One of the hottest things in the cryptocurrency world right now is GameFi. Its name reflects the combination of the old-fashioned thrill of winning prizes with new crypto developments in what is known as DeFi. GameFi players can trade, lend or rent out their winnings or even borrow against them. You cannot do that with the stuffed kitty you scored at the county fair.
As its popularity soars, there is a debate over whether GameFi will remake gaming or just separate the credulous from their money. Reports of people borrowing to play raise the prospect of GameFi democratising crypto opportunities — or becoming a form of digital sharecropping.
1. What is GameFi?
DeFi stands for decentralised finance, a field in which token-based transactions like lending and borrowing take place on blockchains — decentralised digital ledgers similar to that first used with Bitcoin. In its most common usage, GameFi refers to decentralised applications (“dapps”) with economic incentives. Those generally involve tokens granted as rewards for performing game-related tasks such as winning battles, mining precious resources or growing digital crops. It is an approach also known as play-to-earn.