A Look At GameFi’s Contributions To Crypto And NFT Growth

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Right now, GameFi is the talk of the cryptocurrency world with many looking towards GameFi’s contributions. It’s mainly due to the number of advantages it offers in terms of prizes and the excitement of winning, along with the development of new crypto assets under the name DeFi. 

As a GameFi player – winnings can be traded, lent out, rented, or even borrowed against. It’s not possible to do that with your county fair stuffed kitty. 

A report claiming that people are borrowing to play on GameFi suggests the possibility of GameFi becoming a digital sharecropping platform that will make cryptos accessible to all. 

Gamefi's Contributions

As one of the chief drivers of the cryptocurrency industry, GameFi has had a tremendous impact on the industry over the last few years and continues to do so. Let’s see what exactly is GameFi and what are GameFi’s contributions to crypto and NFT growth. 

What is GameFi and how does it work?

As we are talking about GameFi’s contributions, it’s important to know how it works. GameFi which combines the worlds of gaming and finance – offers gamers the opportunity to earn rewards while they play their favourite games.

Aside from simply offering financial rewards for players, GameFi also provides the possibility of owning digital assets in the virtual world, which can be interoperable within different virtual worlds. In other words, it’s a play-to-earn approach.  Some GameFi applications, such as Alien Worlds, also facilitate passive income generation by allowing other players to mine their virtual lands.

Gamefi's Contributions

By using DeFi platforms’ staking and lending techniques, they can earn interest by lending assets that include digital characters.

With approximately $9.2 billion in token market capitalization, the market has been growing steadily over the past few years. Moreover, the GameFi networks have remained vibrant even in the midst of the crypto winter. In fact, by 2031, the industry is expected to be valued at $74.2 billion, which is a significant percentage increase.

Blockchain activity surged to a historic high in August, with decentralized applications (dapps) accounting for 60% of all transactions. Moreover, the fact that it is catching the attention of a lot of investors is one of the reasons why it is so popular.  Nevertheless, it’s crucial to understand how it works.

How do GameFi Networks work?

Blockchain technology underpins GameFi ecosystems and rewards players according to different economic models enabling them to mine for resources and earns tokens in exchange. Nonfungible token (NFT) is typically awarded to users as a reward on popular marketplaces.

A token of this type can also be traded and exchanged with other cryptocurrencies, such as Ethereum (ETH) and Bitcoin (BTC)

Gamefi's Contributions

In other words, these tokens have evolved into full-fledged crypto-currencies, which can be exchanged for real cash on decentralized exchange platforms. Furthermore, GameFi’s items are often digital landscapes, weapons, or avatars, allowing users to diversify their gameplay. 

What Makes GameFi So Important for Cryptocurrencies

In spite of only being a few years old, a study found that GameFi now boasts an active community of over 800,000 gamers in blockchain games, with survey findings showing that 75% of all gamers in these games trade, think about, or are currently trading cryptocurrencies or fiat for in-game assets. 

Advantages you can expect to enjoy with GameFi

In-game assets have a high earning potential, namely because they can be traded internationally easily, quickly, and cheaply because the games use their cryptocurrencies.

Furthermore, one of the main benefits of using GameFi platforms is that they often allow players to design and customize NFTs on their outlets, allowing them to customize virtual worlds to their liking.

Gamefi's Contributions

Providing a reason to use cryptocurrency in a way other than speculative, as well as bringing unique elements of the digital world into multiplayer games, giving NFTs a deeper meaning, GameFi is helping to get both types of blockchain tokens into mainstream use. 

A total of over $3.5 billion was raised by GameFi in the first half of 2022, which is an encouraging sign for the industry.

It’s Worthwhile To Keep An Eye On GameFi Projects

With new gaming crypto projects coming to prominence all the time, it isn’t possible to provide a definitive list; however, we will look at 2 games that illustrate both the creativity and increasing popularity of the sector.

#1 – CryptoBlades

CryptoBlades is an NFT roleplaying game where players are rewarded with native SKILL tokens for participating in raids and defeating enemies. Players can also buy SKILL tokens using BNB and then swap them through the ApeSwap decentralized exchange on BSC.

This is great for Binance as demand for BNB rises and greater investment is made in its blockchain. Gas fees are also paid with BNB.

Gamefi's Contributions

As in other GameFi applications, in CryptoBlades, users are able to customize their weapons and accessories, minting them as NFTs and then selling them in an online marketplace. 

Metrics suggest that the platform continues to grow, with 665,000 unique wallets created in the past 30 days, the third-highest out of any blockchain-based project.

#2 – Axie Infinity

Axie Infinity is a cartoon universe where players collect, trade, and battle fantasy creatures called Axies. It has roughly 1 million daily active users, about 40% of whom are in the Philippines, with Venezuela and the US as the next biggest markets.

Gamefi's Contributions

One of the main objectives of the game is to breed new Axies, which you can do by obtaining SLPs (smooth love potions). These SLPs can be traded on both DeFi exchanges and centralized exchanges such as Binance.

The other token, Axie Infinity Shards (AXS), can also be earned through interacting with certain parts of the game, staking cryptocurrencies, or creating user-generated content. AXS acts as a governance token, with players getting a say in how the game develops.

What GameFi can do to boost growth?

Digital currencies have increased in popularity in recent years due to GameFi projects that rely on cryptocurrencies to handle transaction settlements.

DappRadar, a platform that tracks decentralized application (DApp) activities, reported in a recent report that, in the third quarter of 2021, the number of unique active wallets (UAW) associated with blockchain gaming has significantly increased, accounting for approximately 49% of the 1.54 million UAWs every day.

Based on the data, GameFi has the potential to disrupt the sector and promote the adoption and use of cryptocurrencies.

GameFi's Contributions

As part of the same study, Chainplay — a platform for aggregating NFT games — found that 75% of investment in GameFi led to crypto market participation, indicating the positive impact GameFi is having on crypto adoption.

Contribution of GameFi to NFT growth

Aside from being a pioneer in the use of cryptocurrencies, GameFi has also made significant contributions to the growth of the NFT industry. Due to this, there is an increased use of NFTs on the blockchain as a result of GameFi’s reliance on them for in-game assets.

For many, it’s not a surprise as GameFi’s contributions and rises in the year 2021 mirrored the boom in NFTs.

Whereas the GameFi NFT sales rose from $82 million in 2020 to $5.17 billion in 2021. Hence the NFT market growth was bolstered by the sales numbers.

Investors and video game companies now recognize GameFi’s potential

The GameFi project is attracting a huge amount of investment from investors. It is expected that this new development will enhance the credibility of blockchain as an investment option in mainstream markets.

A blockchain data analytics company, Footprint Analytics, reports – blockchain gaming companies have raised more than $13 billion so far. During the first half of 2022, a total of $3.5 billion was raised.

Ilman Shazhaev, CEO and founder of GameFi project Farcana, in an interview with Coin Telegraph, talked about the industry’s rapid evolution, resulting in investors’ increasing interest:

“The game-based blockchain ecosystem has elicited a great deal of interest from investors because GameFi represents a sector of this ecosystem. By investing in an industry like GameFi, they are betting on the future.

In terms of innovation, the sector is still in its infancy, according to him.

According to current trends, major enterprises have jumped on the GameFi bandwagon, including mainstream gaming companies.

GameFi's Contributions

This year also saw Zynga announce the release of a game based on NFT. As part of its effort to create an NFT games collection, the company announced it was establishing a blockchain team to collaborate with existing blockchain partners.

On the other hand, Chinese tech giant Tencent, which is one of the world’s largest tech companies, has also started investing in GameFi and it’s a major lead in GameFi’s contributions. In Immutable’s $200 million fundraising event, it was recognized as one of the top contributors whereas Immutable is known for creating games based on the NFT framework – games like Gods Unchained.

GameFi’s future: what’s in store?

As GameFi receives and holds attention, it looks like it will be a lot easier for the studio to design engaging games that are more sophisticated, increasing investor and backer interest. As another internationally renowned brand, The Walking Dead has a story set in The Sandbox, an immersive zombie simulation. 

It’s already happening that more and more companies, including luxury brands, are launching NFTs, why shouldn’t they produce branded clothing for characters in video games? Certainly, it will make DeFi a richer experience, encouraging people to interact with it in a way they might have never imagined.

GameFi’s contributions to crypto and NFT growth are obvious, and we can’t wait to see what’s next. Let us know what you think about it in the comments section below.   

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