DeFi has been a hot trend since 2020 – even during the black swan event of COVID-19 and the terrible state of the crypto markets back then – these projects provided an excellent ROI to their investors, and of course, great staking rewards and APY.
DeFi on its own is an attractive financial product. For example, you can obtain staking rewards for 77% thanks to $CAKE if you select the re-stake option. Nonetheless, by combining DeFi with gaming we have obtained an even more attractive product: GameFi.
GameFi is a hot trend on its own, and personally I’d love it if GameFi options existed. It’d be a great way to hedge against risk in the market or enjoy additional exposure, so I’m just waiting for platforms like Bitlevex to include it. However, let’s come back to the topic and talk about how GameFi is changing gaming and finance as we know it.
What is GameFi and why is it important?
GameFi allows you to earn money by participating in the internal economy of games. For example, you can earn money by taking part in battles, farming your plot of virtual land, buying/selling NFTs, lending the governance token to other users, etc. How can know about decentralized finance
As you can see, it makes it possible to earn money with gaming even if you are not a popular gamer. What’s even more interesting, there are people who make a living thanks to these GameFi projects. You won’t make $10,000 each month, but for a lot of people, the $500-$1,000 you can make per month is more than enough to live a comfortable life.
It is important because it brings another way for people to get involved with cryptocurrencies. In this case, it’s a fun and profitable way to start exploring the world of cryptocurrencies and blockchain technology. It’s a sector on its own, and hence, it will only become more relevant with the passing of time.
What’s even more impressive is that there are some projects working on integrating GameFi with Web3, to bring a truly decentralized experience. The coming years will be very important for these key sectors of the crypto world.
What are some examples of successful GameFi projects?
We have seen lots of GameFi projects to appear in the last months, but only a few have managed to stay, and the most successful example is Axie Infinity. Unlike games like PvU, Cryptomines, amongst others, it has remained as the most solid project in the industry.
Even though the price of its governance token has been declining, and hence affecting the profit potential, it has thousands of active users who support the internal economy of the game. What’s even more important, it has done well through the recent bear market action, because most of its players have remained active and we have not seen a leakage of users selling their Axies (NFTs).
How to start earning money with GameFi?
You can start earning money with GameFi by joining a project like Axie Infinity. This way, you can build your team of Axies and start battling, so you can accumulate $SLP, which you can later cash out and convert it to BTC, USDT or BUSD on your preferred exchange such as Binance or KuCoin.
However, before you join a GameFi game, you need to make sure that it’s solid, professional and trustworthy. The best way to determine it is by analyzing its history, the team behind it, who’s funding it, the number of active players, the tokenomics, and if there are any wallets holding an important percentage of the governance tokens.
If everything looks good, then you can invest a percentage of your portfolio to start playing the game. Remember that every project has a risk factor, but we will talk about this in the next section.
Is it risky to invest in GameFi projects?
Any type of investment is subject to a degree of risk, and when it comes to GameFi projects, it tends to be a bit higher. There are many projects that have rug-pulled their investors, and that includes PvU and Cryptomines. For example, the project Cryptomine had a governance token known as $ETERNAL and it reached a peak price of $780… nowadays it’s worth $1.29 USD…
The same happened with PvU and so many other GameFi projects. Hence, it’s more important than in other crypto sectors to do proper research before investing. This will prevent you from losing a lot of money in the long run, and instead, use GameFi to create a new revenue stream that will grow your portfolio.
If you have more questions about GameFi, then leave them in the comments. We are ready to answer your doubts, so you can get started in this world of gaming and DeFi.
