GameFi (which is heavily interwoven and NFTs) is another decentralized component of DeFi that recently rose in prominence. The term “GameFi” was first used in a tweet made by Andrew Cronje, the founder of Yearn.Finance, back in September 2020, and has since formed an ecosystem of its own.

GameFi works hand-in-hand with NFTs. Many refer to GameFi as an intermediary between DeFi (the broader gaming industry) and blockchain-based gaming entities.

Although developers of well-known gaming applications are still wary about incorporating blockchain technology into their games, new gaming projects using the latest technology are underway.

OKEx operates both as an exchange and DeFi Hub. The situation is quite different. OKEx integrates all the elements of an exchange platform dynamically without losing the spirit of the entire DeFi universe, which also includes NFT markets and GameFi.

While OKEx’s GameFi feature is still a work in progress, it currently offers access to the top 5 NFT-backed gaming protocols, including Celestial Metaverse, , Crypto Gladiator, Land of Strie, and Farm Hero.

OKEx GameFi feature further allows users to access statistics for various utility tokens of select blockchain games; their real-time asset volume, number of players, the host chain, and lastly, the asset’s current price and percentage trade changes.

GameFi could disrupt the gaming industry

Lennix Lei (director of OKEx) spoke to DailyCoin about GameFi’s potential disruption of the gaming market. He believes GameFi will become an integral part of the DeFi market soon and have a business model capable of disrupting current gaming industries.

Lai stressed that GameFi uses a completely different infrastructure, which is built using blockchain technology. Compared to this, the majority of traditional gaming apps were built with Unity and Java frameworks since the beginning of Android’s operating system in 2008.

Although the main difference between GameFi software and existing gaming software is blockchain application, Lai stated that it offers both a smoother implementation method as well as an easier end-to-end development.

“With GameFi, you make a very simple prototype, and thereafter, you assemble your team. The next step will then be trying to sell your in-game infantry, and other resources, such as in-game tokens, on-chain first, as a form of raising capital to develop your game,”
Lai explained.

In his words, Lai underlines that in the gaming industry “only the biggest capital wins.” In other words, to build a solid game that can be considered “triple-A” (or AAA), the developers must be willing to spend a lot financially, or partner with investors that are willing to bet big on the initiative.

According to Lai it is much easier to raise funds for blockchain-based gaming projects by using the GameFi model. This is due to the various activities that are part of a GameFi roadmap. These include private token sales and public listing on decentralized exchanges. Lai says these activities will guarantee an immediate return on the initial capital requirements.

Another aspect in which GameFi is positioned to disrupt the gaming industry is through what Lai described as an “in-game ecosystem.”

“GameFi is actually building an in-game ecosystem that encourages players to directly contribute to the game by trading with and playing against other players.

GameFi maintains the DeFi Market DAO. Their goal is to keep a fair and trading gaming environment for all gamers. So I would say it is a different way to look at the existing industry, and it could be disruptive,”
Lai explained.

GameFi encourages all players to participate in the development and maintenance of the market by using the same DAO approach as the majority of DeFi apps.

In addition to the above, OKEx’s on-chain protocol has been particularly supportive of GameFi. This is because it provides custom features at a substantially lower cost. Although their offer is good enough to shock the market, Lai said it was still premature to make any definitive conclusions.

Adoption: The risk

Lai cautions them against being incensed into jumping onboard the moving train. He advises that developers not migrate all of their games to GameFi. Lai recommends that developers only incorporate elements from GameFi that will benefit them long-term.

“As a game creator, you shouldn’t try to migrate your existing game to a new platform in its entirety. Traditional players would find this counter-productive. Therefore, it is best to integrate a Blockchain element into your game and make it GameFi, while raising funds. You have to understand what tokenomics actually benefit your gaming ecosystem in the long term,”
Lai expressed his opinion.

Lai stated that the GameFi ecosystem must have an upgrade that encourages gamers to take part and convinces them of its potential benefits.

To The Flipside

• NFTs are in their early stages and there is significant risk. Lai estimates that over 90% of the first attempts to enter this industry are unsuccessful. Investors should be cautious.
• If current game developers attempt to completely move existing game models over to GameFi, they are at greater risk.

Why you should care

GameFi is rapidly gaining popularity in the gaming world and may be the next big thing. GameFi could be integrated into existing games by developers who are already in the game development industry. This will increase both their global acceptance and their profitability.

The full interview can be viewed here

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