NFT, GameFi, and Play-to-Earn have had a steady decline in popularity in recent years, but they continue to be highly popular and to expand rapidly, progressively competing with conventional sports. NFT games are also the primary factor now preventing the market from imploding. You can visit Chainplay for more top NFT crypto games. These games have already distributed billions of dollars in in-game incentives, and individual players earn more than the best conventional ESports players. Too appealing, right?
In this article, we'll discover what this trend is all about and if it has the potential to become a game-changer or is only a refreshing summer breeze.
The impact of NFT and blockchain technologies on the gaming market
Blockchain technology and cryptocurrencies are enhancing the Internet's founding principles. Similar to how modern internet users do not need to comprehend TCP/IP or computer languages like Javascript in order to gain from the internet, they do not need to grasp blockchain in its entirety in order to benefit from it. NFT is one of the most significant applications of blockchain technology since it grants artists uncontested ownership of their products, such as art, games, collectibles, novels, and more. NFT is an open source, censorship-resistant platform that enables creators to freely produce and earn money, totally peer-to-peer and without middlemen such as app stores and record labels.
The most interesting use of NFT is its potential to revolutionize conventional games. NFT will enable game creation and ownership by the player community. According to Yahoo Finance, the worldwide games market has a Total Addressable Market (TAM) value of $173 billion, with a projected market value of $314,4 billion by 2026.
According to Jeff Zirlin – co-founder of Axie Infinity, the largest blockchain game to date – shared: “It is clear that games will facilitate the inclusion of many people on Web3 and by doing so, ensure that the future of the Internet will be open and user-owned"
What is a “Play-to-Earn” Game (or NFT Game / GameFi)?
Play-to-Earn is a sort of gaming where players may earn real money by playing NFT Games published on the blockchain. Specifically, users will gain perks or prizes for playing or collecting in-game objects for exchange, purchase, or sale. The item's worth is determined by market considerations such as application, scarcity, popularity, or even FOMO.
From the second part of 2020 until the present, this tendency has been developing for a very long period. This is also when the COVID-19 epidemic began to spread. Currently, many cities throughout the globe are under siege, enforcing extended social isolation that has resulted in many individuals losing their employment and being forced to pursue other means of income. Currently, this kind of video game remains quite popular because of its entertainment, enjoyment, and prizes.
The market for games, in general, and the market for NFT games, in particular, are particularly appealing and promising. The global gaming industry has grown substantially during the last decade and is projected to reach $200 billion by 2023. In 2021, the entire market capitalization for NFTs climbed from $338 million at the end of 2020 to $22 billion. The blockchain-based gaming sector has enormous potential to provide players with several ways to enhance their revenue, since a significant portion of its concentration is on games.
Background of the birth of GameFi
The "pay-to-play" business model for video games gained popularity in the 1970s and was the most popular model until the late 2000s. Under this arrangement, creators profit from the sale of the original game as well as any required hardware. Traditional game producers might offer downloadable material (DLC) and in-game goods like skins in an attempt to extract additional value from their gamers. Players may only get value from a game in the form of pleasure (and possibly resale of the physical game).
Through the extensive usage of the internet, the "free-to-play" model emerged in the late 2000s. Although the "pay-to-play" model continues to make certain games successful, the "free-to-play" model has won over since players may engage online without paying in advance. The developer generates revenue via in-game sales, DLC packs, and advertising, while the player generates revenue from broadcasting and eSports. Fortnite, which began in 2017 and had over 80 million monthly players generating over $9 billion in revenue in 2018, is a wonderful "free-to-play" example. Players may purchase in-game items such as weapons, skins, tokens, and DLC packs such as the Battle Pass, however they cannot be sold or exchanged due to the producers' monopoly. This has led to disagreements between developers and players.
The new blockchain-based 'play-to-earn' paradigm aims to enable creators to monetise video games while spreading ownership of blockchain-based economies to players. The distribution of ownership in the form of in-game tokens and non-fungible tokens offers players the chance to influence the game's development and monetise their playtime. In addition, they may buy in-game assets (akin to the "free-to-play" model) to enhance their experience, but they will always retain ownership since these assets are recorded on blockchain. This indicates that game assets may be purchased and sold on the market and that speculation has been introduced into the game economy. Currently, the most popular "play-to-earn" game is Axie Infinity, which employs the identical breeding and battle principles as the Pokemon card game, with the exception that the Pokemon-like characters (Axies) are zero cards. replaceable (NFT) transactions are recorded on the Ronin blockchain.
Connect with the NFT Ecosystem
Before Axi Infinity, the 2017 release of Crypto Kitties as a non-fungible token (NFT) opened the crypto market for blockchain-based games. To understand why, let's review quickly what it is to be replaceable, and then we may discuss irreplaceability. A fungible asset is an asset that can be readily replaced by something identical, generally a token or currency. If someone gives you a ten dollar note, you may repay it with another ten dollar bill, or even two five dollar bills, since there is nothing special about bills of the same amount. certain. Now, if someone gave you a rare Pokemon card and you did not return the exact same card, they would have every right to be upset. Different qualities of Pokemon cards make them simpler to recognise (and more valuable). This is the nature of irreplaceability. If every Pokemon card is placed on the blockchain and its different qualities (set, condition, rarity, etc.) are recorded, then an NFT is created. In blockchain games, these NFTs appear as distinct characters, skins, weaponry, and in-game stuff. Each item's ownership is recorded on the blockchain, and its history can be traced back to the very beginning.
This uncontested ownership reduces the ownership barrier experienced in "free-to-play" games and paves the door for creativity. This also implies that non-players may engage in the game by speculating on the prices of different in-game products. If you believe that a certain character or skin will be valuable in the future, you may speculate on it without even playing the game. This leads to speculative volatility and impacts the "play-to-earn" economy.
Connecting to the Decentralized Finance (DeFi) Ecosystem
GameFi is an amalgamation of the "play-to-earn" gaming concept with DeFi's decentralized trade, lending, and staking characteristics.
The "play-to-earn" approach utilizes incentive tokens that are tradable, loanable, and leverageable through different DeFi technologies. When gaming and DeFi are merged, gamers may earn tokens by playing and then make extra income by betting on or lending tokens. These DeFi principles are also applicable to the NFT assets required to play the game. At the height of Axie Infinity's popularity, the entrance fee was roughly $1,000, prompting early players to lend their non-fungible tokens to new players in return for a part of their gains. Many proponents of "play-to-earn" and DeFi assert that this convergence will ultimately liberate gamers from game creators' overreach and may even grow into a type of universal basic income (UBI).
The primary DeFi aspects implemented into the "play-to-earn" arena are decentralized exchanges (DEXs), staking programs, and lending programs, but with increasing synergies as NFT and fractional controls are created.
The importance of GameFi
GameFi has been a buzzword in crypto circles over the last year. This popularity has also transferred to data on the blockchain. In the past two quarters, about fifty percent of active wallets participated in blockchain games, and more than twenty percent of all NFT sales in 2021 were game-related purchases.
The trend has existed for quite some time, but why has it now exploded?
As stated above, there are two reasons why Play-to-Earn is so popular:
- Leveraging NFT technology for "Play-to-Earn" games
- Guarantee ownership
Some games provide players with cryptocurrency, while others let players gather NFTs and sell them for a profit in the future. For traditional games, the host organizations have complete authority. Gamers earn a great deal of money via in-game transactions, yet they never really own the stuff they purchase. In contrast, blockchain-based games are altering this paradigm. If you purchase an NFT in-game item, you own it solely and have complete rights to buy, sell, donate, and give away the item... Due to the proliferation of NFT, several blockchain game initiatives are taking form, indicating that this might be the new future of the gaming industry.
With the introduction of CryptoKitties in 2017, the NFT gaming industry has been around for a while. Previously, players could only purchase or hatch eggs to hatch NFT cats. Then, the second generation of games, such as Axie Infinity and The God Unchained, emerged. At this time, gamers may take their NFT items into combat against other players, therefore increasing their value.
Popular "Play-to-Earn" games enable players to earn extra cash in their leisure time.
\Several fresh initiatives are now on the approach of becoming the second unicorn in the Play-to-Earn industry. Axie Infinity is now the most prominent brand.
✔️ Axie Infinity
Launched in 2018, Axie Infinity is an Ethereum-based blockchain game starring beautiful animals called Axies. Each Axie is unique, having strengths and weaknesses dependent on its genetic makeup.
Players may earn AXS while playing the game. AXS is a governance token inside the game that grants users the power to vote on significant issues. Additionally, it functions as a currency in the Axie market. Soon, players will be able to stake AXS to gain more tokens. This is a blockchain-based gaming enterprise that was established by Vietnamese individuals, to our nation's great credit.
Axie Infinity is very popular in the Philippines and Venezuela, two nations experiencing an economic crisis as a result of Covid-19. Due to poor income and possibly job loss, individuals are compelled to seek other sources of revenue. Currently, Axie is a lifeline for them, providing both entertainment and income. In only one month, the value of the tokens held by a large number of individuals has soared by thousands of percentage points.
✔️ ALICE – My Neighbor Alice
In addition to being a single-player game, My Neighbor Alice is also a multiplayer game based on the Chromia network and published in March 2021. The gameplay is quite basic. You may purchase virtual islands, gather in-game things, and interact with other players in the game. You may also do tasks or assist "Alice" neighbors to win prizes. You may use these prizes to purchase in-game assets and then sell them on NFT marketplaces that support them.
These non-game-objects may be anything in the game. Whether it be buildings, animals, plants, or ornamental objects. Users may sell these commodities, but they may also rent them to others.
ALICE is a game-specific ERC-20 utility coin. Users use it as a means of trade and to acquire non-fungible tokens that represent in-game assets.
✔️ CryptoKitties
Dapper Labs published CryptoKitties, one of the early blockchain games, in November 2017. It gives users the ability to breed and acquire virtual cats on the Ethereum blockchain. After assembling a collection, users may compete in matches and solve puzzles in KittyVerse. Compared to Axie Infinity, CryptoKitties is still a heavyweight, with up to $30,000 in daily sales, according to NonFungible statistics.
✔️ Sorare
Sorare is an NFT Play-to-Earn fantasy football game. You may go from standard fantasy football games to Sorare, a lush land that allows you to construct and manage your own virtual club. Contains digitized NFT playing cards. The cards are legally licensed and depict a genuine soccer player during a certain season. Nicolas Julia and Adrien Montfort are the creators of Sorare. In 2018, the game was launched. Sorare is a popular non-fungible token (NFT) game on the Ethereum network, with daily token sales of about $159,000.
The games listed above are just a few of the excellent "Play-to-Earn" games currently available. There are several comparable games available on the market. The games have various themes, but the most have a characteristic associated with DeFi goods. For instance, players must wager tokens or non-fungible tokens in order to engage in the game's features. In addition to granting the power to vote on desired improvements, staking governance tokens generates important dividends. In addition, the duration of payback in various NFT games depends in part on chance. For instance, eggs that are fortunate to hatch with excellent animals or to accumulate valuable objects might be resold for several times the initial investment.
After you've joined and played the game, keep an eye on the project's community to see if it's active. Next, aggressively determine whether the project can be executed as planned or if it is only a sketch, and then assess which initiatives have promise. Then, in addition to competing to win money, anyone may purchase tokens on the market and keep them if they support the idea.
✔️ Epilogue
The world is seeing the buzz around cryptocurrencies and non-fungible tokens, prompting the issue of what will occur in the next 12 months. However, it is anticipated that the trend of Play-to-Earn and NFT games would continue until 2022. Investors may purchase tokens on an exchange and then wait for the price to increase, or they can immediately participate in the game to earn prizes. seek profit by NFT purchasing and selling in-game. Lastly, entering the game early will provide you with a number of benefits since the more rare the NFTs are, the more valuable they are, but as the number of players increases, the NFTs will become more scarce.
In addition to currencies that have appreciated significantly, such as AXS, you may seek for possible projects that have not appreciated much yet or are due to release new goods in the near future in order to have a good entry point for purchasing tokens.
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