GameFi is a trend in the crypto sphere that combines gaming, DeFi technologies, and NFTs. One of the main reasons for the popularity of this format is the opportunities for earning and investing that such projects offer. The volume of this market is estimated at $16+ billion for 2024, and is expected to grow to $21.9 billion in 2025.
In this article, we look at the concept of GameFi: what it is, how it originated and how it works, what advantages and disadvantages it offers users, and what GameFi projects exist in the crypto market.
The history of GameFi
The idea of gamifying crypto projects emerged back in 2013. Developers experimented with introducing Bitcoin into Minecraft, and some online casinos accepted cryptocurrency as a deposit.
The first full-fledged blockchain game (CryptoKitties) was created in 2017 on Ethereum. The project focused on buying, selling, and breeding NFT cats. The game attracted the attention of crypto enthusiasts and became the foundation for further development of the industry.
The years 2020–2021 became a turning point for the industry thanks to the active development of NFT and DeFi. Games such as Axie Infinity and The Sandbox quickly gained popularity and demonstrated the potential of gaming tokens as a means of earning income. These projects actively use DeFi tools, effectively combining gameplay with financial operations, staking, and farming.
Initially, many cryptocurrency games were launched on the Ethereum network: developers appreciated its high transaction speed, low fees, and the ability to use smart contracts. However, the popularity of this blockchain quickly led to network congestion and reduced performance. Currently, many new projects are being launched on networks such as Cardano, Polygon, Polkadot, Solana, and Binance Smart Chain.
GameFi project categories
There are several types of cryptocurrency games:
- Play2Earn — “play to earn.” In such GameFi projects, cryptocurrency or NFTs are rewards for participating in the game — leveling up characters, completing levels, developing territories, obtaining items, winning tournaments, etc. “Play to Earn” includes both completely free games and projects that require an initial investment.
- Free2Play — “play for free.” These are Play2Earn games that do not require an initial investment. Any user can play them: to start earning, you don’t need to buy in-game tokens or use assets as collateral. Such projects usually offer a lower level of earnings, but are a good option for entering the GameFi sphere.
- Move2Earn — “move to earn.” Projects like GameFi focus not on virtual activities, but on the user’s physical activity in the real world. An example of “Move to Earn” is fitness apps that track the number of steps and offer users rewards for achieving goals.
- Metaverses. These projects are virtual “sandboxes” where users buy and develop plots of land. These can be in the form of real estate, farms, etc. They are the main tokens of metaverse games: their development can generate both in-game and real-world income.
