GameFi, which was first introduced by the creator of Yearn.finance (YFI) Andre Conje, refers to DeFi protocols that incorporate game-like features. However, the term has since expanded to include the financial aspects of blockchain-based games, as they are intrinsically linked to real-world economies.
Essentially, GameFi allows players to earn cryptocurrency by participating in in-game activities like battles, quests, and crafting. Through blockchain technology, GameFi enables players to have genuine ownership of their in-game assets, which they can purchase, sell, and trade similarly to real-world assets.
Nevertheless, according to recent reports from the industry, the GameFi sector is experiencing a gradual decrease in growth and acceptance. A report from Messari Crypto, published in February 2023, stated that the number of active GameFi users has consistently dropped by 34% since October 2022, with monthly signups decreasing on a month-to-month basis.
These changes have caused concern among some experts and stakeholders regarding whether GameFi can achieve its potential to encourage widespread adoption of cryptocurrency, as previously thought. However, there is still optimism that GameFi can recover as it adapts and utilizes traditional gaming components to tackle some of the significant challenges it is currently experiencing.
Emphasis on Gameplay
One of the main hurdles to the widespread adoption of GameFi is the necessity of placing more emphasis on gameplay. In order to achieve mass adoption, developers of GameFi should prioritize creating a project that not only provides practical value and usefulness for in-game assets but also continuously keeps players engaged. The creation of a sustainable blockchain entails constructing a project that has the ability to retain a steady player base.
Accessibility Also Matters
The lack of accessibility for mainstream users is arguably the most significant hurdle to the widespread adoption of GameFi. This is primarily due to various factors, including the complexity associated with cryptocurrencies, such as the use of wallet addresses and private keys.
For individuals new to cryptocurrency, the notion of wallet addresses and private keys can be complicated and intimidating. Wallet addresses are lengthy strings of alphanumeric characters that are distinct for each user and used for sending and receiving cryptocurrency.
The use of public keys as unique addresses can make them challenging for people to comprehend, increasing the chances of errors. Consequently, access to GameFi has been restricted to individuals with prior knowledge and experience in the crypto realm rather than the general public.
To address the complexity of wallet addresses, a potential solution is to introduce a universal digital identifier, such as a digital identity, that can function as both a wallet address and a username. In traditional gaming, players commonly utilize screen names or usernames to establish their identity within a gaming environment.
In a similar manner, a universal identifier could function as a gamer’s digital identity in GameFi. This would enable gamers to use it as their public persona and simplify the process of claiming rewards without needing to use lengthy and complicated strings of alphanumeric characters. By implementing this approach, GameFi could become accessible to mainstream users who are unfamiliar with the intricacies of cryptocurrency.
Another advantage of implementing a universal identifier in GameFi is the ability to establish monetized reputation systems within gaming communities that encourage positive behavior. Reputation systems can incentivize players to make positive contributions, such as assisting new players, contributing to game development, and participating in governance, thus promoting a positive gaming culture.
Moreover, this universal identifier can allow for cross-game interoperability, enabling gamers to effortlessly use their digital identity across multiple games and platforms. This feature can create a more interconnected and dynamic gaming ecosystem. This will increase engagement and adoption of GameFi, incentivizing players to stay active users across numerous ecosystems.