gamefi vs defi

While the concept of GameFi is fairly new in the world of the Internet, its use cases can be traced back to many older games. Classic arcade gaming ecosystems that were built around in-game tokens, all shared GameFi DNA. On the other hand, Decentralized Finance (DeFi) is no stranger to us either. Getting inspired by peer-to-peer finance-platforms, such as PayPal, DeFi offers a much more sustainable way for money trading.  In this article, we’ll be doing a GameFi vs DeFi battle, to see which platform is more suitable for you.

Many may wonder what separates GameFi from DeFi, after all, one is a formation of the other. GameFi world took off slightly later than the introduction of DeFi. Although CrytoKitties was the first ever known GameFi project launched in 2017, the popularity of this term can surely be attributed to Axie Infinity (Coincu News). 

Without getting deeper into the technical jargon of words, how can we predict whether GameFi or DeFi is the future? Certainly, both markets are not mutually exclusive. One could, however, cannibalize the revenue of the other. In this article, we will compare both genres of the blockchain world. Our aim is to offer deep insights into both worlds so you can decide for yourself where the future lies. So without further ado, let’s kick off this journey. 

What’s DeFi?

Since DeFi entered the world of crypto earlier than GameFi, it makes sense to define it first. We would also like to acknowledge that DeFi gained popularity for all the right reasons. Money markets have always been cryptic or rather obscure for most of us laymen. Having an information asymmetry in the financial markets is what allowed corporate giants to leverage consumer money. While you depositing large sums of money in your bank account may not yield many returns, the same money has been working well for your banks. Very quickly you will realize the importance of mentioning this critical fact. It highlights the significance of DeFi, not just for crypto enthusiasts but for all consumers. 

DeFi Graphic
DeFi Graphic – Source:

The introduction of DeFi challenges the core business model of centralized banks and financial institutions. More so, it has the potential to threaten their core existence. By making use of smart contracts, DeFi transactions assure both parties are playing by the rules. There are no middlemen taking advantage of information asymmetry. Additionally, these smart contracts lower the costs of borrowing and lending for both parties. Based on the peer-to-peer lending concept, you can borrow or lend your (digital) assets using consensual interest rates. The rates in DeFi world are set using free market forces; based on demand and supply rather than the central bank. 

DeFi Examples

  • Pancake Swap 

Unless you have been living under the rock or have zero interest in the crypto world, it is surely hard to miss Pancake Swap. Firstly, thanks to its highly awesome name. And secondly, due to its massive popularity in the blockchain industry. Although introduced just over a year ago, Pancake Swap quickly became one of the favorite DeFi platforms out there. Its fame can be attributed to its efficiency as an automated crypto market marker. Users on PancakeSwap had staked more than five billion on this decentralized exchange

Uniswap logo – Source: InsideBitcoins

While we are on the topic of “swaps”, it is worth mentioning another popular DeFi platform, Uniswap. Using the Uniswap protocol, users can swap, earn and build digital assets on one of the leading decentralized crypto trading platforms. In a short span of time, Uniswap DEX has managed to trade a volume of over $1.1T USD. 

All signs indicate a more hopeful and fruitful future in the financial world! 

  • Colony Lab

Outside the world of ‘swaps’, Colony Lab also enjoys a top spot in the list of best DeFi platforms. It is, in fact, ranked as the best DeFi project on Avalanche Blockchain by many crypto experts. 

Moving to GameFi 

If you are wondering what the byproduct of mixing gaming with decentralized finance, with a hint of NFTs will result in, the answer is GameFi. Simply put; Gaming + DeFi + NFTs = GameFi. Now you may be left wondering why on the earth are we comparing the two if one is the byproduct of the other. It is not as simple as that. Or maybe it is. Let’s find out. 

While DeFi is more friendly towards those who are somewhat active in the world of finance, or at least, have the basics of trading covered. GameFi on the other hand uses a beautiful user interface that masks the mechanics of DeFi. in a nutshell, most GameFi games are DeFi on the backend, where the frontend is geared towards game-lovers. Axie Infinity is a great example of GameFi. It is an NFT-based game that allows users to trade their in-game assets with each other, and play to earn money. 

Equally comparable to DeFi in terms of importance, GameFi offers immense value to consumers. Instead of suffering from the boring world of finance, GameFi allows users to understand the complexities of financial systems using an immersive virtual world. GameFi platforms mostly have sophisticated tokenomics models embedded. This further enables users to earn great sums of money while enjoying amazing gameplay. 

GameFi Examples

  • Axie Infinity 

Axie Infinity
Axie Infinity Banner. Source: Axie Substack

We are aware of the fact that Axie Infinity has been mentioned abundantly on our platform. Rightfully so. Many think of Axie Infinity as a Pokemon “inspired” gameplay, but it is a lot more than that. Indeed the game offers users to collect, trade and battle their fantasy creatures called Axies. However, unlike Pokemon, Axie Infinity has over 1 million daily active users and surpassed the $4 billion USD mark in total sales. 

  • CryptoBlades

CryptoBlades is another popular (NFT) GameFi project, built on the Binance Smart Chain. Players in CryptoBlades are rewarded for participating in raids and battling with enemies. The reward, as common with all GameFi projects, is paid out in the native token of the game itself. Players can also swap their tokens or other digital assets (NFTs) collected in the game on DeFi exchanges such as ApeSwap. 

GameFi vs DeFi Round 1: “Popularity”

In order to compare the two, let’s first examine them individually in terms of their popularity. If you follow the crypto world closely, you may come across GameFi updates in almost every news publisher. Every other day, there are big discussions surrounding new and upcoming GameFi or NFT projects. 

According to an article published by Bloomberg, our suspicions of GameFi leading DeFi in terms of popularity has been deemed true. GameFi popularity accounts for 52% of all DAPP user activity compared to 34.7% of DeFi. 

Round winner: GameFi

GameFi vs DeFi Round 2: “Significance”

GameFi Graphic
GameFi Graphic – Source: PixelPlex

The battle between the two in terms of significance is measured by their trade volume and transaction. As money still runs the world, it surely is important to compare the two based on this metric. Now you may say it is not fair to compare trade volume or transactions between the two, since one by definition is supposed to lead the other. That may be true. However, it does not mean that GameFi industry has not created vast wealth. 

According to the same Bloomberg article highlighted above, the total value of all best 5 DeFi platforms reaches $130 billion USD. Whereas, the total value locked of top 5 GameFi projects only add up to $14 billion USD. Although the difference between the two is quite drastic, it was expected. 

The winner of this round by a huge margin is: DeFi

GameFi vs DeFi Round 3: “Scalability”

As both GameFi and DeFi are based on the premise of innovation and rely purely upon digital systems, scalability will be measured by their underlying tech. Let’s assume a DeFi platform suddenly gains massive momentum and reaches a total active user count of 100 million. Can the platform sustain such high growth of users? More importantly, can DeFi platforms handle such a high frequency of trades? 

The short answer is no. It is a common fact in the blockchain world that the scalability of decentralized transactions is a huge obstacle. At least for the foreseeable future. It is also true that the scalability of most GameFi platforms also depends on the faster processing power of blockchain networks. However, currently, GameFi platforms can handle a larger number of active users and transactions than most DeFi platforms. Only by a small margin though. 

To conclude the final round, it can be safer to say that GameFi comes out as a winner by a small margin. 

Final Decision – GameFi vs DeFI 

Once again, it is worth noting that the difference between GameFi vs DeFi is very thin. One cannot exist without the other. It is much more beneficial for all, not just crypto lovers if GameFi and DeFi can continue to build on top of each other. Resulting in more, and faster, innovation for the entire blockchain ecosystem. 


Any investment/financial opinions expressed by Play to Earn Diary are not recommendations. Our content is for educational purposes only. If you plan to invest in any game or cryptocurrency then please do your own research and only spend what you can afford to lose.

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