Disruptions within a disruptive industry are very hard to achieve, but on the crypto and blockchain side, this seems to be the norm.
At first, there was DeFi, which gained immense popularity starting in 2020 and reached new heights this year. This is mostly due to the economic issues faced globally, with DeFi offering better investment alternatives. However, GameFi is another iteration that has surpassed DeFi popularity, with half of all active private wallets that were connected to a dApp were to decentralized gaming.
The DeFi and GameFi Difference
But what’s the difference, you may ask. Let’s break down these.
DeFi (Decentralized Finance) is about using smart contracts to offer different investment vehicles to users. As a decentralized option, these do away with the middlemen. This means that all DeFi applications and platforms are able to offer higher profits and better rates to both parties in a DeFi deal since there are no intermediaries who would ask for a commission.
For example, a simple DeFi platform offering crypto loans would mean that the lender gets a better profit percentage, while the borrower would get a lower interest rate. This is possible because the smart contract is a computer code and doesn’t require money in the form of fees or commissions.
Game Finance, GameFi, on the other hand, is merging games with the crypto financial applications commonly found in DeFi (staking, lending, farming etc.) and the novel use of crypto assets and NFTs within the game. This enables the assets and rewards won to be ported outside the gaming environment and being sold for profits, opening up a whole new source of income. Concepts such as Play to Earn and Free to Play are at the core of GameFi.
But Why is GameFi More Popular Now?
DeFi, even with its large market that is running in the billions, is now overshadowed by GameFi and the several platforms that are arising. To understand the reason, we must first understand the human mind.
No one hates money and wealth and DeFi platforms have been able to provide millions of people the opportunity. However, in the end, it is all about users finding the best possible yields possible, an exercise in itself.
GameFi, on the other hand, adds in a crucial mix that humans crave: the aspect of being entertained. Combining gaming into crypto products means that people can play games and enjoy, while they are making real earnings. Merging the two elements is what has propelled GameFi today to take over DeFi, leaving it in the dust.
Just think of this. The Play to Earn (P2E) aspect is the crux. In traditional games, you can complete tasks, play rounds and missions to earn different points, tokens and in-game items. But ultimately, they are tied into the game and of no use, especially when you complete the game. In GameFi, the tokens are crypto assets and the in-game assets are represented through NFTs. You can use the crypto tokens to upgrade game assets, characters and stats, while the in-game assets can be bought and sold in the marketplace. You can even cash these out by converting your assets into your favorite crypto coin or even cashing these out.
Like we have said before, this means that the more you play and win, the more you earn!
Future of GameFi
We are pretty much sure the question of investing in DeFi or GameFi is popping up in your mind right now. While DeFi and GameFi both provide people with the option to make profits and earnings, both are different since DeFi is all about staking and investing.
GameFi platforms like our Lumi World, on the other hand, provide you with all these and does one better. You get to play an expansive game that is expansive and has other minigames embedded in it. You get to enjoy a never-ending game, living your fantasies of making it big in the Dream City as a tycoon or just going to the different events — all at the same time letting you earn tokens and NFTs.
The answer to your question is simple: Yes, you should prefer GameFi over DeFi. It, after all, offers the same things that DeFi platforms do.
As GameFi platforms get more mature and open-world environments such as Lumi World are launched, there is a clear uptrend towards this sector as people move away from plain and boring DeFi.
Want to know more? You can continue to check up on our blog or read our whitepaper here, or follow us on our social media accounts:
— — — — — — — — — ➡️➡️🔔 HERE 🔔 ⬅️⬅️ — — — — — — — — — —