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Is Gaming Cryptocurrency a New Driver in the Defi Industry? Learn more about cryptocurrency games, play to win, and how to get crypto by playing.
According to the Investgame report, the gaming industry is experiencing the rise of blockchain-based cryptocurrency games. In the first half of 2021, crypto gaming companies concluded 24 deals (double the full year 2020) worth over $ 476 million.
Overall, the video game industry is experiencing a period of impressive growth, driven by blockages caused by a pandemic, which has forced people to find new ways to spend time indoors. By 2020, the global gaming market was valued at $ 173.70 billion and is expected to reach $ 314.40 billion by 2026, posting a compound annual growth rate (CAGR) of 9.64%, according to the game market report by Mordor Intelligence.
But what is the most important factor that drives crypto enthusiasts to spend hours playing crypto games? It's not just for fun anymore. While playing the game, crypto players can earn rewards, which they can exchange for fiduciary money and spend in real life.
In crypto games to win, users gain control over game assets and can increase their value by playing. An example of a successful winning game project is the Axie Infinity - Monthly revenue increased from $ 103 in January to $ 364 million in August 2021. The game recently hit one million daily active users and cumulative revenue exceeded $ 600 million.
NFT games: how do they work?
NFTs can represent consumables, characters, and any other tradeable commodity. Users can sell their in-game NFTs to their peers and earn tokens with play-to-win models.
It all started in late 2017 when a blockchain-based collectible game called CryptoKitties became one of the first crypto game blockbusters. Players have overloaded the processing of the Ethereum network, decreasing the transaction time on the blockchain.
NFT games have evolved to offer "play to win" models as well as collect cute digital animals. NFT Play to Win games allows users to earn money by playing. For example, Axie Infinity requires the initial purchase of three Axis (game characters that act as NFTs). Once players ha a starting team, they proceed by completing several challenges to earn Smooth Love Potion (SLP), a tradable ETC-20 token listed on the Binance exchange
Playing and winning crypto games has become an emerging phenomenon. They have drawn attention in developing countries, where players sometimes make more money by playing than with their normal job.
The majority of Axie Infinity's daily active users (DAUs) are located in the Philippines. The game has gained momentum in Indonesia, Venezuela, Vietnam, Brazil, and other countries hard hit by COVID. In May 2021, PLAY-TO-EARN, a documentary on the growth of the game, went viral, increasing the number of users who decided to try it.
The Vietnamese game development company behind Axie Infinity sees the project as a gateway to encryption for many people around. the world.
“I think Axie is an amazing platform. It is fun and engaging. I am thrilled to be a part of it, ”Cuban said.
Crypto games, which started out as a niche project for people selling products online, have morphed into a growing industry that helps people in developing countries make money. However, it is a threat if the young or the unemployed choose to gamble to win traditional work.
Risks of cryptographic games
While crypto games offer people a legitimate way to get crypto and cash in fiat money, some risks should be carefully watched.
Risk of losing NFT
A common fear for crypto players is losing their tokens or NFTs while playing. There are several possible scenarios in which this could occur:
When you try to send it from your wallet to another wallet, which doesn't support your NFT type
If you have been the victim of a game encryption scheme and submitted your NFT for a scam
You have authorized a malicious smart contract to access your wallet
To avoid this risk, make sure you understand the types of tokens your wallet supports and always make sure you ship them to the correct address. Only interact with smart contracts from reputable projects and make sure you don't fall prey to a scam.
Volatility
If the token of a crypto game like Axie's AXS and SLP drops in value, players may not have time to reduce their losses. The game allows users to checkout every 14 days which means their tokens can be blocked when you need them.
Regulation
The transparency and decentralized nature of the blockchain mean that third parties are not required to verify and approve transactions. Gaming operators are generally not required to comply with regulatory standards such as AML (anti-money laundering) and KYC (know your customer). This increases the risk of fraud.
The future of crypto games: the analyst's point of view
“The cryptocurrency market has gone through several booms: ICO, Defi, and NFT. GameFi is a synergy of ICO, Defi, and NFT in the crypto market - an explosive mix. "
A young and progressive audience in the cryptocurrency sector that loves games and loves media such as streaming and blogging. Attracting the younger generation to the cryptocurrency industry through games, which also generate revenue, is a strong growth engine for the cryptocurrency market, "adds Mikhail Karkhalev." Furthermore, given the growing competition in the job market, the high unemployment due to the pandemic, the opportunity to earn decent money by playing is literally a lifesaver for people in developing countries. As a result, the demand for these gaming projects will continue to grow, which can be profitable for investors. in such projects.
This will be particularly pronounced among users in poor and developing countries.
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