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There is a generalized detraction from financial responsibilities and awareness among modern society members, which is especially evident among the more digitized, younger generation that is seeking an escape from reality into the online world. This has led to the emergence of a new trend. By merging the necessity to generate financial means with one of the most lauded activities of the zoomers, games are being integrated into the decentralized finance (DeFi) space. The allure is that DeFi is both dynamic and technologically advanced enough to provide games with an entirely new dimension of player engagement.
The emergence of GameFi
What has emerged from the combination of gaming and DeFi is GameFi – the gamification of financial mechanisms that make the process of earning profits an engrossing and fun experience. By leveraging the interests of gamers in various genres, the play-to-earn mechanism suits the tastes of players while offering them a host of attractive activities and the value to match.
The concept of GameFi was first emphasized back in September of 2020 before a broader audience of net users by Andre Cronje, the founder of the Yearn.Finance DeFi platform. His tweet was about the gamification of monetary policies in the decentralized environment and the move from TradeFi as the sole instrument for maintaining the space.
Since then, a host of new developments has shaken the industry, with the rise of non-fungible tokens heralding an era for the transition of gaming into the decentralized environment. This trend has since seen not only the tethering of digital assets to unique, real-world assets bearing value, but also the explosive growth of metaverses.
Economic value for players
Speaking of metaverses, these vast, decentralized environments provide endless opportunities for developers to launch entire universes and worlds filled with creatures, events, objects, and even internal economies to attract droves of players and keep them glued to the interface.
These metaverses offer players endless possibilities of generating earnings on in-game activities and engaging them via a plethora of gaming boons. The catches range from thrilling action and mesmerizing graphics to original meme-based fun that hides ample instruments for making real money.
With a cutesy little dinosaur from Mario playing as its mascot, the YooShi metaverse is just one of countless worlds gracing the decentralized industry. Hiding behind its memish simplicity and cuddly collectible card dinosaurs, the game introducers players to complicated financial mechanisms that suddenly seem overly simplistic when wrapped up in the form of a game.
It is all about perception when it comes to finance, rooting out boredom and replacing it with gaming. This is exactly what YooShi does when it nudges players to hunt down collections of NFTs to be used in DeFi yield farming, thus enhancing these NFT collections’ value.
Value is the underlying concept of GameFi, where “play” turns into “work” in a seamless fashion, rewarding players with digital assets bearing real value for themselves or someone else in the marketplace. Stellar examples of such value can be found in the collectible card NFT market, which ranges from FIFA football player cards in CryptoFifa, and NBA star collectible cards in NBA Top Shots, to car collectibles in Formula 1, each worth hundreds of thousands of dollars at times.
The reason for such success is the popularity of these sports games and their immense fan base. Add to this the opportunity to monetize gamer loyalty, and you get a new generation of NBA, FIFA, and Formula 1 games with virtual experiences and their own economies. CryptoFifa, for example, combined NFT, DeFi features, and traditional football gameplay allowing users to trade NFT cards obtained in the game and earn income while playing.
When NFTs turn into coveted items that can be used to grease the gears of DeFi mechanisms like yield farming, they gain intrinsic value and start attracting more than just the attention of avid collectors and fans. The same process of gamification can be replicated in any of the other sectors of the booming DeFi market. Asset trading on exchanges, which by default requires a broad knowledge base, can suddenly turn into a game involving real money, with concepts and mechanics explained via fun tutorials in stark contrast to traditional volumes of explanatory texts. Furthermore, the rapid spread of metaverses and their engulfment of real-world companies, like luxury brands, may soon lead to the emergence of an entire parallel world that becomes a real counterpart in digital form.
With metaverses blurring the line between games and finance, and NFTs like NBA Top Shots totaling thousands of dollars in value, it seems that in-game economics are starting to not only mimic but even surpass real-world economics. In time GameFi and DeFi may become one, with traders buying and selling decentralized financial assets in virtual shops.
Christopher Owen is a passionate Bitcoin fan from CA. He developed his own tools to track and predict changes in Bitcoin price after the fall of Mt. Gox. He is trading some stocks and digital currencies for experimental purposes and hunts the most interesting cutting-edge technologies’ use cases in investing and finance.