GameFi and the future of work
GameFi will create a new form of digital financial income for people all over the world.
There are dozens of posts dedicated to how the Simpson predict the future but none to Gary Larson. In this 1990 comic, he paints the wishful picture of a future where a kid can grow up to be a professional gamer.
While this is a joke, he was right. Starting in the early 2000 televised eSports started to happen and after 2010 it was possible that with enough time spent playing Fortnight a kid could put themselves through college and then make even more money broadcasting themselves live on twitch. This is not exactly what Gary Larson was pointing to in his comic but it’s in the right direction. The problem is that it’s not easy to do or an option for most people. While the top eSports earner made $7.2MM in 2020 the average mid to high-tier player makes $50,000. If they are good at twitch and tournaments, it’s bumped up to $75,000 per year. These numbers are not bad but it’s going to take someone years of playing to get to this professional level. What if there was a way for the average person, without years of training, to start playing a game and make a living?
Enter Blockchain.
Launched in 2009 Bitcoin introduced the world to blockchain technology and the concept that people can exchange value from a peer-to-peer network without the involvement of any government or bank. The true value of blockchain lies in a system where everyone can trust one another.
Launched in 2015 the Ethereum blockchain (ETH) introduced the concept of smart contracts and decentralized applications (dApps). Much like the Apple app store the platform ETH created allowed new projects to use its blockchain to build upon and create dApps. ETH also set up new governance models through smart contracts which are self-executing digital contracts. They transfer currency or an asset once the underlying code establishes that a predetermined condition has been met. Smart contracts can be used to automate payments, track intellectual property rights, and transfer ownership of materials and equipment.
From this, an explosion of new projects and ideas emerged because Ethereum made starting a project easier. In 2017 a new project called Crypto Kitties emerged. These are collectible cards of cats that could be customized a
nd resold. These were the first Non-Fungible Tokens (NFT’s). While NFT’s have been gaining speed in digital art the gaming industry has also been expanding and adapting the technology.
Making money through games.
What’s getting interesting now is the combination of gaming, blockchain, and NFT’s called GameFi. The current business model of gaming means people are earning money for game publishers rather than earning it for themselves. GameFi changes this completely by returning the incentives and the value to the players
During the start of the pandemic, a group of friends in the Philippines was out of work and unsure of what they would do next. They came across a new blockchain game called Axie Infinity created by Sky Mavis. In this game, players could earn rewards as they played. Axie uses NFT’s to identify digital items in its game that players can collect, buy, or resell. Players also earn a virtual currency, Smooth Love Potion, that they can convert into other cryptocurrencies or fiat.
Their experience is documented in the short documentary Play-To-Earn on YouTube.
This money turned out to be a lifesaver for the community. This film shows the idea of anyone earning a living through a game isn’t a joke, though it is very much in its infancy. NFT sales topped $2 billion in the first quarter of 2021. According to blockchaingamer.biz, $452 million has been invested into NFT games in 2021, up from a total of $71 million in 2020. According to the sales aggregator, CryptoSlam.io Axie Infinity NFT’s are the top-selling NFT project of 2021 raking in $193MM.
More GameFi projects are being released with a similar model to Axie Infinity. One new project is Dreams Quest and they are taking this model one step further. Dreams Quest is a decentralized Play-to-Earn Role Playing Game (RPG) trading card game that uses dynamic NFTs technology. Players experience the game with single-player story quests or join up with their friends in group quests. Players use the collectible card NFT’s for a fast-paced strategy card game. This setup allows players to earn $Dreams tokens in the game by going on quests. They also mint NFT’s and add value to in-game NFT’s by playing in different situations. In the end, players can resell their NFT’s and take their in-game earnings out of the game to the real world.
The Future
The incentives of play-to-earn mean that blockchain-based games could reach multi billion-dollar market capitalization. Gamers of all skill levels from all over the world can start to earn real income from these new blockchain-based dapps as decentralized gaming and non-fungible tokens (NFT) become mainstream. Soon the NFT’s in the individual games will be able to transfer cross-chain to other games adding even more value to the marketplace and NFT’s. This means gamers will be fully in control of their skins and weapons no matter what game they are playing. The bringing together of blockchain, the financial incentives of crypto, and the fun of gaming will change the future of work. GameFi will create a new form of digital financial income for people all over the world and truly allow people to live the life that Gary Larson 90’s comic and show their parents that playing games really does pay off in the end.