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    Dennis Y.

    GameFi Trend: Games, Crypto and Big Money Bags


    The growth of the crypto gaming sector and GameFi tokens should be considered as one of the biggest trends of 2021. Just imagine: AXS token from crypto game Axie Infinity rose more than 1,500% in just 3 months. Let's dig deeper into what's happening in the crypto gaming industry (aka GameFi), and what its prospects are.

    What is GameFi

    Crypto gaming projects are growing in popularity very fast. GameFi term was created from two words: Game and Finance (like DeFi = Decentralized Finance). The first crypto games emerged in 2013. But the rise in popularization took place this year, and late summer, GameFi boomed. For instance, the makers of one of the most successful games, Axie Infinity, earned $800+ million last month.

    How the GameFi is Built?

    In crypto games, in-game characters and items are often NFTs (common, rare, and super unique). Players create unique characters, adjust and upgrade them, then exchange them for cryptocurrency.

    Some in-game tokens are relatively successfully traded on cryptocurrency exchanges and DeFi platforms (one of the prime examples is SLP from Axie). And in some countries, they are even accepted in local offline stores

    An Important Feature of GameFi

    GameFi combines DeFi with a game that includes NFTs. Instead of dealing with complicated and uninteresting financial mechanics, you can dive into a virtual realm (or even metaverse), and make some money by playing.

    Here is a very influential point: the DeFi boom is still not enough because it's too complicated for people outside of crypto to understand its financial mechanics.

    And that means that attracting them and getting that proverbial Mass Adoption without proper gamification is extremely difficult. The game form is helping to solve this problem. And, as we can see, it has given birth to more spread.

    GameFi Sectors

    The GameFi segment can be roughly divided into several categories:

    • NFT games of various genres using the Free2Play and Play2Earn models;
    • Game worlds or Metaverse;
    • Projects that provide tools for the development and distribution of NFT games, as well as for the translation of existing online games to blockchain;
    • GameFi launchpads;
    • Projects that allow the use of NFT in DeFi services, etc.

    A Brief History of GameFi's Expansion

    Blockchain technology has been making inroads into the gaming industry since 2014, when the first online casinos began accepting Bitcoin deposits. But it wasn't until the advent of NFTs, which let players be full owners of digital characters and items. And where ownership appears, commercial relationships are born.

    Back in 2017, the CryptoKitties project with NFT kittens, which could be bred and sold for tens of thousands of dollars, demonstrated that you can not only spend money but also make money in online games.

    However, it wasn't until 2021 that a critical mass of developers and players accumulated, leading to the formation of an entire market segment - GameFi. 

    The name, coined in 2020 by famous developer Andre Cronje, refers to the entire variety of crypto games, including those using NFT.

    What's new in crypto games that allow us to call them GameFi?

    • You can use DeFi's options (farming in-game tokens or lending/borrowing them). And now it's not complicated and boring.
    • You can change the game world with your actions and tokens you've collected (somewhat reminiscent of the governance in DAO).
    • You can stake your token/assets to receive some passive earnings.

    Tech Basis for GameFi

    Games built-in 2020 and earlier are predominantly running on the Ethereum blockchain. However, high fees have forced developers to switch to cheaper and faster solutions. Some games were released on Polygon (Matic), EOS, Tron and Wax blockchains. BSC is also picking up in interest since the beginning of 2021. In addition, specialized blockchain platforms, such as Flow, adapted for use in the gaming industry and the simple creating of NFTs, have been launched.

    What's the Reason for GameFi Popularity?

    The GameFi industry is rapidly growing thanks to the fast-paced expansion of decentralized ecosystems and evolving gameplay. Of course, the catalyst for the development of GameFi is mostly young people, but there are a number of crypto card games, and there the average age of users is much higher.

    NFT is also helping to boost the growth of GameFi, which is mainly driven by young people, but there are projects where participants play cards, and the average age of users there is much higher.NFT is no less a driver of popularity. Investors now can earn from selling their unique characters, weapons, artifacts, etc.

    Further development of the crypto games market is quite probable. However, the token prices can be strongly connected with BTC price as the main indicator and factor of the crypto market. Therefore, if Bitcoin collapses significantly, GameFi projects will undoubtedly fall as well.

    GameFi + Metaverse Impact

    The new wave of interest in GameFi is a chain reaction from the wild surge in popularity of Metaverse, which peaked on October 28, 2021, when Facebook (now Meta) co-founder Mark Zuckerberg spoke at the Facebook Connect 2021 online presentation and announced the company's new course to work in Metaverse global course. This means a potentially huge investment flow, and it also brings in a lot of hype among the masses. Immediately, the price of almost all the Metaverse-related tokens (MANA, SAND, AXS, ENJ, etc.) jumped up.

    All this positively influenced the development of GameFi projects. Especially since some projects are working at the intersection of these two spheres (GameFi + Metaverse). But mostly at the moment, it's just a matter of crazy hype in the market.

    What is Important to Remember When Evaluating a GameFi Project

    First, one needs to carefully study the project in which one intends to register. There are a ton of scammers who clone crypto games, which actually run according to a Ponzi scheme (pyramid principle). Check if the in-game tokens are listed on crypto exchanges. If they are traded, there is a better chance that this GameFi project is not a scam. But this is not a 100% guarantee (tokens may be easily delisted by CEX). So you have to be careful.

    Also consider the project's marketing strategies, the growth of the gaming community, the overall gaming comfort, engagement, and technological quality of the game (whether there are a lot of bugs, whether you want to play or on the contrary, you want to delete this game and forget as a nightmare).

    You should also keep in mind the financial mechanics and difficulty of the game. Moreover, in some GameFi projects, tokens can be locked as collateral or used for farming. Such games demand more knowledge of the cryptocurrency market from the player.

    Most Famous GameFi Projects

    Since the beginning of 2021, the number of crypto games has grown manifold. By Playtoearn Rankings, there are more than 360 Free2Play and Play2Earn online games where you can interact with NFT items and earn crypto. They cover all known game genres, from card games to economic simulators, strategies, arcades, and races.

    Top 20 GameFi with monthly highest users (by Coin98 analytics)

    Axie Infinity

    This summer game made a lot of info noise, receiving mentions in Forbes and other mainstream media.

    Axie Infinity was developed by Sky Mavis, a Vietnamese studio. The creators were inspired by the success of CryptoKitties in 2017 and combined its basic principles with another popular game, Pokémon Go. Axie Infinity's gameplay is built around Axie creatures, each of which is an NFT token.

    Axie Infinity's popularity skyrocketed in June 2021, and in August it was already being played by more than 1 million people daily. Meanwhile, monthly sales on Axie Infinity's own marketplace, where in-game items are bought and sold, reached more than $1 billion. Sky Mavis revenue from Axie Infinity from 2018 to July 1, 2021, was only $21 million, but then in July and August, that figure rose to a fantastic $485 million.

    My Neighbor Alice

    It's a multiplayer blockchain game in the mixed sandbox and social simulation genre being developed by Antler Interactive. It's scheduled for release in spring 2022, but the ALICE token, launched on the Binance Launchpool in March 2021, is already capitalized at more than $300 million.


    This is a decentralized RPG with an NFT collection that will run on the Ethereum network. It is scheduled to launch in late 2021, but the ILV token already has a capitalization of more than $250 million, having risen more than eight-fold over the summer. Stacking with an annual return of more than 85% has contributed greatly to this. In anticipation of the release, ILV holders were able to earn both staking and token price growth. Staking fees paid in ILV tokens are locked in for 12 months, saving the token's price from selling pressure.


    A special category of crypto games are virtual worlds (it's right about Metaverse term), where players can own digital assets and lands in the form of NFTs and use them as part of the game's economy.

    The most famous tokenized virtual world is Decentraland. This project began to be developed by a group of enthusiasts back in 2015, but did not have a public release until early 2020.

    Land plots in Decentraland are purchased for a variety of purposes. They are rented out, virtual buildings are constructed on them, mini-games, casinos, shopping centers with NFT items and sites for advertising are opened.

    More than 45,000 digital lands were traded at auctions in 2017-2018, each corresponding to the LAND token, confirming ownership. Lands can now only be purchased on the secondary market.

    Decentraland's largest digital real estate deal took place in June 2021: investment firm Republic Realm purchased a block of 259 virtual plots for $913,000. And the cheapest LANDs can now be bought on the in-game marketplace for $4,000-$5,000.

    As already mentioned, the number of GameFi projects is enormous, and it is increasing every day. Let's name just a few more (honorable mentions):

    • CryptoBlades
    • My DeFi Pet,
    • Sandbox
    • Somnium Space 
    • Alien Worlds
    • League of Kingdoms

    Outlook for the GameFi industry

    As GameFi attracts more and more attention, it will create more compelling and challenging games, and further lead to more sponsors and investors in the DeFi space. Traditional GameDev expansion to crypto (Ubisoft, EA, Epic) is also expected.

    The financial success of Axie Infinity is pushing hundreds of teams around the world to release crypto games in different genres, so we can expect many interesting releases in 2022.

    Risks of GameFi

    However, there are potential risks as well. Most of the existing GameFi projects are primitive in terms of graphics (often at the level of flash games of the early 2000s) and have monotonous gameplay. IT leads to a quick loss of interest in these particular games. In terms of player engagement, they are still a long way from the top online multiplayer games such as World of Tanks, Fortnite, or World of Warcraft, where millions of players literally live for years.

    In addition, existing economic models in Play2Earn games are only sustainable with a steady influx of new players with their money and hopes for a quick return on investment. It is likely that if the popularity of these primitive games drops, NFT items and game tokens will depreciate rapidly too. 

    Not financial advice: it looks like game tokens are good for speculative goals during the rise in popularity of new crypto games, but hardly suitable for long-term investments.

    Bottom Line

    The GameFi segment has a promising future. Developers get new instruments to make their games better, more famous and more profitable for them and for players. Millions of players all over the world get a great opportunity to join gameplay with earnings. But be careful, remember all the risks. Combining and balancing these two approaches, you can get your benefits from crypto gaming aka GameFi.

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research. This text is not a guide to action. The author's opinion may not coincide with the opinion of CoinJoy