GameFi Industry: An In-Depth Overview

2021 was a year of the blockchain games' rapid growth and wide adoption. Today GameFi is a trend that has every chance even to surpass DeFi. Let's take a closer look at the GameFi concept and the projects operating in this field and find out how they generate income.

What is GameFi?

GameFi is one of the most discussed topics in the crypto industry, gaining popularity and increasing the scale of use. GameFi is a combination of the words "game" and "finance" and stands for monetization of the gaming experience. Of course, there’s nothing new about making money playing online games, but with the emergence of GameFi, players have gained many more unique opportunities because it implies blockchain technology and decentralized finance (DeFi).

Unlike traditional video games, which offer a “play-to-win” model, where players invest their time and money to gain an advantage and win the game, GameFi projects propose a “play-to-earn” model. That means not only the player develops and grows in the game, using one’s knowledge and skills, but also receives rewards for it.

Another feature of GameFi projects is running in a distributed blockchain registry. So, if a player acquires particular objects in the game - such as avatars, artifacts, weapons - one becomes their sole owner.

The history of GameFi

GameFi technology roots go back to 2013, when cryptocurrency was not as common as now, but game developers have already started implementing it in their projects. For example, the first attempts were taken in Minecraft, where servers were integrated with the Bitcoin blockchain. Another example is the online game Bombermine.

However, the GameFi industry developed rather slowly until it became a breakthrough in 2021. The reason was the introduction of NFT and DeFi. At first, GameFi projects were mainly built on Bitcoin and Ethereum blockchains. However, over time, game developers started to look for more profitable initiatives with lower fees and higher transaction speed. So now, DeFi projects are also designed on Cardano, Solana, Polkadot, and Binance Smart Chain.

How DeFi projects generate income?

There are many GameFi projects that offer different mechanisms for making money. Usually, such games provide three main directions of making a profit: NFT, play-to-earn, and DeFi. Let’s take a closer look at them.

NFT (non-fungible token)

Unlike other coins such as BTC or ETH, one non-fungible token can’t be exchanged for another. NFT is a digital item connected to a blockchain. It can be an image, 3D picture, video, music, game stuff, etc.

So what do NFTs have to do with DeFi? NTF is a kind of certificate that proves the right of possession, and in the game process, NFT enables the players to claim ownership of any object acquired (received, earned) in the game.

As with regular video games, users can own avatars, weapons, territories, resources, and even pets, depending on the specific gameplay. Players can sell NFT items acquired in the GameFi project on cryptocurrency exchanges, thus generating profit.

Play-to-earn 

Some GameFi projects reward players for completing missions or achieving different game goals. Usually, players receive financial rewards in native game tokens, locked in the smart contract beforehand.

DeFi (decentralized finance)

DeFi is a concept of a financial system that does not imply the participation of intermediaries such as banks, exchanges, or other financial institutions. Instead, all transactions and settlements take place on blockchain smart contracts. DeFi tools used in GameFi projects include farming, staking, P2P lending, launching new tokens, etc.

Other earning opportunities in DeFi:

rent out digital objects;

bet on competitions outcome and earn for correct predictions;

participate in tournaments.

DCD Ecosystem

The DCD Ecosystem project aims to create a favorable environment for all the GameFi participants -  players, developers, game operators, affiliates that will gather under a unified protocol of DCD Ecosystem.

The DCD Protocol was created by an experienced team of developers who aim to suit the needs of all the market participants and unite them in one ecosystem, offering them transactions with simple staking and the opportunity to receive rewards providing staking to smart contracts.

The internal DCD token is at the core of the ecosystem, ensuring low fees and backing to fiat currencies, assuring that the token price increase will not affect the fees.

Benefits for game developers

The team aims to develop the protocol, implement different solutions and integrations for online game projects, and deploy SDK and full technical documentation. In addition, the ease of use and versatility of the system will facilitate game development and foster integrations into the DCD Ecosystem.

The platform is built using popular programming languages such as C#, C++. 

Benefits for players:

The platform is user-friendly

Trustless system

Security of player funds

Instant payouts

Transparency of game statistics in blockchain

That is, the DCD Ecosystem approach will solve all the current drawbacks of modern online games. 

Benefits for game operators

Easy launch with minimal costs

Automatic funds distribution

Expansion of user base

Benefits for affiliates

Transparent affiliate program

Full statistics on blockchain

The affiliate program will allow players to invite more users and receive rewards.

Conclusion

A multibillion GameFi and blockchain games market is named as one of the major trends of 2022 that promises many opportunities both for players and investors. GameFi is a new niche in the blockchain industry at the nexus of two fields – decentralized finance and decentralized games. GameFi is far from being a simple online game. GameFi are gaming platforms that allow users to get profits in digital coins from gaming. On one side, it improves user retention rates, on the other – it helps users earn real money within a game.