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Why GameFi matters and how it may change the traditional gaming industry?

 

There are tons of amazing developments happening in the space right now, such as the Ethereum Merge, Web 3.0 social media(or SocialFi), the metaverse, and many more that will all contribute to the next big crypto wave. However, I think when we look back in five years, the next crypto catalyst will have a lot to do with GameFi or NFT games, one of the most interesting innovations in the gaming space, which enable players to truly own the items and assets they acquire in-game, rather than having to purchase expensive digital copies that exist only in the centralized server.

 

To start, let’s dive into the basic concept of GameFi. At a high level, GameFi is the financialization of video games, and is a play on words from another blockchain application called DeFi (decentralized finance). As one of the most talked about sectors in Web3. GameFi is characterised by its Play-to-earn (P2E) business model, and mainly refers to blockchain games that offer tokenised incentives to players while enabling frameworks for player-as-owner rather than the standard player-as-consumer.

 

Almost all blockchain games are accompanied by a corresponding in-game currency, marketplace, and tokenomics. Unlike traditional gaming, there is no centralised authority in control. Instead, GameFi projects are usually managed and governed by the community(sometimes a DAO), with players even able to participate in decision-making in the development of the whole project.

In contrast, in today's gaming world, the idea of ownership is already prevalent in many games. Think of Fortnite for example: you can own different skins for your playable character that some other people may not have. However, this ownership in this scenario is locked within the castle walls of these games. Once users put money into them, that money stays within that ecosystem forever. In this world, gamers can only receive entertainment value.

 

Instead of using an in-game currency to purchase and sell skins, heroes, or any type of in-game item, you can use crypto to purchase and sell these items. Since crypto is something that anyone can buy, trade, sell, etc., granted that you have an internet connection, that means you can actually make money from playing these games.

 

In this sense, GameFi is incredibly easy to explain to even crypto rookies. Also, using examples and analogies, which are the best way to explain Web 3.0 topics to newbies is much easier to do with GameFi as you can simply explain an existing product, but add crypto rails to its explanation.

 

What GameFi brings about is unlike anything that currently exists in the real world, it’s a new concept based on the existing technology. For the reasons mentioned above, GameFi will be a huge deal during the next crypto bull run and it may even single handedly onboard more people into Web 3.0 space than any other blockchain applications.

Translate & Edit: P2E Game

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