Defi in GameFi is Trending Staking Lending Borrowing NFTs and More
There are different methodologies in the Defi space. The blend of gaming and DeFi is known as GameFi.
GameFi focuses on rewarding users/players with the opportunity to earn tokens, rewards or coins when they perform specific game-related tasks like winning battles, mining precious resources or growing digital crops.
Thus, in a Game Fi environment, DeFi-related transactions like staking, mining, and token-based transactions lending and borrowing take place
GameFi and DeFi are related in a way. The user should have an asset to lend or invest in an exchange. By being a part of GameFi users will be able to get the asset in the form of tokens or coins. They will be able to earn the tokens or coins by performing game related tasks.
These tokens from the GameFi are designed to function as full-fledged cryptocurrencies. Thus, users will be able to use the tokens in the ecosystem. Thus, the GameFi user will eb able to invest the token they earn in a liquidity pool and earn interest applicable on the offered APR.
GameFi is different from regular video games. For instance, the Virtual World Roblox’s will give Robucks as a reward. In the Pokemon World, there’s the Pokemon Dollar, which is the prize money for wining battles.
Thus, Robuks and “Pokeman Dollar” cannot be easily or legally sold outside of the games – they are meant for use in the game and they cannot be converted to cash outside the gaming environment. However, in GameFi, players will be able to theoretically convert the in-game winnings into cash in different decentralized exchanges, which facilitates the process.
For those who are new – to get to know DeFi Concepts:
Liquidity Mining: The liquidity mining is very important in GameFi. For instance, the liquidity mining pools in the GameFi, DeFi Kingdom comes in the form of in-game “gardens.”
The Liquidity Pool (LP) shares are represented as a plots filled with blooming plants, which grow in accordance with their yields. Users will be able to earn JEWEL tokens, which is the game’s main token that is used for purchasing in-game NFTs or liquidity mining outside the game.
Staking: The staking function is a common theme in DeFi. Staking is also with the coming of GameFi made applicable in the blockchain gaming realm. For instance, staking support for Axie, where users can lock in AXS tokens to secure the network and they get paid rewards. This went live in September 2021. Mobox also provides users with the option to earn MBox tokens through staking.
Apart from this, staking rewards will be used to purchase in-game items or upgrades or even generate keys to unlock new NFTs. Staking with Mobox requires users to add to a liquidity pool and earn tokens based on the pool’s APY. Several smaller GameFi projects have introduced staking to their games as well.
NFT in Gaming: Non-Fungible Tokens, or NFTs, are certificates of ownership of a digital good made in limited numbers. NFTs are now made possible in games. For games, this can be in-game items, collectibles, and avatars.
NFT Games for Play-to-Earn in 2022: Mines of Dalarnia, My Neighbor Alice, Mobox, Axie Infinity, Illuvium, The Sandbox, and Aliens World.
Fractionalization: Fractionalization is essentially a whole NFT divided into smaller fractions, providing claims of ownership to different people like the case of Gustav Klimt’s painting The Kiss, whose digital version was sold as 10,000 fractional NFTs. Owners of fractionalized NFTs can then trade their assets on the secondary markets to make money. It is lost similar to real estate crowdfunding.
How do GameFi companies make money?
Game developers usually receive tokens for their work, so the more people play the game and trade the coins, driving up coin prices, the more money they make. Some games also charge fees on certain transactions, and that money flows into the efforts’ related companies or treasuries, from which developers get paid.
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