What is GameFi? A Guide to Crypto Games & Play-to-Earn

What is GameFi? A Guide to Crypto Games & Play-to-Earn

Table of Contents

Table of Contents


GameFi is a term used to describe play-to-earn blockchain games that provide financial incentives to participants. Players can typically earn cryptocurrency and NFT rewards by completing chores, fighting other players, and progressing through the various game levels.

Unlike traditional video games, most blockchain games allow players to move game items outside of the virtual world. Players can trade their products on NFT marketplaces and their crypto winnings on crypto exchanges as a result of this.


GameFi 1.0 is made up of raffles and games that generate random numbers. The simultaneous popularisation of DeFi (beginning in summer 2020) and NFTs (accelerating in 2021) provided GameFi a new look and feel that appealed to gamers all around the world.

We’re seeing the GameFi concept evolve into NFT-based games that reward players with real-world monetary incentives as NFT sales continue to soar.

For example, Web3 games like Axie Infinity, the most popular NFT-based game, has a token (AXS) with a total market worth of approximately $10 billion at its peak in 2021. Many aspects from DeFi are combined with play-to-earn methods in such games. Since the rise of Axie Infinity, GameFi has been steadily engulfing the traditional gaming business. It entices gamers by providing them with the option to earn money while having a good time. Now that we have a rocky idea of GameFi, let’s understand in detail what exactly is GameFi, and how does it vary from the video games we’re used to?

What is GameFi?

What is GameFi?

The term “GameFi” is a combination of the words “game” and “finance.” It refers to blockchain games in which players can earn money by playing. The GameFi ecosystem creates a virtual gaming environment using cryptocurrencies, non-fungible tokens (NFTs), and blockchain technology.

In most cases, in-game awards are earned through fulfilling chores, fighting other players, and progressing through the various game levels. They can also trade their assets on crypto exchanges and NFT marketplaces outside of the game.

In most cases, in-game assets will provide players with particular advantages, allowing them to earn additional rewards. However, some games have avatars and cosmetics that are entirely decorative and have no bearing on gameplay or earnings.

Players can earn rewards by completing activities, fighting other players, or building monetized constructions on their piece of land, depending on the game. Some games allow users to earn money without having to play the game by staking or lending their gaming assets to other players. Let’s take a look at some of GameFi’s most prevalent features.

Games are the gateways into the metaverse virtual reality

With the addition of the concept of a broadly interoperable metaverse, the GameFi concept is getting even more advanced.

A growing number of NFT games are following in the footsteps of Decentraland, the Sandbox game, and Upland, who pioneered the on-chain metaverse by selling virtual lands as NFTs.

The Big Game, a cooperative space-themed RPG developed on the Binance Smart Chain, for example, revolves around owning virtual land plots known as SPACEs. Players use time machines to go on expeditions, and these land NFTs enable them to expandthem expand their time machines and unlock additional game features.

Ember Sword, an MMORPG, is also developing a game in which the game landscape is divided into four different sorts of land plots. On these plots, players can build refinement stations, residences, and exchanges to trade game assets. Landowners get half of the net revenue generated on their properties.

The GameFi Projects are centred on token economics.

NFT projects on GameFi create their own coins and game economies around them.
In most cases, a one-token economy is used, with the token serving as both a utility and a governance token. Utility tokens can be used to purchase gaming characters, clothing, and other stuff in-game. They’re also utilised to distribute incentives to the player community. Holders of governance tokens have voting rights.

The Sandbox’s SAND, Alien World’s TLM, and League of Ancients’ LOA are all popular utility and governance gaming tokens.

For these functions, some games prefer to issue two different tokens. The DEC is used as the utility token in the Splinterlands game, and the SPS is used as the governance token.
Then there are games that give out even more tokens than that. For example, the Gala Games’ Mirandus project’s economy is based on three tokens. Apart from Materium, the game’s utility token, there’s also the GALA token, which can be used on any of Gala Games’ blockchain platforms. In the future, the third token, Voxcoin, will be largely utilised to reward incentives.

Axie Infinity, one of the most popular blockchain games, uses a three-token economy as well: SLP is the utility token, AXS is the governance token, and RON is only used for transactions on Axie Infinity’s sidechain Ronin.

A Common Practice: Initial DEX Offerings (IDOs)

Initial DEX Offerings (IDO) are a frequent way for GameFi initiatives to raise financing. For example, the Ethereum blockchain-based, futuristic space-themed MMORPG Sidus Heroes raised $21 million for the game’s two native tokens, SIDUS and SENATE, via one public and three private IDO rounds. SpaceSwap, Blokpad, Ignition, Trustpad, Seedify, GameFi, and Red Kite were among the notable blockchain platforms that participated in the rounds.
Such private or public offers are allocated a set percentage of the overall token supply in GameFi initiatives.

For instance, the GameFi tactical defence game, Legends of Mitra assigned 10% of its utility token MITA to public sales and 2.5% to private sales.

The distribution of the total token supply to all other activities is also included in tokenomics. Another GameFi project, Sipher, a role-playing game, set aside 4% of the total 1,000,000,000 SIPHER token supply for public sale. 30.4% of the budget was set up for game incentives and marketing, with the other funds going to advisers and ecosystem development. In total, 39% of the budget was allocated.

The Most Popular Crypto Games

According to Dapp Radar data, the ten most popular NFT games in the last 2 months are:

  • Wax-powered Alien Worlds.
  • BSC-backed Bomb-Crypto.
  • Axie Infinity which runs on Ronin.
  • Hive blockchain’s Splinterlands.
  • Polygon-backed Sunflower Farmers.
  • EOS-powered Upland.
  • MOBOX, which runs on the BSC.
  • Ethereum-backed Crazy Defense Heroes.
  • BSC-powered X World Games.
  • Avalanche’s DeFi Kingdoms.

The Ethereum blockchain may continue to dominate the NFT art market and projects such as BAYC. When it comes to top GameFi projects, however, as you can see from the list above, we see a mix of different chains. This is because Ethereum’s scalability issue is a big roadblock in the game industry, which necessitates simultaneous transactions from hundreds of thousands, if not millions, of players.

As a result, the majority of GameFi projects either create their own sidechains, as Axie Infinity did with Ronin, or rely on layer 2 solutions like Polygon or Avalanche.

Model of Play-To-Earn (P2E)

Play-to-earn (P2E) is an innovative gaming mode at the heart of GameFi projects. It’s considerably different from the usual video game pay-to-play concept. Pay-to-play games need players to make an initial investment before they can begin playing. Video games such as Call of Duty, for example, require users to acquire licences or recurring subscriptions.

Traditional video games, in most circumstances, do not generate any financial rewards for users, and the gaming firm controls and holds their in-game assets. P2E games, on the other hand, can give players complete control over their in-game assets while simultaneously allowing them to earn money.

Keep in mind, however, that everything depends on the model and game design used by the GameFi initiatives. Players can (and should) have complete ownership over their in-game assets thanks to blockchain technology, but this isn’t always the case. Before you jump into a P2E game, be sure you understand how it works and who is behind it.

Another thing to keep in mind is that while P2E games can be free to play and still produce revenue, some GameFi projects require you to acquire NFTs or crypto assets before you can participate. As a result, it’s crucial to DYOR and assess the dangers at all times. You’re more likely to lose your original investment if a P2E game requires a large initial commitment and the rewards are tiny.

Axie Infinity is one of the most well-known earn-to-play games. Since 2018, it’s been a popular Ethereum-based NFT game. By completing daily objectives and combating other players, gamers can collect SLP tokens with their NFT pets (Axies).

If they hit a particular PvP rank, they can additionally receive AXS awards. AXS and SLP can also be used to breed new Axies, which can then be used in-game or exchanged on the NFT marketplace.

Aside from purchasing and selling Axies, users can also rent their Axies to other players, allowing owners to earn money without having to play the game. The scholarship is the term for this type of loan. It allows students to play games and receive rewards using borrowed Axies.

To put it another way, Axie owners can make a passive income while scholars can enjoy the game for free. The money earned is divided between scholars and Axies owners.

Digital Asset Ownership

As previously stated, blockchain technology enables digital asset ownership, allowing players to monetise their in-game assets in a variety of ways.

Players can have avatars, pets, residences, weapons, tools, and much more, just like in video games. However, with GameFi, these assets can be issued or produced as non-fungible tokens (NFTs) on the blockchain (also known as NFT minting). This gives players complete control over their assets, as well as the assurance of legitimacy and provable ownership.

Land ownership is a key theme in certain popular metaverse games, such as Decentraland and The Sandbox. They enable players to profit from their virtual properties. In The Sandbox, players can buy digital real estate and develop it in order to make money. They can, for example, charge visitors to their land, earn token rewards by hosting content and events, or rent out their customised land to other players.

DeFi Applications

Staking, liquidity mining, and yield farming are all DeFi products and features offered by several GameFi enterprises. Players can usually use their in-game tokens to acquire awards, unlock unique products, or get access to new gaming levels by staking them.

Adding DeFi components to crypto games can also help it become more decentralised. Unlike typical game studios, which have centralised control over game updates, some GameFi projects involve the community in the decision-making process. Through decentralised independent organisations, they can propose and vote on future improvements (DAOs).

Decentraland players, for example, can use their governance tokens (MANA) to vote on in-game and organisational policies. The bigger their voting power, the more tokens they lock. This allows gamers to communicate directly with game producers and have an impact on the game’s development.

Are video games considered GameFi?

Traditional video game gamers can also collect digital assets and earn in-game currency to enhance their avatars. These tokens and things, however, cannot (or should not) be traded outside of the game. Most of the time, they don’t even have any worth outside of the game. Even when they do, users are frequently barred from monetizing or trading their virtual goods in real life.

Cryptocurrencies and NFTs are frequently used in blockchain games as in-game tokens and assets. Some blockchain games use virtual tokens instead of crypto or NFTs, but players should still be able to convert their in-game assets into NFTs if they want to. This means that players can deposit their winnings into crypto wallets and trade them on crypto exchanges or NFT markets. They can then exchange their cryptocurrency winnings for fiat currency.


How do I begin playing GameFi games?

There are thousands of blockchain games on the market, each with its own set of rules. Scam ventures and bogus websites should be avoided at all costs. It’s risky to connect your wallet or download games from strange websites. You should, ideally, construct a fresh crypto wallet just for this purpose and only utilise funds you can afford to lose. Follow these steps to get started if you’re convinced the game you found is safe.

1. Make a cryptocurrency wallet.

A suitable cryptocurrency wallet, such as Trust Wallet or MetaMask, is required to enter the GameFi environment. You may need to use multiple wallets or connect to separate blockchain networks depending on the game you’re playing.

To play blockchain games on the BNB Smart Chain (formerly Binance Smart Chain), for example, you must first link your MetaMask to the BSC network. You can also use Trust Wallet or any other crypto wallet that is supported. To find out which charities the game supports, go to the game’s official website.

You may also connect your cryptocurrency wallet to the Ethereum blockchain and play most of the Ethereum network’s games. Some games, such as Axie Infinity and Gods Unchained, will still create their own wallet in order to save money and enhance performance.

Axie Infinity is based on Ethereum, but the Ronin network was created as a sidechain by their team. As a result, to interact with the Axie Infinity ecosystem, you must utilise the official Ronin Wallet. The Ronin network, as a sidechain, makes it considerably cheaper to trade and breed Axies, lowering the cost of playing.

2. Make a link between your wallet and the game.

You’ll need to connect your wallet to play a blockchain game. Make certain you’re connecting to their official website rather than a spoof. Go to the game’s website and seek for the option to link your cryptocurrency wallet.

Unlike traditional online games, which need you to create a username and password, most blockchain games use your crypto wallet as a gaming account, so you’ll probably be required to sign a message on your wallet before you can play.

3. Review the game's prerequisites.

To get started, most GameFi initiatives will ask you to buy their cryptocurrency token or in-game NFTs. The prerequisites differ each game, but you should always assess the earning potential as well as the overall hazards. Make careful to calculate how long it will take to recoup your initial investment and begin profiting.

If you want to play Axie Infinity, you need 3 Axies in your game wallet. You can purchase them from the Axie Marketplace. To purchase Axies, you need wrapped ETH (WETH) in your Ronin Wallet. You can buy ETH from crypto exchanges like Binance and use the Ronin bridge to transfer them to your Ronin Wallet. For more information, please check out How to Use the Ronin Wallet?

If you don’t have any money or don’t want to take risks, consider looking for a scholarship program. They allow you to borrow NFTs to play, but you will have to share your earnings with the NFT owners.

The Future of GameFi

In 2021, the number of GameFi projects increased dramatically, and this trend is expected to continue in the next years. DappRadar now lists over 1,400 blockchain games as of March 2022. Popular games are now available on many blockchains, including Ethereum, BNB Smart Chain (BSC), Polygon, Harmony, Solana, and others.

The GameFi growth pattern is projected to continue at a rapid pace as blockchain technology develops. GameFi is particularly appealing, especially in developing nations, because it allows you to own in-game assets and make money from them.


People have been trying their luck with basic browser games in the hopes of making BTC gains since the inception of Bitcoin. While Bitcoin games are still available, the rise of Ethereum and smart contracts has transformed the blockchain gaming landscape, allowing for far more complex and immersive experiences.

It’s clear to see how GameFi entices gamers by combining fun and monetary rewards. With the growing popularity of blockchain gaming, we may expect a growing number of large corporations to invest in the metaverse.

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