Crypto glossary
GameFi (play-to-earn)
GameFi combines video games with crypto tokens and NFTs, letting players own in-game items and, in play-to-earn models, earn tokens that can be sold.
In a GameFi title, characters, land or equipment are usually NFTs held in the player's wallet, and the game economy runs on one or more tokens. Players can trade these assets on open markets, and in play-to-earn designs they receive tokens for winning battles, completing quests or breeding items.
Axie Infinity brought the model mainstream in 2021, when players in countries such as the Philippines earned more than local wages and guilds lent starter NFTs to new players in exchange for a share of earnings. In March 2022 the Ronin bridge linked to the game was hacked for more than $600 million, and its token economy had already been weakening.
Most play-to-earn economies depend on new players buying in to pay existing ones, so rewards shrink when growth slows. Later projects have shifted toward play-and-earn designs that put gameplay first and keep tokens in a secondary role.
Example
A player who must buy three NFT characters for $300 to start earns a hypothetical 20 tokens a day; whether that pays back depends entirely on the token price holding up.
Related terms
Latest articles on GameFi
- GameFi’s Future Won’t Be Decided by Token Prices—But by Builders
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