The Growing GameFi Monster
(Photo : The Growing GameFi Monster)

What is GameFi

The term GameFi unites two words: Game and Finance. It implies the union of blockchain-based games and decentralized finance tools in all their forms: profitability pharming, landing pages and loans, algorithmic stablecoins, new token issuance tools, etc.

The term was originally adopted (or even invented) by the "father of DeFi" Andre Cronje back in September last year. On his Twitter, he wrote:

"It is extremely interesting for me to observe the gamification of monetary policies. With GameFi you can turn your money into a means of production and get new bonuses in games. So far, we have only developed TradeFi (finance for trading), but now we are moving towards GameFi."

The GameFi industry started way back in 2013, when developers started introducing cryptocurrencies into their games. Actually, any game that uses blockchain-based cryptocurrencies can be called GameFi.

The industry developed slowly until 2021, but this year, thanks to the combined influence of DeFi and NFT, the industry has received a powerful impetus to develop.

In August, there was a real boom in GameFi, and now you can earn even more money from NFTs in this area than from "regular" NFTs or nascent crypto projects. For example, according to the analytical portal DappRadar, the developers of the blockchain game Axie Infinity earned $800 million over the past month.

Apparently, Andre Cronje's enthusiasm was justified: GameFi is on the heels of the classic video game industry.

In GameFi, users can receive rewards that can be redeemed for cash. Games are no longer just a waste of time; it is an opportunity to make money. The 2021 NFT boom turns into a GameFi boom, and some games have a bomb-like effect. 

Why GameFi is growing in popularity

GameFi owes its popularity to the cumulative impact of two directions - DeFi and gaming. The prospects for the integration of the crypto market and the gaming sector were discussed 3-4 years ago.

The price of GameFi tokens is now growing due to their NFT component, analysts note. Investors will try to make money from the reselling of game characters and digital artifacts, and not from the games. On the other hand, you should not discount the games themselves, in which experienced gamers and just people with free time can "pump" their characters and then resell them.

The ability to add value to your characters, skins and other attributes of games is not new, because even now you can upgrade your characters and sell them on Steam. However, blockchain games involve receiving rewards in the form of NFTs, which are immediately found on the blockchain and can be put up for sale on any NFT marketplace.

It seems that with the development of NFT and blockchain technologies, GameFi will continue to grow at an extremely high pace and will become another direction in the crypto for earnings and investments.

Everybody is talking Metaverse 

In July 2021, Mark Zuckerberg announced the creation of the metaverse. According to him, this will take about five years. To confirm the seriousness of intentions, Facebook was renamed Meta, having previously announced plans to hire 10,000 people to work on the project.

When the leaders of tech giants make policy statements about the change in the strategy of their companies, it is useful to listen: often the changes declared will sooner or later affect the entire industry.

Zuckerberg is very obsessed with devices that will open up a wealth of sensations and possibilities in the metaverse to humans. He is easy to relate: the modern digital world is too diverse and powerful, and smartphones have become a brake and obstacle for further development of the digital realm.

The metaverse is not a development or a product of one company, it is a description of the digital environment of the future as a whole, it is the Internet that comes off screens and merges with the rest of the world around us. In the metaverse, there are not only digital entities, not only a game or work environment, but also living people - and we will feel their presence better and more fully.

Yet, experts say that no metaverse will ever replace the real world. In the long run, it will only be the superstructure over the conventional internet which will provide new possibilities for interaction and communication on all levels, replacing the ones that we know today.

"These are completely different entities: material and metaphysical. The metaverse is just an information field, a superstructure over the Internet. Can the Internet replace the real world? I do not deny that there will be individuals who will spend 24 hours a day on the Internet. There will be people in the metaverse around the clock, but this is rather a deviation from the norm. In the end, nature always wins and pulls people back into the real world. That is why we create a strong connection between the real and virtual worlds," says Dan Andrijanov, CEO of the nascent GameFi ecosystem TFL.io.

Is it a good idea to invest in GameFi now?

Despite the fact that blockchain games are attracting millions of users, it seems that the segment is still in its infancy. So far, the link between decentralized gaming and cryptocurrencies may alienate the general public due to the fact that many do not understand the technologies that this sector is based on. It is the user audience that plays a big role in the distribution of the game, in its popularity.

The concept of CryptoKitties was simple - so they were able to win over their audience in a short period of time. However, on the scale of the global gaming market, decentralized games still occupy only a small share of it. Nevertheless, with the proliferation of cryptocurrencies, more transparent regulation, and a simple and user-friendly interface, GameFi projects can become really massive. Therefore, it is quite possible that over time they will even appear on consoles and will be sold through online stores.

Yahoo Finance analysts suggest you should pay attention to some of the following GameFi tokens: SAND, AXS, TFL, MANA, ENJ. They are showing excellent growth dynamics that will continue in 2022 (Credit: https://finance.yahoo.com/news/play-earn-best-gamefi-tokens-072123917.html). Yet, you should be really careful with your intentions to invest in the segment. After a sharp rise, it is dangerous to enter the asset, since there is a high probability of a correction. Analysts advise to wait for the correction, which will allow the purchase of game tokens at a reduced price. In general, the gaming industry is a very promising direction, but when assessing it, it is also necessary to take into account the general market mood.

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