Early GameFi games used the bitcoin blockchain, but transaction costs and lack of speed led the industry to move to the smart-contact blockchain Ethereum.
Crypto-game developers actively used Ethereum, which is still quite popular, but it has a limited block size, which causes performance problems. This flaw was noticed when the incredible popularity of CryptoKitties heavily loaded the Ethereum network in late 2017, causing prices to skyrocket.
Because of Ethereum’s block size limitations, transactions requiring quick confirmation encourage miners to add them before others with higher fees. As demand exceeds the available size, commissions increase dramatically, leading to the crowding out of other users.
GameFi Expansion.
Of course, a game that requires high fees for in-game transactions would have a hard time gaining a significant user base. Faced with this problem, some crypto-game developers have switched from Ethereum’s base tier to faster networks. These networks include Solana, Polkadot, Polygon, Wax, and BSC.
GameFi projects have many levels to complete. Players earn by improving characters, renting out land and buildings, or fighting in tournaments.
All data is stored in a decentralized public blockchain, which keeps a record of each user’s assets. This means that it is the players who own all of the assets, not the developers.
Any game asset purchased is permanently owned by the user, even if the server is down or experiencing technical difficulties. This makes cryptogames a source of real income and a pleasant pastime. For some people, these games have replaced a full-time job.
Other benefits of GameFi
The industry has other benefits as well. For example, steaming, mining crypto-farming liquidity and other DeFi-concepts that are gradually entering GameFi projects. All of this creates even more ways for investors to generate passive income.
Right now, players can already contribute their game assets to Staking and earn interest and other rewards from them, which can be used to unlock new levels or buy additional in-game items. At the same time, players can take out loans to secure in-game assets.
Unlike the traditional centralized development process, GameFi projects involve users in the decision-making process. Some games allow players to determine the direction of future updates by giving voting rights to GameFi DAO members. A Decentralized Autonomous Organization (DAO) is an open-source blockchain registry with a clear set of rules.
To become a member of a GameFi DAO, you need project management tokens. As a rule, the “weight” of a vote is directly proportional to the number of tokens in the user’s savings.