The difference between GameFi and Blockchain Gaming

GameFi vs Blockchain Gaming

Gamified Finance, or GameFi, is another concept from blockchain gaming, but is mostly used interchangeably in the space.

GameFi has been the term most used in the crypto space to describe Web3 games since the industry boomed in 2021. The word evolved from the previous concept of Decentralized economy, or DeFiwhich describes financial protocols built on the blockchain, such as exchanges, staking and lending protocols.

Since gaming protocols began to provide financial incentives thanks to PlaytoEarn boom, the community started calling this new field GameFi. However, the PlayToEarn concept began to change to PlayAndOwn as the financial sustainability of the previous model was called into question. The change also meant that some members of the community do not believe that “GameFi”, as a term, captures the true essence of recent gaming projects.

One of these community members is Aleksander Larsen, Axie Infinity’s co-founder: He shared a video on October 2, explaining the difference between the two concepts shortly before ending his Singapore tour for Token 2049.

“A lot of these smart people they talk about GameFi and I don’t think it means what they think it means,” Larsen said in the video. “GameFi, by definition, means gamified economics. Blockchain gaming means something else entirely.”

According to Larsen, an example is GameFi where users “level up” for each transaction they make on a particular protocol. It can apply to most financial products in the traditional and decentralized space.

Blockchain gaming, on the other hand, is the creation of a game-first protocol with a player-owned economy and supported by a community.

Industry examples

Gamified Finance is not a new concept introduced by Web3. Traditional finance, through the rise of FinTech, has introduced the concept to users as a way to engage them in a different way. It is used to promote financial literacy without having to explain the concepts through a class.

Examples of gamification of finance are through banking apps that add progress bars to help with a user’s savings goals, or a portfolio tracker that shows the “level” of your account based on the transactions you’ve made on their platform.

The best example of GameFi in the Web3 space is the DeFi Land protocol. Although the game has already introduced several in-game features, a fictitious game wrapper is still added to the DeFi protocols. Staking comes in the form of crafting items or watering crops, while the marketplace is basically one Decentralized Exchange (DEX) protocol.

Alternatively, blockchain gaming projects basically build a game first, then add monetization mechanisms and financial protocols to supplement the gaming experience. Projects like Thetan Arean, Axie Infinty and BigTime focus on a gaming experience that the community will enjoy and have a live economy that needs to be balanced.

In particular, the Axie Infinity team has done a great job developing their game, creating a community around their project, and adding DeFi protocols to supplement the entire experience. The main game had several iterations since its launch, the current one being Axie Infinity: Origins.

They have also cultivated a loyal community that believes in the team’s vision by ensuring that the entire user experience is beneficial to players. Axie has also built staking and DEX protocols that help users manage tokens.

What is Axie Infinity:

Axie Infinity is a PlayAndEarn blockchain game where players breed, collect and play with digital pets called Axies and earn from their interactions. It is built on Ronin, an Ethereum-based sidechain developed by Vietnam-based game studio Sky Mavis. The protocol set eyes on the PlayAndEarn gaming industry back in 2021. In addition, the team is building a digital nation where every community member comes together to play, earn and live in Lunacia.

Where to find Axie Infinity:

Website | Twitter | Substack | Medium | White paper |