ViaBTC | Gamefi: When Gaming Meets DeFi, How Can We Play to Earn?

4 min readAug 5, 2021


Recently, the sudden emergence of “blockchain gaming” built on the DeFi ecosystem gained growing attention. According to a July report released by Axie Infinity, the gaming platform has incurred more expenses in the past 30 days than other cryptocurrencies such as Bitcoin and Ethereum. Its 30-day transaction volume reached $670 million, making it the number one NFT product in terms of transaction volume in July, whereas the size of its daily active users exceeded 800,000 for the month.

In January of this year, Axie Infinity had only 16,000 daily active users, which have increased dozens of times in just a few months. On July 31, its single-day income exceeded $40 million, whereas the day-revenue of the world’s most profitable mobile game “Honor of Kings” was only $9.2 million. Such amazing income volume and user size have brought “GameFi” into the public eye.

GameFi’s emergence was closely related to DeFi’s popularity last year. Since last June, representative DeFi projects such as Uniswap and YFI have become popular. However, although DeFi’s user base and total value are growing, its business model is increasingly bottoming out, and innovative projects become hard to come by. For now, its new investment approaches dwindle, the user growth is slowing down, and the yield rate is also gradually reduced.

Last August, in the face of DeFi’s current bottleneck, YFI founder Andre Cronje came up with the concept of GameFi. He expressed his interest in the gamified token strategy. In decentralized financial games, capital can turn into items and equipment in the game. Now, the DeFi industry was still in the “TradeFi” (trade finance) stage, and in the future, it may enter the “GameFi” (game finance) stage. But the GameFi product proposed at this time is more of a financial product than a game.

Meanwhile, auctions of high-priced artworks and the popularity of digital collectibles such as the NBA’s Top Shot have sparked a new NFT boom. Therefore, the gaming product that integrates NFT and DeFi came into being as the financial attributes of DeFi are combined with the fun of the gaming, resulting in the “Play-to-Earn” gameplay.

In Axie Infinity, the players need to buy in NFTs in advance to collect and breed digital assets. In a traditional game, items are rented to the players by the game company, while in blockchain games, you have full ownership of the NFTs you buy. It means that all the NFTs or other tokens you earn in the game are your own and can be used to trade anytime and anywhere to earn actual income. In the “Play-to-Earn” model, the developer believes that players should make a certain amount of money for their time spent.

This “Play-to-Earn” model has taken off in some developing countries. As the epidemic continues, low-income groups in southeast Asia and other regions struggle to obtain a stable income. Axie Infinity’s “Play-to-Earn” model, which distributes 95% of the transaction proceeds to players, gives low-income groups a chance to make a living. It has made Axie Infinity an instant hit in countries like the Philippines. In the documentary Play-to-Earn, a 75-year-old Filipino couple earns $5 to $6 a day through Axie Infinity.

With the advance of blockchain technology, the financialization of gaming assets has been one of the most closely watched tracks. Since the advent of CryptoKitties, many game companies have been committed to entering this field. However, due to the congestion of the Ethereum network, blockchain games remain tepid. Until last year, with the progress in side-chain technologies, blockchain games are trending up and have lots of room to grow. Axie Infinity uses the Ronin side-chain built by itself to make game interaction faster and more convenient so that the game assets can better integrate with financial products with built-in financial functions such as transactions, staking, renting, and lending.

Relying on a “Play-to-Earn” approach, GameFi allows the investors to earn money from the game while the average gamers can still enjoy it. With this new model, playing games is not only fun but also profitable.

The emergence of GameFi brings new vitality to the gaming industry and gives DeFi, which has not seen innovation for a long time, new forms of investment and development opportunities. Merging the benefits of NFT, DeFi, and decentralized gaming, GameFi easily satisfies the entertainment and investment needs of different users, as is shown in Axie Infinity’s previous data. Although blockchain-based gaming is still tedious in the play mode and dulls in the plot, with the technology advances and the game creators’ continuous efforts, it will catalyze plenty of interesting financial and entertainment designs.