Profits of over $800 million a month. How to make money in the GameFi industry

Blockchain-based gaming projects are actively developing and attracting new players, and the decentralized games market gained more popularity in August
Profits of over $800 million a month. How to make money in the GameFi industry

The GameFi industry emerged back in 2013, when developers began introducing cryptocurrency support in games. For the last seven years, the sphere has been slowly developing, with new projects appearing, but in 2021, the popularity of decentralized games increased manifold, and in August, there was a real boom in the GameFi sphere. For example, according to analytical service DappRadar, the developers of the most popular blockchain game Axie Infinity earned more than $800 million last month.

Axie Infinity

Axie Infinity is a blockchain game where players fight each other using fantastic creatures, each of which is represented as an NFT token. Players can buy, create and trade new creatures. Players can earn cryptocurrency by creating and selling new creatures, winning battles with other players, and betting on the outcome of battles. The project was developed by Sky Mavis on the Ethereum blockchain.

Axie Infinity (AXS) token gained 156% in August, reaching an all-time high of $82.4. The cryptocurrency’s capitalization exceeded $4.2 billion, according to CoinGecko. Since its launch in November 2020, the value of the token has risen 58,757%.

Axie Infinity’s active audience exceeded 1 million users in early August. Amid the popularity of the blockchain game, its internal token began trading on the largest U.S. cryptocurrency exchange, Coinbase, on August 13. The Smooth Love Potion (SLP) internal blockchain game token, which players receive as a reward for battles, has even begun to be accepted by sellers as payment in the Philippines. However, local regulators have taken an interest in such vendors. The Department of Finance of the Philippines has proposed to tax SLP token transactions in the country.

Alien Worlds

Alien Worlds is a blockchain game that involves mining minerals and then selling them for cryptocurrency. The project is created on three blockchains at once: Binance Smart Chain, Ethereum and WAX. The game’s internal token, TLM, went up 60 percent in August. Its price reached $0.40.

The number of active Alien Worlds players in August exceeded 720,000. Each item in the game is represented in the form of NFT tokens. In-game item sales last month totaled $104 million. In August, the most expensive NFT token in Alien Worlds was sold for $40,000.

Splinterlands

Splinterlands is a card game developed on the Hive blockchain in 2018. Players battle each other using various creatures and items that are represented as NFT tokens.

he project raised $3.6 million in funding in late July, at which time the Splinterlands token was launched, which rose 494% in the first days of trading and renewed its high at $1. In August, the altcoin price dropped to $0.37 (down 65%).

During the month, the number of active Splinterlands players approached 200,000. In August, Splinterlands’ domestic NFT token sales exceeded $63 million.

Why GameFi is growing in popularity

Growth in popularity of GameFi industry is a cumulative result of the rapid development of two areas at once: decentralized finance (DeFi) and gaming, says co-founder of cryptocurrency exchange EXMO Ivan Petukhovsky. According to him, the big prospect of integration of the crypto market with the gaming sector was talked about 3-4 years ago.

In the coming months and years, rare projects will “shoot out” in the GameFi industry, regardless of the stage of growth or decline of the crypto market itself, says Nikita Zuborev, senior analyst at Bestchange.ru. In his opinion, the bitcoin trend will always strengthen or weaken the success of GameFi projects, but there is not a direct correlation between trends in the whole market and the GameFi segment.

The price of most GameFi tokens is now rising due to their NFT component, the analyst noted. According to him, investors are trying to make money from the resale of game characters and various digital items, rather than from the game mechanics themselves. That’s driving up the native token value of most decentralized games, Zuborev added.

What projects to look out for

Leading analyst of 8848 Invest Victor Pershikov named projects of the gaming sector, which, in his opinion, are undervalued and have growth prospects. The analyst recommended to pay attention to FaraLand and IG Gold. According to Pershikov, these two projects are currently behind the market, but have the game mechanics of already “shot” games.

When choosing a GameFi project to invest in, it is worth considering the marketing and technological component: how actively the project is promoted and what benefits the project’s token provides to its participants will determine the growth of the game’s users, and as a consequence, the capitalization of the token, Pershikov warned.

How to start playing blockchain games

1. To sign up for a game developed on blockchain, you will need a cryptocurrency wallet;
2. Most blockchain games work on a Pay-to-Earn basis. This means that a payment must be made to start the game. For example, in Axie Infinity, a newcomer needs to purchase a fantasy creature to start battles;

3. Before starting the game, it is necessary to study the project in detail. In particular, it is worth paying attention to which crypto exchanges its tokens are traded on;
4. Before making payments, it is worth to study reviews about the project and find out if there is an opportunity to withdraw your money from the game;

5. Fraudulent projects can pass themselves off as blockchain games and work on the principle of pyramid scheme. Usually, these projects do not have their own tokens to be traded on exchanges.

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