What is GameFi and How Does It Work?
Modern realities and the development of human society offer ample opportunities for earning. Today, NFT games for earning are gaining popularity, thanks to which you can really make a profit. It must be admitted that such earning options are more attractive to young, if not quite young users who are well acquainted with such concepts as "blockchain", "cryptocurrency", "Gamefi", etc. This allows them not to feel like laymen in the modern world, which is increasingly becoming a digital environment and, accordingly, helps to use free NFT games to earn money.
How can I participate in GameFi? First, let's understand what NFT is. To do it, let’s briefly explain what a “blockchain” is. This is a complex platform of multifunctional type for the provision of so-called cryptocurrency services. NFTs are unique items of a digital type that are collected on the blockchain. They are used in their respective games. They can play the role of characters or any items. By improving these peculiar characters, players increase their value. After that, they can be sold or exchanged for a profit.
A gamer can sell his own NFTs, as well as earn tokens. NFT games for making money on Android are usually created on the basis of such a cryptocurrency as Ethereum (the second most popular after Bitcoin).
What is GameFi and how does it work? In fact, GameFi is the same gaming area, but with new mechanisms. They now include the use of blockchain and DeFi opportunities, which are crossed with the concept of online play that has long been familiar to everyone. A new type of GameFi games uses the Play to Earn model. And besides the fact that such projects allow gamers to get real profit for their usual actions, they also carry an important mission.
Through the gameplay, participants are taught to interact with cryptocurrency:
transfer to crypto wallets;
place on the crypto exchange ;
exchange for fiat currencies.
What does GameFi mean?
After the appearance of the first successful GameFi games, developers began to create their own characters of all kinds: hedgehogs, dogs, cows and more. Everything revolved around breeding and collecting unique pets, and some enthusiasts even created games using these NFTs and experimented with game mechanics even then.
Then, after the beginning of the price correction in the cryptocurrency financial market, many projects were frozen and developed very sluggishly. There was no funding. Over 90% failed. In addition, all these projects suffered from one problem: NFT hyperinflation due to the then popular breeding mechanics (crossing pets in order to create offspring).
As long as the growth in the number of players was higher than inflation, NFTs grew. As soon as growth reached a plateau, prices fell. Few projects survived. Many game projects have realized that they need to create their own infrastructure in order to scale.
First, thanks to the spread of decentralized finance (DeFi), game projects have been able to issue their own tokens and get solid liquidity. They made economic sense, and players could earn not only on NFTs, but also on tokens with more varied gameplay. In addition, DeFi gave staking and farming, and this time, many developers have implemented deflationary mechanisms in the economy.
If you understand what GameFi is and how it works, then the surprise that such a phenomenon was born quickly disappears. Gamers have long been accustomed to investing a lot of money in games. And those who have invested heavily have always dreamed of earning money, because many of them spend 5-8 hours daily in gaming universes.
And they found such ways, but here they always had to act “on the verge”. Because the developers forbid by the rules to sell game currency, characters, items and other virtual values for real money. GameFi solves this problem. After all, GameFi projects are created on the blockchain. And the participants do not earn some virtual gold coins, but a real cryptocurrency traded on crypto exchanges. But more importantly, the earning potential here is simply unrealistically high.
The GameFi industry allows developers to create new metaverses and game worlds. All these worlds now have their own economy, attracting a lot of users. And now, in the field of GameFi, all major genres are represented – from economic simulators and strategies to RPG and FPS. NFTs fit perfectly into this trend. If at first NFTs were just collectibles, now they allow you to implement a full-fledged digital economy in virtual universes.
How Do You Make Money on GameFi?
How do you make money on GameFi? Earnings in GameFi are made by making transactions. Having created a new interesting object in the game, you can try to sell it. Naturally, the item must be “pumped” (improved) in order for it to acquire greater value. Is GameFi free? Such items can cost tens, hundreds or even thousands of dollars. Today there are more and more NFT games in which you can earn money. They are becoming more and more interesting, offering participants new original opportunities.
Each of these GameFi projects is based on the use of NFT GameFi tokens. Therefore, it is fair to say that the GameFi industry and NFTs are closely interconnected. Therefore, the growth of one of them leads to the development of the other and vice versa.
How Сan I Participate in GameFi?
How to invest in GameFi? First you need to choose the best GameFi project with good conditions for making money. To do this, several factors must be taken into account: the blockchain of the project, its popularity, marketing strategy and technology aspects.
The size of the commissions depends on what blockchain the game is built on. The most expensive commissions are typical to blockchain games on Ethereum, since this cryptocurrency is the oldest and most famous.
The more popular the project is, the higher the entry threshold and competition level are. Entering a little-known project will be much easier and cheaper, but there are no guarantees that the game will eventually "shoot". Popular projects are more stable, but the entry threshold is higher. The more active the marketing campaign is, the more likely it is that the value of the token will increase.
What does GameFi mean? There is an opinion that P2E games are pyramid schemes that depend on a constant influx of new players. Is it so? This is not true. Fraudsters always find new tools to get into people's pockets behind the screen of the game. Before investing in a game, you need to conduct your own analysis of the project. An important indicator of the quality is the people behind it. It is worth paying attention to the openness of the team, the funds invested in the game, as well as the token. A good tool is quickly picked up by traders, which increases the liquidity of the token.
Is GameFi Free?
How do you make money on GameFi? Is GameFi free? GameFi requires an initial investment. How much does it cost to start, how big is the risk of not paying back the investment? Are there any games where you don't need to buy anything at the start? In most cases, you can enter the game without investments and start getting internal game tokens. There are also games on the market that require an initial investment to start: from $2 to $10 thousand, and sometimes even higher. The payback period can also be completely different: from a few days to a couple of months.
How can I participate in GameFi? How much can you really earn playing, and how much time do you need to spend on it? What are the associated costs in the game (commissions, transaction fees, new game objects)? The games have completely different mechanics. As a rule, the amount of time spent in the game is not directly proportional to earnings. For example, a project may have daily quests or game "energy" that needs to be spent. This takes a couple of hours. Further, the user, if his goal is only earnings, can return to completing tasks the next day.
Experienced players do not immediately sell earned tokens on the market, but save them up and sell at a favorable price, even if it takes a long time. The fall in the price of the token repels some of the players. They may temporarily or permanently leave the project. Players who understand cryptocurrency accumulate assets in order to profitably sell it during a bullish trend. This is usually done by those who have already paid off their investments or users who see the prospects of the game.
What does GameFi mean for investors? From an investor's point of view, GameFi, with the right and skillful approach, can be a full-fledged source of income. To earn money, you need to diversify resources and skillfully rent out your purchased NFT items to other users and players.
It is worth tracking the releases of new games, keeping an eye on the game development teams, the funds that support the game, and the community of projects. It is worth moving from the status of a player to the status of an investor only after you manage to test the games from the inside and understand the mechanics of earning. As in any investment activity, it is worth remembering that you need to invest in a project as much as you are willing to lose.