Decentralized finance continues to make its indelible mark on the blockchain, so why stop there? According to Michael Porter, a renowned academic, “Innovation is the central issue in economic prosperity”. This opinion remains in the halls of truth as innovation thrives in cryptocurrency and blockchain.

Today, decentralized finance and gaming have become intertwined and are made into one. DeFi games are now floating in the blockchain skies and sailing on the seas of cryptocurrency, providing entertainment and, at the same time, creating an avenue to earn real-world value as people play. Let’s take steps that will lead us to understanding what DeFi games are.

What are DeFi Games?

Before we define what DeFi games are, let’s take a moment to get an idea of the concept of decentralized finance. Decentralized finance is a fintech movement that uses blockchain distributed ledger technology to create financial systems and allow financial transactions without centralized authorities such as banks, the government, and finance corporations.

Now that we have a basic understanding of DeFi, we can discuss DeFi games.

DeFi games, also known as play-to-earn games, are online games that utilize blockchain technology and DeFi protocols to allow players to earn tokens that have real-world value from their in-game activities.

Unlike traditional games, where the value of assets is limited to in-game transactions, DeFi games allow users to earn assets by playing games, staking rewards like tokens, and trading their earned rewards on open markets to create real-world value.

Is There a Difference Between DeFi Games and NFT Games?

While some games incorporate both technologies, such as utilizing NFTs to represent distinct in-game items and using a DeFi model that allows players to earn tokens and engage in a decentralized in-game financial system, DeFi games and NFT games have differences.

The main difference between DeFi games and NFT games lies in their primary objectives. DeFi games primarily focus on the integration of DeFi principles into the game’s ecosystem, whereas NFT games focus on the utilization of NFTs to represent in-game assets that carry real-world value.

DeFi games allow players to earn cryptocurrency by participating in decentralized financial activities such as lending, borrowing, and trading within the game’s ecosystem. In contrast, NFT games enable players to own and trade their in-game assets as NFTs, which can possess real-life value.

How DeFi Games Work

The infrastructure on which DeFi games operate is, of course, built on the blockchain, which, as we know, provides a secure and clear-cut way to store and transfer value. The Ethereum and BNB Chain are the most common blockchain portals used for DeFi games, Ethereum most especially.

DeFi games usually have unique in-game tokens that players use for gameplay and their financial activities. These tokens are issued by the blockchain platform used by the game, such as Ethereum or BNB Chain, and can be traded on decentralized exchanges (DEXs). These tokens are earned by completing various tasks in the game.

How Then Do People Make Money From DeFi Games?

There are several ways to make real money from DeFi games. The play-to-earn concept is reliable and has proven to be completely different from the traditional pay-to-play system. Here are some routes players can take to make money while playing these games.

In-Game Rewards

As the technology is based on in-game task completion in return for native tokens, players who play and complete their tasks and collect their DeFi tokens can trade them for other cryptocurrencies or fiat money on real-life exchange platforms.

Trading Collectibles

Collectibles are a part of many DeFi games. They are special and limited in-game rewards for completing special tasks. These collectibles can be bought, sold, and traded on real-life blockchain platforms for great prices in the marketplace.

Staking and Yield Farming

DeFi games allow users to stake in-game rewards in a smart contract, yielding interest over time. Yield farming is also available in some DeFi games. This simply allows users to provide liquidity to the platform’s decentralized marketplace and, in turn, generate high returns.

Guilds or DAOs

DeFi games offer crypto gaming guilds that operate under a decentralized autonomous organization (DAO) to pool resources and share the spoils of their victories. If players in a guild pool their assets to invest in a high-level collectible in the game and get good returns, they share the profit and may decide to do business again some other time after a successful run.

While these are surefire ways to make money on DeFi games, they are also investments that come with risks. Players should always have a risk assessment strategy and understand how to navigate properly both in-game and on the exchange platforms.

Top 10 DeFi Games to Check Out

Here are the Top 10 DeFi games from sources across the web.

Aavegotchi
Alien Worlds
Axie Infinity
Crabada
Cryptoblades
Decentraland
My Neighbour Alice
Space Six
Splinter Lands
The Sandbox

Final Words from the Game Master

It is indeed an exciting idea to be able to earn while you play games. DeFi games combine financial rewards and entertainment and change what it means to play games. DeFi games show promise, and as the industry continues to develop and more developers and players join the train, innovation is bound to soar and create new opportunities for everyone on board.