GameFi has the following benefits, each being a solution to the deepest problems of the gaming industry:
Ownership of digital assets via NFT’s: If you play World of Warcraft you don’t actually and legally own the heroes, items, land you purchased or earned. They all belong to the company which owns the game. You can’t sell them legally, easily and safely. With blockchain games you, the player, truly own everything you have bought or earned playing. You can buy, sell, and trade it freely, easily, safely and legally inside the game or on open markets.
Secure: Storingyour precious NFT items on a blockchain does not only free you from the game developer but also provides the security of the blockchain technology, which is better than that of the conventional databases. Furthermore, NFT technology guarantees that your item is unique and authentic, leaving no space for fraud.
Easy to trade: The cryptographic algorithms utilized on blockchain platforms, makes money-asset exchange possible without needing to trust middlemen or risking losing your asset or money due to malicious counterparts. This has allowed the sector to build open markets to trade NFT assets and crypto exchanges to trade coins and fungible tokens. You may enjoy decentralized exchanges (DEXs) if you are into decentralization or centralized exchanges for convenience.
Interoperability: Thanks to blockchain technology it is now easy to have cross-game functionality, where any action in one game can trigger a response in another. These can be in-game actions linked across games; having the same tokens, or NFT’s with cross-game capabilities. Interoperability opens great possibilities for growth for any game and a path to metaverses.
Player economy: Blockchain technology provides cryptographic proof of ownership for anything valuable in games without the need for an authority. This makes the peer-to-peer trade possible, which is game changing. Now the economy can be driven directly by the players. Some GameFi projects even plan to provide governance via token staking by players. The players will enjoy taking role in significant decisions regarding the game. For the first time in history, players can be the masters of the game economy they drive.
The COVID-19 pandemic has harmed the global economy and devastated the poor countries, leaving millions of people unemployed. People from these countries started looking out for new sources of income. We see that the adoption of crypto currencies is comparatively high in the developing and underdeveloped countries. Furthermore, people started to see “Play To Earn” as a way of generating income, thanks to successful P2E milestones, like CryptoKitties, and Axie Infinity. Meanwhile, universal basic income discussion is going mainstream, globally. However, play-to-earn has an intrinsic problem. Extrinsic motivation harms fun. If your game ecosystem is filled with those who play to earn, you end up in a death spiral. Where do you find the money to pay your gamers when the hype is gone? If your answer is from the new players, that's the perfect definition of the Ponzi scheme, and we all now how it ends.