What is GameFi and How You Can Earn Money Playing Games

New trends are surfacing each time blockchain technology evolves and disrupts the traditional systems. Since the Bitcoin invention, the innovation and development of blockchain have come a long way from cryptocurrencies to NFTs, GameFi, DeFi, and Metaverse. Numerous blockchain-based games have sprung up in 2021 and are transforming the gaming industry as a whole. 

Recently, GameFi has grown to be one of the hottest trends. It has emerged when blockchain and finance are integrated into the traditional gaming space. After the traditional financial system, blockchain is here to disrupt the global video games market. Let's look at what is GameFi and how you can start making money with blockchain-based games. 

What is GameFi?

The term "GameFi" is a combination of the words "Game" and "Decentralized Finance." GameFi is a combination of cryptocurrencies, blockchain technology, non-fungible tokens (NFTs), and game mechanics. The result of this combination creates a virtual environment where you can generate income while enjoying an immersive gaming experience. 

How do GameFi games work?

GameFi projects vary widely based on how they function. As a result, there are different mechanisms through which players can earn rewards and generate income. Some blockchain games reward players with tokens for completing in-game tasks, while other games generate revenue from the assets players own.  

Let's dive deeper into the three main features of blockchain-based games to understand how they work. 

Play-to-Earn (P2E) Model

Blockchain games developed based on the P2E model incentivize players to play and progress in the game. Players would have to keep playing and repeating specific actions inside the game to earn rewards. If they progress over time, they will earn rewards in two ways - in-game cryptocurrencies and NFTs. 

For example, Axie Infinity rewards players with SLP (Smooth Love Potion) tokens for completing daily quests and battling monsters and other players in the game. 

The second way is to earn income from P2E games is by earning and trading NFTs. The NFTs represent different types of items in the game - a character, weapon, costume, etc. Some NFTs have specific use cases in the game, which is the most innovative NFT utility. 

DeFi components 

By combining the DeFi features with blockchain games, GameFi allows us to earn income through staking. Some games enable players to earn yield by locking up their in-game cryptocurrencies and NFTs in smart contracts. The holders of in-game tokens and NFTs can stake them in gaming guilds and earn interest. If players do not have certain tokens to continue playing, they can join gaming guilds and take in-game tokens for rent. This is a win-win situation for both players and investors. A blockchain gaming guild, Yield Guild Games is the most relevant platform for this scenario. 

Asset ownership

Gamers have been trading virtual items for years in traditional gaming platforms like Second Life and Fortnite. However, these virtual economies were enclosed and operated in a centralized manner. The players would not be able to exchange their in-game assets with real-world economic values such as fiat money. 

GameFi is breaking this centralized structure so that players can exchange value and earn rewards for the time and effort spent on games. By integrating blockchain with games, GameFi allows players to have true ownership and control of their assets. As a result, players can trade in-game items as NFTs on secondary markets. They can move the NFTs cross-chain while still retaining the underlying value of the assets. 

How do you make money with blockchain games?

The amount of money you make through blockchain games depends on the skills and strategies you apply to the game. If you have no previous experience with blockchain gaming, it is best you start with simple play-to-earn games like Axie Infinity. Here is a step-by-step guide that will help you make money while playing Axie Infinity, one of the most popular games right now.

Step 1: Create an Ethereum wallet

Firstly, you need an Ethereum wallet like MetaMask to start playing Axie Infinity. MetaMask helps you store and transact crypto tokens and NFTs and interacts with other blockchain applications. If you play Axie Infinity and earn tokens, you will need an Ethereum wallet to store them. So, create a MetaMask wallet account either using the desktop version or the mobile version. You need to create a password and store the seed phrase in a safe place. 

Step 2: Get a Ronin wallet 

The Ronin blockchain is an Ethereum sidechain solution. It is designed by the team behind Axie Infinity to overcome the network congestion of Ethereum. The players of Axie Infinity will be able to enjoy fast and seamless transactions of tokens using the Ronin wallet. Create a unique password and write down the seed phrase in a safe place to get a Ronin wallet.

Step 3: Create an Axie Infinity account 

Now, you need to go to the Axie Infinity marketplace and log in with Ronin wallet to create an account. After creating the Axie Infinity account, you can name it or edit it afterward. You need to link your email and password to your account and complete the verification process to proceed. After that, you would have to link your MetaMask wallet to the Axie Infinity account. 

Step 4: Buy your first Axies 

To start playing Axie Infinity, you need 3 Axies. There are two methods to get Axies - buying them from other players in the marketplace or enrolling in the Axie Infinity scholarship program. You can deposit ETH to Ronin's wallet and start buying Axies from other players. 

If you think buying Axies is a large investment, you can enroll in the scholarship program. It is conducted by Axie owners, who will lend their Axies to you in return for a portion of SLP token earnings. Most people use a centralized exchange like Binance to cash in and cash out from crypto-to-fiat and vice-versa through their MetaMask wallet.

Step 5: Play the game and earn rewards 

Once you are done setting up the accounts and obtaining your Axies, you can start playing the game on PCs or mobile devices. When you battle with other players in the game and win, you will get SLP tokens as rewards. Another way to earn money is through breeding Axies. The game will charge you SLP or AXS (in-game token) to breed more Axies. 

Step 6: Transfer SLP tokens 

After earning some SLP tokens by playing the game, it's time to claim the earned tokens. After you claim tokens successfully, they will reflect on your Ronin wallet. Now, log in to your Binance account (assuming you have a Binance account previously. If not, you can create a Binance account). Select SLP tokens in the 'deposit crypto' option and select 'RON' for the network. You need to copy the Ronin address that is generated on Binance. 

Now, go to your Ronin wallet and select the 'send' option since you need to move your SLP tokens from the Ronin wallet to Binance. In the next screen, paste your Binance address under 'To', select SLP under asset, and enter the amount you wish to transfer. When you confirm the transaction, your SLP will be deposited into your Binance account. 

Step 7: Cash out your SLP 

After transferring SLP tokens to your Binance account, you can convert them to fiat or other cryptocurrencies like USDT. Go to Binance and select 'Fiat and Spot' and choose 'Convert' to convert your SLP into another crypto. If you want to sell your SLP directly through P2P, you can select 'Transfer' to move SLP from Spot to funding. After selecting P2P, you can get paid in your desired fiat currency and your desired bank account. 

Top GameFi games

Let's have a look at the top 5 GameFi projects that allow you to play and earn. 

Axie Infinity 

Axie Infinity is the most popular P2E game that stands as an ideal game for all the other games built on Ethereum. Players can breed and collect Axies and use them to engage in battles with other players and monsters. They can earn a considerable income by winning and trading the SLP and AXS tokens. 

CryptoBlades

CryptoBlades is an NFT-crafting game built on the Binance Smart Chain. Players would need to engage in battles to earn rewards in the form of SKILL tokens. These tokens can be sold, gambled, used to create different types of weapons, and mint characters to level up in the game. 

Sorare

Sorare is a fantasy soccer game with tradeable and collectible soccer players from real life. It rewards the participants for setting up the team, participating in virtual tournaments, and trading collectible cards. The players' cards are tokenized on the Ethereum blockchain, and players can sell them to earn income. 

Gods Unchained 

Gods Unchained is a strategy trading card game built on the Ethereum blockchain. The native tokens of this game are GODS. When the players win, they can earn in-game assets and sell them in the marketplaces to earn income. If players win ranked games, they can earn Flux which is used to create powerful NFT cards. 

Splinterlands

Splinterlands is a collectible card game that is powered by Hive blockchain. Players fight against monsters and engage in skill-based battles with other players to earn rewards. If they win the battles, they will get the native token DEC (Dark Energy Crystal) as a reward. Players can level up in the game by winning the ranked battles. 

Conclusion

GameFi is the ultimate way to earn income among the many other ways to generate income in the crypto space. You can earn income by playing the games, staking, and trading the in-game tokens and assets in the marketplaces.