Cointelegraph Consulting: Exploring the DeFi components in GameFi
In 2018, the two main ways video game players can earn a living were through e-sports and live streaming — or perhaps a successful YouTube channel. But, thanks to the rise of blockchain technology, the financial aspect has never been more interwoven with the gaming industry. While most users are acquainted with one or two facets of financialization in gaming such as earning and cashing out rewards from completing game quests a la Axie Infinity, there are several other methods exist that have yet to be explored by most users in the cryptocurrency market’s flourishing new vertical called GameFi.
CryptoKitties in 2017 is the first known game to use blockchain technology, introduce nonfungible tokens (NFTs) and enable players to have a verifiable claim on their virtual assets. Then, in 2019, the introduction of an in-game currency called Smooth Love Potion (SLP) boosted Axie Infinity’s popularity and paved the way for other decentralized finance (DeFi) components to penetrate blockchain gaming. Such parallels that GameFi has with DeFi include staking, liquidity mining, NFT trading and NFT fractionalization.
Last year, the gaming subsector of the cryptocurrency market exploded which came on the heels of the NFT market boom. It even outperformed Bitcoin (BTC) and the DeFi sector back in December. While the uptrend has fizzled out in recent months, popular games like Axie Infinity, DeFi Kingdoms, Pegaxy, MOBOX and Bomb Crypto continue to rake millions per day in transaction volume.
Much of the excitement around gaming in 2021 also stems from an increase in venture capital interest. For instance, Solana Ventures and Lightspeed Venture Partners launched a $100 million GameFi ecosystem fund in November 2021. A month later, BNB Chain,
Read more on cointelegraph.com
