Finding the perfect business model for Web3 gaming has been a tremendous task that still remains unresolved.

GameFi

Creating Sustainable Web3 Gaming Economies

How could adopting user-centric solutions like universal digital identifiers revolutionize the GameFi industry?

<p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>In recent years, both the crypto space and the gaming industry have been slowly merging together with the steady development of game finance (</span><a href="https://cointelegraph.com/learn/a-beginners-guide-to-the-gamefi-ecosystem" class="PlaygroundEditorTheme__link"><span>GameFi</span></a><span>) and play-to-earn (</span><a href="https://cointelegraph.com/tags/play-to-earn" class="PlaygroundEditorTheme__link"><span>P2E</span></a><span>) models.</span></p><h2 class="PlaygroundEditorTheme__h2"><span>The future of GameFi</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Initially coined by Yearn.finance (</span><a href="https://cointelegraph.com/news/what-is-yearnfinance-yfi-and-how-does-it-work" class="PlaygroundEditorTheme__link"><span>YFI</span></a><span>) founder Andre Conje, GameFi refers to decentralized finance (</span><a href="https://cointelegraph.com/learn/defi-a-comprehensive-guide-to-decentralized-finance" class="PlaygroundEditorTheme__link"><span>DeFi</span></a><span>) protocols with gamified elements. However, the phrase has evolved to encompass the financial aspects of blockchain games due to their inherent connection to real-world economies.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>In other words, GameFi allows gamers to play and earn cryptocurrency through various in-game activities such as battles, crafting and quests. By leveraging blockchain technology, GameFi can enable true ownership of in-game assets, allowing players to buy, sell and trade them as they would real-world assets.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>However, recent industry reports have indicated a gradual decline in the growth and adoption of the GameFi industry. An analytics report released by Messari Crypto in February 2023&nbsp;</span><a href="https://twitter.com/MessariCrypto/status/1624800534128660481?s=20&amp;t=Vg_s5A_ER7paLh5E3gxGdw" target="_blank" rel="noopener noreferrer nofollow" class="PlaygroundEditorTheme__link"><span>revealed</span></a><span>&nbsp;that the number of active GameFi users steadily declined by 34% since October 2022, with average monthly signups decreasing month-on-month.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><img class="PlaygroundEditorTheme__image editor-image" src="https://s3.cointelegraph.com/storage/uploads/view/d3f990ea9c7fe1b59c11524fa161aa65.png" alt="Source: Messari Crypto" width="1600" height="900"></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: center;"><i><em class="PlaygroundEditorTheme__textItalic">Source: Messari Crypto</em></i></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>As a result, these developments have led some experts and stakeholders to question the feasibility of GameFi’s potential to drive mass adoption of cryptocurrency as was once believed.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Despite this, there is still hope for GameFi’s revival as it slowly evolves and continues to leverage elements of traditional gaming to address some of the crucial challenges it is facing.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr"><a href="https://servedbyadbutler.com/redirect.spark?MID=169476&amp;plid=1992569&amp;setID=592928&amp;channelID=0&amp;CID=730340&amp;banID=520904434&amp;PID=0&amp;textadID=0&amp;tc=1&amp;type=tclick&amp;mt=1&amp;hc=9d0b05abc099e6dbbd1e0d20230d290c385c1eec&amp;location=" class="PlaygroundEditorTheme__link"><h3 class="PlaygroundEditorTheme__h3"><span>Advertisement</span></h3><h4 class="PlaygroundEditorTheme__h4"><span>CT Markets Pro | Up To 4 Weekly Winning Crypto Alerts | Get Full Details &gt;&gt;&gt;</span></h4></a></p><h2 class="PlaygroundEditorTheme__h2"><span>Gameplay matters</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>A significant challenge to the adoption of GameFi is the need for more emphasis on gameplay. To achieve mass adoption, GameFi developers should prioritize creating a project that not only provides real-world value and utility for in-game assets but also keeps players engaged continuously. Developing a sustainable blockchain game requires building a project that has the potential to maintain a recurring player base.</span></p><h2 class="PlaygroundEditorTheme__h2"><span>Accessibility matters more</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Arguably, the most significant barrier to the adoption of GameFi is the lack of accessibility for mainstream users. This is due to a number of factors, including the complexities associated with cryptocurrencies, such as the use of wallet addresses and private keys.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>For those new to the crypto world, the concept of wallet addresses and private keys can be complex and uninviting. Wallet addresses are long strings of alphanumeric characters that are unique to each user and are used to send and receive cryptocurrency. Using public keys as unique addresses can make them difficult for people to read, increasing the likelihood of errors. As a result, access to GameFi has been limited to those with prior knowledge and experience in the crypto world, rather than the general public.</span></p><h2 class="PlaygroundEditorTheme__h2"><span>The answer lies in identity</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>One potential solution to the complexity of wallet addresses is to implement a universal digital identifier such as a&nbsp;</span><a href="https://cointelegraph.com/news/web3-digital-identity-is-here-to-stay-but-it-has-a-long-way-to-go" class="PlaygroundEditorTheme__link"><span>digital identity</span></a><span>&nbsp;that can serve as both a wallet address and a username. In traditional gaming, players often use screen names or usernames to identify themselves within a gaming ecosystem.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Similarly, a universal identifier could serve as a gamer’s digital identity in GameFi. This would allow a gamer to not only use it as their public persona but also as a way to simplify the process of claiming rewards without the need for long and complicated strings of alphanumeric characters. This approach could make GameFi accessible to mainstream users unfamiliar with cryptocurrency intricacies.</span></p><h2 class="PlaygroundEditorTheme__h2"><span>Added bonus</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>In addition, the introduction of a universal identifier in GameFi can enable the creation of monetized reputation systems within gaming ecosystems that promote good behavior within communities. Reputation systems can incentivize positive contributions such as helping new players, contributing to game development and participating in governance, thereby promoting a healthy gaming culture.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Furthermore, this universal identifier could enable cross-game interoperability, allowing players to easily use their digital identity across games and platforms. This development can create a more connected and dynamic gaming ecosystem, leading to increased engagement and adoption of GameFi that will incentivize gamers to remain active users across multiple ecosystems.</span></p><h2 class="PlaygroundEditorTheme__h2"><span>A new era for GameFi?</span></h2><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>While GameFi has shown promise since its inception, it still has a long way to go. The implementation of a universal digital identifier will not only help GameFi gain traction but also has the potential to bridge the gap between Web2 and Web3 gaming projects. Simplifying the complex process of claiming rewards in parallel with world-class gameplay and cross-game interoperability would undoubtedly open the floodgates of mass adoption. Thus, the key to unlocking mass adoption lies in the creation of a universal identifier that will propel GameFi to increasing prominence and success.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>With the continued evolution of GameFi and the adoption of user-centric solutions such as universal digital identifiers, the gaming industry could see a significant shift in the coming years, paving the way for a new era of blockchain gaming, with the industry shedding its hype and emerging as a serious contender for mass adoption of crypto as a whole.</span></p><p class="PlaygroundEditorTheme__paragraph" dir="ltr" style="text-align: start;"><span>Kirthana Devaser is an economist turned financial writer and speaker in the Web3 space. She’s a strong believer in using technology for good and believes that Web3 will drive meaningful change and build a better tomorrow for all. Currently, Kirthana serves as the content and copy manager at XGo, where she oversees and champions all things content and brand identity across the company.</span></p>

Future of GameFi: Beyond the hype and toward accessibility through identity

What will the future of Gamefi look like?

What will spark the next bull run in crypto? In this article, we explore the case for web3 gaming

Mass Adoption Narratives: Web3 Gaming

Exploring the intersection of cryptocurrency and gaming: How to shed the label of "Web 2.5 games"?

Web3.0

2023 NFT gaming wishlist

We surveyed 2428 GameFi investors all over the world to get their perspective on the sector and insights into why they put their funds into blockchain games.

THE CURRENT STATE OF GAMEFI

The web3 gaming space has seen a surge of interest over the past year, evidenced by the unprecedented number of investments funneling into web3 games and web3 gaming infrastructure.

The History of Gaming and its Web3 Future

Thoughts on P2E and the Web3 gaming industry's future

DeFi

It was DeFi all along

In Q2 2021, GameFi's takeover of DeFi has become a target for investors to chase.  "Play to Earn" economic model designed by Axie Infinity has explored a feasible solution for chain games.

Some Thoughts On GameFi's Economic Model

GameFi Brings a New Game-Based Economic Model

<p class="paragraph"><a class="sc-3953247f-0 hparVb" href="https://hackernoon.com/u/fuadfatullaev">By @fuadfatullaev</a></p>
<p class="paragraph">GameFi, as the name suggests, is a mix of gaming and finance, and it mainly refers to blockchain games. This is a rapidly-growing ecosystem; according to data from&nbsp;<a href="https://dappradar.com/blog/dappradar-x-bga-games-report-q1-2022?ref=hackernoon.com#$2.5-billion-was-raised-by-games-and-metaverse-projects-in-Q1" target="_blank" rel="noopener noreferrer ugc">DappRadar</a>, over $2.5 billion was raised by games and metaverse projects in 2022.&nbsp;</p>
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<p class="paragraph">Despite the harsh market conditions for the overall crypto market, blockchain gaming has grown by over 2000% from 2021, and GameFi projects constitute over 50% of all blockchain activity, notes the report.</p>
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<p class="paragraph">The surge comes from increased interest from VC firms and investors in GameFi.</p>
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<h2>The Rising Popularity of Blockchain Gaming</h2>
<p class="paragraph">According to data from Crypto.com, the current blockchain gaming market is north of&nbsp;<a href="https://crypto.com/price/categories/gamefi?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">$8 billion</a>, and it&rsquo;s estimated&nbsp;<a href="https://www.bitkraft.vc/gaming-industry-market-size/?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">to grow to over $50 billion by 2025</a>; so there&rsquo;s more room to grow in the upcoming years.</p>
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<p class="paragraph">The rising popularity of blockchain gaming is also helping to spread crypto adoption among the masses. According to Chainplay&rsquo;s State of GameFi 2022 survey, at least&nbsp;<a href="https://chainplay.gg/state-of-gamefi-2022/?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">75% of GameFi investors</a> initiated their crypto investments after joining GameFi ecosystems.</p>
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<p class="paragraph">This shouldn&rsquo;t be a surprise, since blockchain and gaming have been eyeing each other across the room, they just didn&rsquo;t meet properly. Here are some ways blockchain technology can benefit and even reshape the way we see gaming.</p>
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<h2>1. Blockchain Offers Gamers Full Control of Their Assets</h2>
<p class="paragraph">In traditional video games, players have to pay first in order to play. But these investments rarely throw any money back to the player.&nbsp;</p>
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<p class="paragraph">When players acquire in-game assets, they should be able to own and do whatever they want with them.</p>
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<p class="paragraph">This is not the case, however, as most gaming systems today are designed only to allow users to access the game and their in-game assets (which they can&rsquo;t sell on in-game or secondary markets for real money).&nbsp;</p>
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<p class="paragraph">In reality, the developers &mdash;and not the gamers&mdash; own those games and those items and assets. By contrast, play-to-earn (P2E) games allow players to wholly own the assets they acquire throughout a game and sell them on secondary markets.</p>
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<p class="paragraph">This is thanks to blockchain technology, which can provide ownership of proof of authenticity of in-game items.</p>
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<p class="paragraph">However, we need to consider a few things before joining the GameFi word:</p>
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<ul>
<li>First: players should do their due diligence on knowing how a specific game works.</li>
</ul>
<ul>
<li>Study the game&rsquo;s economic infrastructure and gameplay mechanics &mdash;if both are deep and solid, then you have a potential gem.</li>
</ul>
<ul>
<li>Check who the founders are, anonymous developers are always a red flag, and check if developers have a solid reputation in the industry.</li>
</ul>
<ul>
<li>If a P2E requires a significant investment to start and the rewards are small, chances are you will lose your initial investment.&nbsp;</li>
</ul>
<h2>2. GameFi Brings a New Game-Based Economic Model&nbsp;</h2>
<p class="paragraph">GameFi uses blockchain, cryptocurrencies, NFTs, and the play-to-earn model to lay the economic foundations of the game. In most cases, in-game assets are NFTs that players can acquire in multiple ways, depending on the game, and then sold across different NFT marketplaces.</p>
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<p class="paragraph">Further, GameFi provides an opportunity to create&nbsp;<a href="https://lca-game-guild.medium.com/2022-the-year-of-gamefi-a-new-solution-of-poverty-unemployment-and-medical-care-9688e88250c3?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">virtual jobs</a> in an emergent market. An early example is the Philippines, where after a two-year COVID-19 lockdown, Filipinos found a way to make an extra income playing Axie Infinity, the most popular P2E game on the Ethereum blockchain.</p>
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<h2>3. Potential Investment Opportunities&nbsp;</h2>
<p class="paragraph">GameFi and crypto are untapped markets by a large swathe of investors and VC firms. The interest in both worlds is at its highest level, the reason why they have poured a substantial amount of capital.&nbsp;</p>
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<p class="paragraph">To put this in perspective, DappRadar revealed that Web3 games and Metaverse projects&nbsp;<a href="https://dappradar.com/blog/dappradar-x-bga-blockchain-games-report-7?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">raised nearly $750 million&nbsp;</a>in funds in August &mdash; a 135% increase from July.</p>
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<p class="paragraph">A leading investor is Andreessen Horowitz, a16z, who<a href="https://medium.com/yield-guild-games/ygg-raises-4-6m-from-a16z-to-accelerate-play-to-earn-gaming-7f5cbccce657?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">&nbsp;invested $4.6 million</a> in a game guild.</p>
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<p class="paragraph">Another important player is Sam Bankman-Fried&rsquo;s crypto exchange FTX, which&nbsp;<a href="https://www.theverge.com/2022/2/21/22944563/ftx-cryptocurrency-exchange-gaming-unit-nft-blockchain?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">announced a gaming unit&nbsp;</a>as a crypto-as-a-service platform to support mainstream crypto adoption in February.</p>
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<h2>Closing Words - The Future of On-Chain Gaming</h2>
<p class="paragraph">While GameFi could bring a new era to the gaming industry, certain issues hold back this space from reaching mass consumers, as explained below:</p>
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<p class="paragraph"><strong>More accessibility:&nbsp;</strong>chances are most gamers have heard of crypto but don&rsquo;t fully understand the basics. Crypto education is the goal to jumpstart crypto adoption.</p>
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<p class="paragraph">And since&nbsp;<a href="https://chainplay.gg/state-of-gamefi-2022/?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">44% of investors</a> believe the entry of traditional gaming publishers into GameFi is the main driver for GameFi growth in 2022, crypto education should be prioritized.</p>
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<p class="paragraph"><strong>It&rsquo;s not all about money:</strong> the over-monetization of games can become a bewildering and cumbersome factor that drives away many players from interacting with GameFi apps, hindering blockchain and crypto adoption.</p>
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<p class="paragraph">Games should have fun gameplay mechanics and compelling storylines and then create deep in-game economics where NFTs are either part of the game or revolve around it, but not force the topic of money on gamers.</p>
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<p class="paragraph"><strong>Less cost of entry:&nbsp;</strong>some P2E games require substantial investments. Some GameFi titles might choose to go with&nbsp;<a href="https://www.mmorpg.com/general-articles/the-pros-and-cons-of-free-to-play-2000104161?ref=hackernoon.com" target="_blank" rel="noopener noreferrer ugc">free-to-play</a>&nbsp;instead of play-to-earn, allowing users to play the game for free and decide if they want to buy in-game assets.</p>

Creating Sustainable Web3 Gaming Economieslg...

Future of GameFi: Beyond the hype and toward accessibility through identitylg...

Mass Adoption Narratives: Web3 Gaminglg...

Exploring the intersection of cryptocurrency and gaming: How to shed the label of "Web 2.5 games"?lg...

2023 NFT gaming wishlistlg...

THE CURRENT STATE OF GAMEFIlg...

The History of Gaming and its Web3 Futurelg...

It was DeFi all alonglg...

Some Thoughts On GameFi's Economic Modellg...

The Future of GameFi: Where Must It Go Next?lg...