GameFi combines blockchain technology, decentralized finance (DeFi), and video games. It’s all about play-to-earn games on the blockchain that reward players financially for their involvement. Within the GameFi world, cryptocurrencies, NFTs, and blockchain underpin the digital gaming landscape. Players typically accumulate in-game benefits by undertaking challenges, competing against others, and advancing in the game. Moreover, they can move their assets out of the game to engage in trading on crypto platforms and NFT trading sites.

Within GameFi, rewards can take various shapes, including cryptocurrencies or virtual in-game items like lands, characters, weapons, and outfits. Each GameFi endeavor has its unique structure and in-game financial system. Typically, these in-game items are NFTs on the blockchain, allowing for trade on NFT platforms. However, in some instances, these assets must first be transformed into NFTs to enable their trading or sale.

Central to GameFi initiatives is the innovative play-to-earn (P2E) gaming approach. This contrasts starkly with conventional video game models where the pay-to-play setup usually doesn’t provide players the means to capitalize on their in-game assets. In the traditional gaming world, players often can’t realize any monetary gains, and the assets within the game are dominantly owned and governed by the game developers. On the flip side, P2E games grant players full autonomy over their in-game possessions and open doors for potential financial earnings.