transaction through the included fee. When the demand surpasses the amount of available blockspace, the cost of quick transactions also rises where some users get priced out. This represents a serious issue for the blockchain game developers. A game simply will never enjoy the user base of the mainstream titles if numerous actions that the players take need an exorbitant transaction fee.
Thus, several developers are currently shifting away from the base layer of Ethereum towards the faster and higher-capacity networks. Some of the examples include:
What Is A GameFi Launchpad?
GameFi launchpad is described as one of the top gaming IDO platforms possessing the best ROI. The platform is exclusively for the blockchain game players, investors and shareholders having an engaged curiosity regarding the world of NFT gaming that operates mostly on a play-to-earn concept. The framework is a digital NFT gaming worldwide market where the games are eligible to take part in the famous play-to-earn game projects, the investors can put their funds and the new NFT game designers can also enrol their innovative games for the greater exposure.
How To Play GameFi Blockchain Games?
You have to keep this in mind that each of the blockchain games are different. Thus, we are capable of solely providing the general guidance on how you can get started with GameFi Protocol. If you seek more advanced help, then you just consult the documentation of the relevant games.
Step 1: Create A Web 3.0 Wallet
Similar to most of the popular web applications of the current day, mostly the blockchain games do not make use of the traditional username and password account system. Instead, a user can identify themselves to the game making use of the Web 3.0 wallet.
The wallet that is required to play the game highly depends on the network on which the game has been hosted. For instance, in order to play Axie Infinity, the users are required to possess an Ethereum-compatible Web 3.0 wallet such as metamask or OKX wallet.
Step 2: Obtain Any Assets That Are Required To Play
Most of the blockchain games require the ownership of one or more in-game assets before they allow you to play. For instance, if you want to play Axie Infinity, you are required to possess at least three Axies in your Web 3.0 wallet. The other titles might require the purchase of an in-game digital currency. In most of the cases, you can also purchase the said cryptocurrencies in a crypto exchange such as OKX or via the game itself.
Step 3: Log In Through Your Web 3.0 Wallet
Most of the popular game titles of today are played in your browser. Thus, you are required to login making use of the Web 3.0 wallet that you have created earlier to join the action. For doing so, you have to visit the game’s relevant website and look for the option to connect your wallet. Your wallet will also ask you to confirm the action by signing a message from the website. The best part is that the wallet itself creates the signature and you can simply confirm it by clicking on the “Sign” button.
As we have mentioned earlier, your Web 3.0 wallet will perform as your account and any of the progresses that have been made will be saved through your wallet. It also works as your item inventory and based on the interoperability, any of the assets held may be used to play the game.
Decentralising GameFi Protocol With The Help Of DAOs
Usually, video game development has been very centralised. A studio will design, produce as well as publish a title, taking the responsibility for any of the future updates. However, several GameFi projects seek to extend the decision making to the game players themselves.
The mechanism by which the players achieve this is regarded as a decentralised autonomous organisation (DAO). In the DAO, the token holders can produce and vote on the project update proposals. Many times, these proposals will have a direct impact on the monetary features of the title. For instance, the DAO might vote to raise the reward for a specific action within the game as a means of promotion.
In order to join a GameFi DAO, you are first required to own a governance token of a project. Mostly, the number of tokens held is directly proportional to the voting power of a member. Usually, the largest stakeholders possess the loudest voices considering the steering of a project’s direction.
Some of the games even possess their own native DAOs or Decentralised Autonomous Organisations. One of the best examples is the multichain title, Alien Worlds, having six DAOs where each represents a different planet in science fiction and massively multiplayer online role playing games or MMORPG.
Amazingly, some of the GameFi DAOs are not specific to a particular title. The projects such as Yield Guild Games seek to harness the value from the various play-to-earn blockchain games for their members. The main DAO of YGG and its title specific sub DAOs pool in-game assets, permitting the gamers to take them into games in the bid to generate income for the collective.
What Are The GameFi Titles That You Can Play Right Now?
Each of the GameFi titles that are detailed below in the GameFi collection is available for playing right at this moment. It also offers innovative ways to monetize the time that is spent in game. From the concepts that are borrowed from the decentralised finance to the asset ownership through the NFTs, the play-to-earn dynamics are becoming increasingly creative and also offer new opportunities for the developers and the gamers alike.
1. Axie Infinity
The Axie Infinity blockchain game is a Pokémon-inspired game where the players are able to collect, battle, trade and breed the digital creatures that are known by the name Axies. The title had been created back in 2018 by a GameFi startup named Sky Mavis. In August 2021, the game became the very first blockchain game that surpassed the $2 billion in the total in-game asset sales.
Similar to the other play-to-earn titles, many of the in-game items of the blockchain game are represented by the NFTs. The gamer is first required to acquire a team of at least three Axies from the marketplace to begin playing. Each of the Axies possess individual skill sets and attributes and they are also priced in accordance to these variables. The players can also acquire additional Axies via the marketplace or through breeding.
In the Axie Infinity, there are mainly two in-game GameFi crypto. The very first is the Axie Infinity Shards (AXS), which is an ERC-20 token that is used within the governance system of the game. The AXS holders can also participate in the decision making and additionally claim their rewards through staking. The other Axie Infinity in-game currency is known as the Smooth Love Potion (SLP). The SLP is awarded to the players of the blockchain game throughout the game for winning the battles and also completing the daily quests. However, breeding the Axies also requires SLP that creates demand for the currency.
There are a couple of various game modes in the Axie Infinity. The Adventure mode is played against the computer where the gamers take on various quests to level up their Axies earning rewards. The players also get an opportunity to pit their Axies against the others in the Arena Battle Mode. Both the modes include turn-based battles and the strategies arise from the formation in which your Axies enter the battle and each attacks can perform and you are eligible to see the strengths and weaknesses of the opposing team.
Originally, the game was launched with its on-chain elements on the Ethereum blockchain. However, provided the expensive transaction fees of Ethereum, the game developing startup Sky Mavis had developed a side-chain implementation known as Ronin to host the game. In April 2021, the players had been encouraged to migrate their assets of Axie Infinity to the newly formed side-chain for benefitting from the faster transaction settlement times as well as reduced network costs.
What Forms Axie Infinity GameFi?
✔️ The in-game asset ownership and the permission to trade via NFTs.
✔️ Daily quests, winning the battles and progressing via Adventure Mode reward players with the assets that have a value outside the Axie Infinity World.
✔️ Land that is represented by the NFTs can also be traded as well as monetized by harvesting, building on it or mining.
2. Celestial
Celestial can be well defined as a space exploration role-playing game set available across the multiple galaxies of an expansive meta-universe and are built making use of the Unity Engine.
Initially, the players can connect to the game using OKC, BSV and Ethereum networks. Each of the networks represent a different galaxy and travelling between them requires the use of the galaxy gateways. There are also plans to introduce the additional networks and also create a dedicated GameFi blockchain to act as a relay chain between those that supported blockchains.
In each of the galaxies are clusters and within each of the clusters planets are located. The gamers in this game are known as commanders who can do a lot of tasks such as explore the universe, battle with other players, mine resources and also colonise the land parcels on planets.
Similar to the other GameFi Protocol titles, most of the in-game items of Celestial are represented by the tradable and upgradable NFT. The resources and items offer the commanders as well as their ships various abilities and strengths. This makes some equipment even more sought after on the dedicated automated market maker-style as well as decentralised resource exchange of the title.
Additionally, the Celestial also encourages social interaction amongst the players. The commanders can also form their federations increasing their overall efficiency when completing the actions in the game. The federations will also be governed in the same way as the decentralised autonomous organisations. The wider Celestial DAO connects all of these potentially warring factions and also influences the future direction of the game development making use of the ERC-20 governance token of the project named CELT. The creative commanders can also submit their proposals to these DAOs for building just about anything as well as the community votes on which to develop.
What Forms Celestial GameFi?
✔️ The tradable NFT items can be improved using the resources that are harvested from Celestial. This raises their value and the potential market price.
✔️ The players are eligible to loan out their NFTs to the other commanders or gamers and in return generate revenue.
✔️ The successful governance proposals might finance the teams for building new features for the meta-universe of Celestial.
✔️ The daily quests offer play-to-earn opportunities.
✔️ The resource marketplace operates quite similarly to the decentralised exchanges such as Uniswap. Those offering liquidity to its pools, the resources and the supported cryptocurrencies, receive a share of the trading fees of the platform. The remaining revenue generated funds the main DAO’s community treasury.
3. Crypto Gladiator
The Crypto Gladiator is a play-to-earn idle fighting as well as land-conquest GameFi Protocol game depending on the proprietary sidechain of the OKC network. The gameplay of the blockchain game revolves around the levelling up of a team of fighters via combat. At the end of an individual match, the winning combatants receive weapons and wearables that power up their attributes when equipped. The characters and equipment can be tokenized as well as sold on the various NFT marketplaces that support OKC.
In order to get started, you would need to recruit a crew. The first few fighters that you receive are completely free but cannot be sold. Recruiting the additional gladiators or upgrading the existing team members needs spending of the Crypto Gladiator Diamonds (CGD). This is one of the two native currencies of the game. The players are also eligible to purchase CGD using OKT or the Crypto Gladiator Shards on-chain. CGD is awarded to the players in-game via the play-to-earn mechanisms like the land occupation.
What Forms Crypto Gladiator GameFi?
✔️ The in-game asset trading permits the gamers to monetize their time that is spent on playing.
✔️ The land-occupation mode offers play-to-earn opportunities.
4. Nine Chronicles
Nine Chronicles is a decentralised free-to-play fantasy role-playing game created by the open-source gaming project Planetarium. The plot revolves around the nine distant worlds that have been torn apart by the warring gods. The assistance of a half-human sidekick and a half-cat, the players receive a task to help goddess Freya return peace to both worlds.
The gameplay sees the players quest via the dungeons while collecting the resources that might be used to craft the rare and potentially valuable items. The items are tradeable on the secondary marketplace of the game’s native currency, NCG. A battle mode is also made available where the players can test their might against each other.
Dissimilar to most of the earlier blockchain games, Planetarium has set out to make this game a completely decentralised one. The game also does not possess any central servers while the players themselves host all of the content through the Libplanet blockchain gaming engine.
Along with the various community governance mechanisms, this extends the true ownership of the worlds and all their assets to the players themselves. The idea in this is that even if the Planetarium were to stop support for the Nine Chronicles, the game would still exist as long as the players hosted it themselves. Additionally, all the code of the game is open-source. This means that the gamers can fork their own projects from the software as they want.
What Forms Nine Chronicles GameFi?
✔️ The players are incentivized to run a complete node and support the on-chain features of the game with rewards in the cryptocurrency NCG, the in-game currency of Nine Chronicles. It can also be wrapped for creating the ERC-20 WNCG that can be exchanged for the other currencies at the exchanges such as OKX or can be used as collateral in the DeFi applications.
✔️ Blending the collected resources under the Nine Chronicles GameFi Protocol creates even more powerful as well as rarer items. Then the players can sell them on the Nine Chronicles marketplace that effectively monetizes their time spent in the game.
✔️ Winning in the Arena battle mode earns all the players NGC GameFi coins.
5. REVV Racing
REVV Racing can be termed as an arcade-style blockchain racing game included in GameFi Protocol that is a part of the Animoca Brands’ REVV Motorsport ecosystem. In terms of the gameplay, the title is mostly of the racer genre. However, the cars themselves are quite represented by the NFTs on the Ethereum scaling network Polygon. As such, the players take complete ownership of their vehicles and can also trade them on the secondary markets.
In order to get started, the drivers first have to acquire a car. For that they can either purchase a car at an NFT marketplace that supports the Polygon or receive a car as a reward for participating in various promotional events. The latest examples include the giveaway by the DeFi protocol named SuperFarm.
The game regularly hosts various tournaments following a time trial format. The drivers also receive a limited number of the “free” tries for competing in each tournament. After they have exhausted their free credits, the attempts become payable using their native currency of the game, REVV. The funds that are generated from the paid tries are contributed to the tournament prize pools. This is often as much as $150,000. While in the tournament period, the drivers can pay for as many attempts as they would like after they have used up their free tries.
Although the REVV Racing is not quite groundbreaking in its gameplay, the title features the slick graphics for a blockchain game and of course plays like a true arcade racer. With its assets that are completely dependent on the Polygon rather than the Ethereum mainnet, it is also even more accessible owing to the low network fees.
What Forms REVV Racing GameFi?
✔️ The players receive their prizes in the form of REVV tokens that is a GameFi token for their performance during the events.
✔️ The promotions with the DeFi protocols as well as the other online games permits the gamers to acquire cars by playing the mobile games such as Crazy Defense Heroes or even interacting with the partnered platforms such as QuickSwap.
✔️ The players can also trade their cars for a profit on the secondary NFT marketplaces.
What Is The Future Of GameFi?
In spite of possessing the roots that trace to the very beginning of the cryptocurrency, GameFi Protocol is solely starting to attract mainstream appeal. Demonstrating the growth of the niche neatly is the success of one of the flagship titles named Axie Infinity. Back in August 2021, the Axie Infinity became the very first blockchain game in the GameFi list that surpassed $1 billion in the total token sales of which one fifth occurred in just a single week. It has also hosted over 1 billion daily active players.
While the earlier blockchain games have struggled to attract mainstream appeal, the technology that is backing them and the understanding of it has developed to the point where the new GameFi Protocol titles are looking for large fan bases. For some commentators in the industry, gaming represents the most likely route to widespread blockchain adoption.
Over 2.7 billion video gamers globally are already pretty familiar with the notion of the scarce digital items, in-game currencies and tokenization. Meanwhile, the blockchain technology also empowers all of these video gamers in a method having clear benefits – both in terms of the development of a title and financially. Thus, it is not much difficult to imagine GameFi taking the increasingly bigger bites out of the worldwide video games market worth $175 billion.
The Blockchain Game Alliance is an organisation that is indeed aiming to raise awareness regarding GameFi and already has impressive members including the mainstream chip manufacturer AMD and game studio Ubisoft. Additionally, Ubisoft had announced back in May 2021 that the focus of its sixth Entrepreneurs Lab event would be GameFi Protocol.
Provided the success of Axie Infinity and the number of the blockchain games that are currently under development on the various blockchain protocols, it is quite clear that the GameFi Protocol has a bright future ahead.
However, it is difficult to predict how the future will unfold. With the features that are discussed in this article, it is very prominent in several GameFi titles, the speed at which the blockchain technology is evolving today will bring in new innovations. Most of the breakthroughs will surely make it into the video games and also offer some exciting ways to monetize the new experiences.
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