Understanding GameFi and Play to Earn: How Emerging Technologies Are Changing Gaming Industry

GameFi and Play to Earn(P2E): How BlockChain has Evolved The Concept of Gaming

6 min readSep 22, 2024

Introduction

We will be looking at the world of GameFi and Play to Earn(P2E): How BlockChain has Evolved The Concept of Gaming. Imagine a world where your gaming skills could pay your rent, fund your education, or even support your family. This isn’t science fiction — it’s the reality that GameFi and Play-to-Earn models are creating right now.

Sounds like a fairy tale, but thanks to the cool developments around GameFi and Play-to-Earn models, it’s turning out to be not quite that far from reality. So, are you ready to explore how GameFi and Play-to-Earn models, powered by innovative blockchain ecosystems like TON and Cosmos, are reshaping the intersection of gaming and finance? Let’s explore how you could be part of it.

What is GameFi?

GameFi is a combination of the two words “game” and “finance.” In essence, it comes to represent that playing video games has ceased to be an activity purely for fun; rather, it serves as one of the channels through which one may try his or her hand at earning some money or rewarded assets with real-world value. Instead of accumulating points or achieving accomplishments in a game, one gets rewarded either with tokens or assets that mean something in real life.

What is Play-to-Earn?

A more specific subset of GameFi, known as play-to-earn, rewards players with cash or valuable items that are a result of playing games. This means that instead of using money to make in-game purchases with absolutely no return, you can have some rewards that are maybe worth something outside the game.

How Does This Work?

Digital Tokens: Most Play-to-Earn games establish a system of digital tokens or, in other words, some sort of virtual coin that players can earn in the game. Moreover, such tokens can be sold or traded to raise real-life revenues.

Virtual Worlds Assets: Features of some games may be owned by players such as land, characters or weapons that can never leave the game world and only their legitimate owner holds them. At times, these assets can be sold or traded for real money outside the game.

Blockchain Technology: The technology ensuring the security and integrity of tracking all digital transactions. This is sort of the image we have with a public ledger that all can see, but no one can alter.

How TON fits In?

TON-The Open Network

What It Is: TON (The Open Network) is a blockchain designed for fast, cost-effective transactions. It offers seamless Play-to-Earn experiences through mini apps, allowing players to earn rewards directly within messaging platforms, thus making gaming more accessible and rewarding.

How It Helps: Fast and inexpensive trading/earning digital tokens are supported by the TON technology that these Play-to-Earn games offer. Better put, players will have a significantly easier time buying, selling or trading their in-game gains.

Examples of Projects Leading the Charge: TON Ecosystem

Hamster Combat: is one of the most prominent web3 games on Telegram, gathering over 150 million active users. By tapping on the screen, players can upgrade their in-game characters and gain Hamster coins. The level of their “Hamster” and the number of coins mined by the users will be the main criteria of the $HMSRT airdrop.

NotCoin: The cryptocurrency is earned in the Telegram chat by clicking repetitively on the animated coin. Players start off gaining one Notcoin per click but are able to upgrade earnings through various in-game enhancements.

How Does the Cosmos Ecosystem Fit In?

What It Is: Cosmos is an “internet of blockchains” that enables intercommunication through interoperability (read more here https://cosmos.network/ ) — similar to how different languages can be translated to facilitate mutual understanding.

How It Helps: Cosmos simplifies the transfer of digital rewards between games across different blockchain networks. This increased ease of asset movement enhances the flexibility and value of in-game items within the Cosmos ecosystem.

Examples of Projects Leading the Charge: Cosmos Ecosystem

Saga

Scaling platform for creating metaverse games and their economies based on the Play-to-Earn model. The SAGA infrastructure lets one build decentralized gaming apps with the ability for interchain operability.

Sei

The Sei Blockchain is designed to support high-speed processing and is ideal for scaling Web3 games with in-game financial transactions. Sei liquidity management system offer GameFi applications the possibility of offering their users a more intensive liquidity system along with a cost-effective exchange process, using the agility and efficiency of the Sei blockchain.

Source Protocol Is a protocol with the ambition to include DeFi within GameFi projects on Cosmos. This bridge connects the gap between gaming and financial services by allowing users to generate interest out of their game earnings. Read more here : https://www.sourceprotocol.io/

Challenges and Criticisms: The Other Side of the Coin

While GameFi offers exciting possibilities, it also faces several challenges:

Economic Sustainability: Critics argue that many P2E models rely on a constant influx of new players to sustain their economies, potentially leading to unsustainable “bubble” scenarios.
Environmental Concerns: Some blockchain networks consume significant energy, raising questions about the ecological impact of widespread GameFi adoption.
Regulatory Uncertainty: As GameFi blurs the lines between gaming and finance, it faces potential regulatory hurdles in various jurisdictions.
Gameplay vs. Earning: There’s an ongoing debate about whether the focus on earning detracts from the fun and creativity traditionally associated with gaming.

Expert Opinions and Industry Statistics

Despite these challenges, many experts remain bullish on GameFi’s potential. According to a report by DappRadar, blockchain gaming activity accounted for almost 50% of all blockchain usage in 2023, with over 1.15 million daily unique active wallets (Source: DappRadar Blockchain Gaming Report 2023).

Yat Siu, co-founder of Animoca Brands, a leading investor in GameFi projects, states: “GameFi is not just a trend, it’s a paradigm shift in how we perceive value creation in virtual worlds. It’s democratizing the gaming industry and creating new economic opportunities for millions of people worldwide.”

A study by Absolute Reports projects the global GameFi market to reach $2.8 billion by 2028, with a compound annual growth rate of 20.4% from 2022 to 2028.

Why This Matters

GameFi and Play-to-Earn systems are gradually revolutionizing the gaming world by incorporating financial technologies. Live blockchains like TON and Cosmos reward players while they enjoy their games and provide them with an opportunity to earn and trade valuable assets. This new path toward possible savings for real-life rewards or item exchange across games opens wide perspectives for gamers. Projects on TON and Cosmos spearhead this revolution and make gaming more rewarding and connected than ever.

Conclusion

GameFi and Play-to-Earn models are revolutionizing the gaming world, as it increasingly combines fun and joy with real-life financial benefits. Using cutting-edge blockchains like TON and Cosmos, players will be able to create, trade, and manage significant in-game valuables across titles. This will make these games more entertaining while opening up new ways of economic participation in virtual worlds. Continuous innovations in projects within such ecosystems through decentralization, especially in regards to interconnections and rewards, will be the future of gaming worldwide.

Thank you for reading!

Explore More

Join our Telegram channel ValidatusHub for real-time discussions and breaking news in the #Web3 space. Follow us on Medium for regular articles and updates!

Note: While we strive to provide the most accurate information, cryptocurrency investments come with inherent risks. Always conduct thorough research before making any investment decisions.