The emergence of Web 3.0 is disrupting all digital, financial and entertainment sectors. Indeed, the creation of blockchain technology, which allowed the invention of cryptocurrencies, notably created what is called DeFi which means “Decentralized Finance”. And a new term has recently appeared with GameFi . This concept covers a fusion between the world of video games and that of finance. This is a new, growing sector that is revolutionizing the world of Gaming.
But what is it actually? How does it work ? What is its story? What is the potential of GameFi ? This is what we are going to study in detail in this file dedicated to GameFi .
Summary :
What is GameFi ?
As we explained at the start of this article, the term GameFi was born from the merger between Gaming and Finance. This revolutionary mix between gaming and decentralized finance (DeFi) is made possible thanks to the invention of blockchain technology by Satoshi Nakamoto in 2008.
Concretely, GameFi covers a new generation of games which integrate financial elements into their gameplay, and in particular the notion of ownership with NFTs ( Non Fungible Tokens ). These new games from Web 3.0 are more commonly called P2E games for Play to Earn.
To put it simply, Web3 and GameFi Play to Earn games are games that allow players to win rewards in real money (euro, dollar, crypto etc.) and in the form of NFTs (skins, equipment, accessories etc. .) which can be resold to other players.
In summary, GameFi brings together all games that have a real economic ecosystem whose market is governed like any financial market by the law of supply and demand.
The History of GameFi
The history of GameFi , also called Web3 Gaming, began in 2017, ten years after the creation of the blockchain , with the appearance of the first Play to Earn game: CryptoKitties.
The first P2E game on Web3: CryptoKitties
Created in 2017, the CryptoKitties game allowed players to collect, raise, and interact with virtual cats. These virtual cats being available in the form of NFTs, players had the possibility to buy them and resell them, which created a trade in virtual cats on the game.
CryptoKitties was thus the first Web3 game to introduce NFTs into gameplay and introduced the notion of gamification of collectible digital objects via the blockchain .
The explosion in the number of P2E games in 2020
Starting in 2020, the number of Play to Earn games has exploded with hundreds, if not thousands, of projects in development. But like any new economic sector, GameFi then saw the arrival of many new P2E games of low quality, unsustainable, and even scams. However, major and reliable players emerged during this period like Sorare For example.
An increasingly mature and professional market
The more time advances, the more institutional video game publishers like Ubisoft or Square Enix are interested in GameFi , and in the potential of blockchain and NFTs in video games. In addition, large investors are looking at GameFi , which demonstrates the growing credibility and potential of Web3 Gaming among the general public in the relatively near future.
What is the potential of GameFi ?
We3 Gaming, like Web 3.0, is described as an ongoing revolution for players specializing in the field. And this for several obvious reasons.
The appearance of digital ownership in games
In traditional Web2 games, all skins, equipment, accessories, and gameplay elements are tied to the game in question, and therefore have no value or use outside of it. These digital objects that players can buy for real money are not assets, nor their property, but on the contrary planned obsolescence. It is therefore a wasted purchase for the players...
GameFi 's Web3 games blockchain technology and NFTs ( Non Fungible Tokens ), on the contrary offer digital title to their purchases of skins, equipment, accessories, etc. Thus, the objects that players can buy in Web3 Gaming are real assets which can be exchanged, or sold, for real money ( euro/dollar ) or cryptocurrencies.
Interoperability between games in Web3 Gaming
As we saw just before, all purchases made by players in a video game, called micro-transactions, which allow the purchase of characters, skins, equipment, accessories, etc. are not the property of the players. , but of the game. And the main consequence is that if a game closes, players lose all their purchases. And similarly, if a game releases a new version of its game, players also lose all their skins, characters, equipment, and have to repurchase them in the new game to enjoy them again.
GameFi games . blockchain and NFT technology, characters, skins, accessories, equipment, etc. ) between different games, whether they are from the same game publisher or not. Because you have understood, players are now the owners of their purchases and digital goods!
Web3 Play to Earn games model
Previously, in traditional video games, the player had to buy their game, then often spend more money in the game through micro-transactions to progress, and in the end, the player lost all that invested money because a new game was out, or because he was no longer interested in this game. In summary, Web2 games offer a guarantee: that of losing money in order to have fun and have fun.
But this economic model, unfavorable to consumers and players, and favorable to game publishers, is swept away by the advent of GameFi and Web3 Gaming with the appearance of a new economic model for games: Play to Earn .
Games offering reliability, fairness, security and transparency
As we explained in our guide to blockchain and cryptocurrencies, Satoshi Nakamoto's invention aimed to free itself from intermediaries and restore total trust to users. However, these benefits brought by blockchain technology now benefit the Web3 Gaming industry!
Indeed, by integrating blockchain technology into video games, they benefit from its many advantages such as transparency, fairness, security, etc. Which restores total confidence for the players!
FAQs | Frequently Asked Questions
What is GameFi ?
GameFi (fusion of the words Gaming & Finance) refers to the economic ecosystem of Web3 Games in which players can earn monetizable rewards such as NFTs or money.
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