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GameFi: All You Need To Know

What is GameFi?

Blockchain-based gaming platforms with the ability to earn are becoming more and more popular every year. The Play-to-Earn model combines game mechanics, elements of metaverses, DeFi and NFTs. Some online casinos accepted bitcoin deposits as early as 2014 and can be considered the prototype of GameFi. However, the explosive growth of interest in projects of this kind came in 2021.

GameFi features

In blockchain games, players can create their own unique characters, upgrade them, sell and buy from other players, as well as weapons, artifacts and other items. Each object is represented as a unique token – NFT.

Payment is made in tokens of the gaming platform on which the game is based. The internal currency of popular projects is already going beyond its platforms and is being traded on crypto exchanges. Buying and selling game currencies is no more difficult than exchanging Polygon for Ethereum.

GameFi is becoming more and more popular due to the dynamic development of gaming and decentralized applications. NFT also plays an important role in popularization. However, the cost of tokens can change significantly under the influence of the Bitcoin exchange rate. Therefore, against the backdrop of a general market decline in 2022, GameFi projects also lost significantly in value. However, this is most likely a temporary phenomenon.

Safety rules in GameFi

To enjoy the game and earn money sounds tempting. However, there is a risk that not you, but someone else will earn on you. Follow a few simple rules:

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Before registering in a blockchain game, carefully study the project and make sure that this is not a fake platform. One of the main checks is the presence of internal token trading on well-known crypto exchanges. Unfortunately, there are many scammers on the network who can create a pyramid instead of a real blockchain game.

Study the marketing strategy of the game platform developers and the technical aspects of the project. The more active promotion, the more players and, accordingly, the growth in the cost of internal tokens. Don’t forget to also check the game for serious glitches, freezes, etc.

Consider the difficulty of the game. You will most likely need knowledge of the crypt and the crypto market at the same time as purely gaming skills. If you are an absolute beginner, it is better to start with relatively simple games.

By following these simple rules, you can choose a real blockchain game and earn money by playing it.

Security aspects in GameFi

GameFi projects are on the list of attractive targets for hackers along with crypto exchanges, popular DeFi projects, cross-chain bridges, etc.

An infamous example is Axie Infinity. In 2021, the popularity of the blockchain game skyrocketed and it became the leader in terms of NFT turnover ($3.5 – $3.85 billion), which attracted the attention of attackers.

At the end of March 2022, the Ronin Bridge sidechain that was used in the game was the victim of one of the largest hacks in the history of DeFi. Hackers withdrew more than $625 million worth of cryptocurrency (173,600 ETH and 25.5 USDC), and the hack was discovered only a week after it was committed.

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Attackers gained access to the nodes of the Ronin sidechain, on which only 9 validators worked, using a phishing attack on one of the company’s employees. 4 out of 9 nodes were managed by Sky Mavis, the developer of Axie Infinity, and only 5 of them needed signatures to confirm the legitimacy of the transaction. Hackers gained control over another validator running Axie DAO thanks to a vulnerability in its remote control system.

Excessive centralization of the project became fatal for him. This approach is contrary to the basic principles of the crypto world. Usually in blockchains, nodes are controlled by different teams/companies, which keeps decentralization. The developers of Ronin neglected this and the consequences were very sad.

The gaming industry will not disappear, on the contrary, it will continue to develop as new investments come in. This is a good chance to become an early investor. However, before making investment decisions, it is important to determine your own goals and opportunities, as well as conduct your own market research.

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