GameFi is a conjunction of 3 massive markets: decentralized finance (DeFi), non-fungible tokens, and blockchain-based games.
Blockchain demonstrated to the world its power to shape the future. Along with decentralized finance, blockchain brings GameFi's term to fruition, becoming one of the most anticipated arenas in the following years.
The purpose of blockchain is to address the problem of lack of transparency. GameFi, which is based on this technology, fulfills the same task: a solution to the main drawbacks of the classic game industry.
Why is GameFi critical?
One of the biggest challenges for game developers as well as gamers is gaining mutual trust.
These games are managed by the central servers, which also manage the entire ecosystem. Most games have an internal economy that is managed by the game developers. Creates an untrusted scope.
Different from classic online games, which operate on the model where players buy updates to gain a virtue over other games. GameFi shows the Play-to-Earn model. This allowed players to earn a full-time income by contributing time and effort.
An initial use case for Ethereum
Ethereum is of course the component that powers most of the games. Ethereum has been used extensively by GameFi developers and is still dominant. However, the lack of block space hurts performance. In 2017, CryptoKitties' fame clogged the Ethereum network, causing fees to skyrocket.
The game has changed once CryptoKitties used the new ERC-721 standard to represent in-game assets as unungible tokens (NFTs). Since then, performance-optimized blockchains have been released, accelerating innovation in the GameFi space.
Will GameFi be the next big thing?
According to Footprint Analytics, GameFi has attracted significant traction, accounting for 13% of each blockchain investment. The total market capitalization of the top games has exceeded $ 1 billion. However, given the enormous size of this market, it gives even more room for expansion.
Surprisingly, GameFi is just getting started.
The triumph of one of the superior titles, like Axie Infinity, shows the appearance. With the growing effect of digital assets, financial specialists and NFT technology developers tried to win market share precedent for their participants to make any shift.
As a consequence, the boss and interest have grown in popularity among users and developers.
According to crypto data tracker DappRadar, the number of transactions associated with games reached 80-100 million.
Despite its monumental potential, GameFi generally continues to face drawbacks that threaten its ability to grow in the future.
Most of the GameFi titles lack charm and flashy. In other words, the graphics and gameplay of P2E projects are not attractive and fail to attract gamers. Improving the game genre, as well as the graphics and gameplay, is going to be paramount for the near future for blockchain-based P2E projects to gain traction.
Managing relationships in the game is going to be quite different from trying regular transactions. You need high speed and security, which is why most of the recent trendy P2E projects are not based on Ethereum thanks to price and speed drawbacks. As a better option, the game developers chose Binance Smart Chain.
Una joya escondida en Play-to-Earn
As the popularity of P2E grows, so will the number of users, which puts pressure on the infrastructure. As a consequence, for blockchain games to flourish, truly innovative blockchain platforms are needed in terms of speed, price, and security. Obviously, Ethereum did not meet those criteria.
The financial model is another fundamental source of concern. To invest in characters and games, all the top games require players to spend a certain proportion of funds. Exemplifying, Axie Infinity needs an average of $ 800 to own an Axie.
Although the process of playing the game enables players to win money and return capital after a period of time, not all players remain willing to spend a huge sum of money to learn a game.
GameFi is precisely the next generation of games, bringing new and different experiences. However, some changes are needed in the way it operates to minimize entry barriers for new people.
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