GameFi is an emerging concept that is shaping the way people identify and enjoy video games. The rapid expansion of the blockchain industry has ushered in a new era of immersive gaming possibilities for ardent gamers.
This guide explores the world of GameFi, which combines gaming and blockchain technology in innovative ways. Additionally, this guide will highlight some of the leading GameFi tokens.
GameFi Explained
GameFi, which stands for Game Finance, is a growing component of decentralized finance (DeFi), combining gaming and blockchain technology. GameFi involves a transformation of video gaming to enable game players to earn real-world rewards for their time and efforts.
Unlike traditional video games, where in-game content is retained, GameFi uses blockchain to give players full ownership. GameFi’s fame skyrocketed due to its “play-to-earn” (P2E) strategy.
GameFi Tokens
GameFi tokens, often called gaming tokens, are distinct digital assets to the GameFi universe. They are useful for trading, storing value, and serving other functions within the GameFi ecosystem.
Furthermore, GameFi tokens serve several functions in the blockchain gaming space. Some of those functions are discussed below.
Utility
Utility tokens in GameFi are unique to each gaming platform and can be used to buy in-game items, improve characters, and unlock premium features. These tokens also improve gameplay and ease transactions in the virtual world.
GameFi Governance And Decision-Making
Furthermore, the tokens enable players to vote on important issues in the gaming community. Token holders can propose and vote on game-related decisions using decentralized governance models. It ensures that the platform’s future and initiatives follow a democratic process.
Tradeable Assets
GameFi tokens can be bought and sold on various cryptocurrency exchanges. Thus, players can convert their in-game earnings into other crypto assets or fiat currencies. This gives the virtual items they earned playing the game an actual value.
Staking And Yield Farming
GameFi tokens can also be used for staking or yield farming protocols, which generate passive income for users. By encrypting their funds in smart contracts, players help secure and stabilize the GameFi network while earning extra tokens as a reward.
Top 5 Best GameFi Tokens
With an overall market valuation of $9.5 billion, GameFi tokens are rapidly gaining traction among gaming enthusiasts in the crypto market. Below are the top 5 in the DeFi gaming market at the time of writing.
Axie Infinity (AXS)
Axie is a unique blockchain game that allows players to collect, create new Axies, and sell them. For the game, they utilize non-fungible tokens (NFTs). In addition to the game, the platform also boasts a governance asset called AXS. The token is similar to a digital coin built on ERC-20.
Moreover, AXS holders can use it to purchase Axies, create new Axies, and influence how the game is run.
Decentraland (MANA)
This token resembles a sizeable 3D game where people can perform various tasks. One notable feature of Decentraland is that a single entity does not control it; instead, the people who use it. MANA is the utility token in the Decentraland gaming ecosystem. It can be used to buy and sell virtual lands and obtain items and services in the virtual world.
Internet Computer (ICP)
The Internet Computer is a specialized Internet system that aids in the development of fast, secure, and custom computer programs and services. It utilizes the cryptography technology.
Rather than traditional web hosting, this system allows programs to run on a global network of servers. Its governance token (ICP) helps run the network and rewards those who assist and pay for transactions.
Immutable X (IMX)
This token is a specific technology for NFTs and games. It provides an additional layer of security on Ethereum. One of its valuable features is that it allows you to create and trade NFTs without paying any gas fees, a massive benefit in the world of games and NFTs.
The IMX token is also built on Ethereum’s ERC-20. This token is also used for paying transaction charges on Immutable’s global order book.
The Sandbox (SAND)
The Sandbox is a game where players can purchase virtual plots of land and create fun things to share with others. People in The Sandbox use a digital currency known as SAND to conduct transactions.
Like IMX, its governance token (SAND) is also built on ERC-20. SAND tokens have numerous applications in The Sandbox community.
Holders can use them for trading, staking, and voting to influence in-game decisions and buy and sell virtual land and items. It is worth noting that all the GameFi tokens above are available on some of the leading crypto exchanges like Binance, OKX, and KuCoin.