What Is GameFi? Play-to-Earn Is Reshaping the Gaming Economy
GameFi is a combination of Game and Finance, referring to the deep integration of blockchain technology, decentralized finance (DeFi), and video games. Its core is the Play-to-Earn (P2E) model: players earn cryptocurrencies or NFT assets through in-game tasks, battles, or contributions to the ecosystem, and can trade or sell them to convert into real profits.
The core difference from traditional games is “true ownership”:
- Traditional games: Player assets are stored on centralized servers, vendors can modify or shut down services, and assets cannot be used across games;
- GameFi: Game assets exist on the blockchain in the form of NFTs (non-fungible tokens), giving players full control, allowing for free trading and even cross-game reuse.
Pioneering Project Lays the Industry Foundation
Axie Infinity
- Type: Monster Breeding Battle Game (similar to Pokémon)
- Highlights: Players collect and breed NFT creatures “Axies” to earn SLP tokens through battles; using the Ethereum sidechain Ronin to reduce transaction costs.
- Historical Status: A phenomenal project in 2021, players in places like the Philippines used to earn over the local minimum wage per month, promoting the rise of the “gold farming guild” ecosystem.
The Sandbox
- Type: Decentralized Virtual World
- Highlights: Players buy land with SAND tokens, create games and NFT assets using VoxEdit and Game Maker tools, and profit, forming a creator economy.
Decentraland
- Type: Blockchain Virtual Reality Platform
- Highlights: The MANA token drives land transactions and governance, allowing users to vote on platform rules through DAO, creating a community-governed metaverse.
Vertical Innovators Expand Gameplay Boundaries
Gods Unchained
- Type: Card Battle Game
- Highlights: All cards are NFTs, players truly own the cards and can trade them, combining strategic gameplay with on-chain asset value.
STEPN
- Type: Move-to-Earn
- Highlights: Users purchase NFT running shoes and earn tokens through real-life walking/running, driving the “sports financialization” beyond the niche.
High-Potential New Forces in 2025
Illuvium
- Type: Open World RPG + Auto Battle
- Highlights: Console-level graphics, capture NFT creatures “Illuvials”, token ILV for staking and governance, mobile version and cooperative copy to be launched in 2025.
Big Time
- Type: MMORPG
- Highlights: Dynamic token distribution mechanism that adjusts rewards based on activity; supports players to create cosmetic items and share profits, with esports events starting in 2025.
Challenges of GameFi: Death Spiral and Experience Shortcomings
Despite the innovation in economic models, the industry still faces significant issues:
- Sustainability dilemma: Over 60% of players churn within 30 days, primarily due to weak gameplay and an imbalanced economic model;
- Death Spiral Risk: Excessive token issuance leads to devaluation → Players sell off → Token price crashes (e.g., Hamster Kombat users plummeted by 86%);
- Security and experience flaws: hackers stealing assets (such as Axie’s loss of $620 million), the complexity of setting up crypto wallets discourages new users.
Future Trends: High-Quality Games and Integrated Innovation
In 2025, GameFi daily active users will reach 5.8 million, showing a new direction:
- Playability first: Projects like Illuvium break the bias that “blockchain games are not fun” with console-quality.
- Deep integration of DeFi: Financial tools such as staking and lending embedded in the game economy;
- DAO Governance Popularization: Players vote to determine updates to game rules and fund allocation;
- Cross-chain interoperability: Assets can flow freely between multiple chains, lowering the participation threshold.
The true gift of blockchain is not to turn games into mines, but to give every virtual creation an inalienable value. As games evolve from mere entertainment into productive means of digital life, GameFi is redefining our contract with the virtual world — entertainment as labor, assets as sovereignty, and players as shareholders. This experiment is far from being finalized, but the potential for economic democratization it unleashes has opened a new door for 3 billion gamers.
