How DeFi Prediction Markets are Breathing New Life to GameFi

Play-to-earn (P2E) gaming has exploded in popularity in recent years and has now become among the most promising industries on the blockchain. 

In this segment, users have the opportunity to earn real money by simply participating. Such an incentive has propelled the industry beyond gaming, giving birth to GameFi— the intersection of video games and financing using blockchain technology.

Early years of GameFi

Platforms such as Axie Infinity and CryptoKitties were among the first to introduce the concept of GameFi. Utilizing blockchain technology, these platforms develop in-game items that are unique and transferable in the form of an NFT.

After earning rewards, users export the coins they got to a crypto wallet and convert them into fiat currency. In games where NFTs are earned, they can be sold to other players, collectors, or speculators at various marketplaces (both in-game and secondary markets). 

Through the exchange of in-game currencies and NFTs, users from different parts of the world were able to generate income just by playing games on their computers and/or smartphones. 

At the height of its popularity in 2021, Axie Infinity was able to attract 2.8 million daily users and a total trading volume of $3.8 billion.

Aave’s Aavegotchi, which has roots in DeFi, lets players stake tokens while playing with cartoon creatures represented by NFTs. Users earn a yield on Aave just by playing the game. 

However, many potential users have been discouraged to participate in some P2E platforms due to roadblocks to entry. Although many play-to-earn games are built on popular blockchains (like Ethereum and Polygon), converting them to a more liquid asset isn’t always the easiest process. NFTs can take time to sell, while in-game coin values can fluctuate quickly.

The current state of GameFi 

The total market cap of GameFi has climbed to US $55.38B as of February 2022. Blockchain gaming is estimated to grow to $50B by 2025, a growth rate 10x of traditional gaming. The global GameFi market is estimated to grow to about USD 38.27 billion by 2028. 

According to a survey, some of the most important factors when investing in GameFi were attributed to Community (69%), Team (67%), and Gameplay (51%), amongst others. The market holds massive potential growth. However, as Web3 continues to evolve, GameFi will adapt to the changing ecosystem.

Despite the potential, issues in the business model and in-game economy of the early platforms have resulted in a decline in the user base. 

Taking GameFi to the next level

Those who have seen the potential of P2E are now awaiting what blockchain technology has to offer next to let users earn money from gaming.

Industry experts posit that the next generation of P2E will come in the form of DeFi prediction markets. This idea makes sense since upcoming platforms such as Triple 5 are already setting up a more sound infrastructure based on prediction market protocol. 

In prediction markets, users can also win rewards by placing wagers on the outcome of future events. Triple 5 is focusing on the future prices of today’s most popular digital currencies, in which users can place a prediction on whether the price will go up, down, or remain unchanged.

By keeping the focus on crypto price prediction, Triple 5 ensures that each game result is processed in real-time and the winnings are dispensed immediately after.

Markets in Triple 5 are created via Automated market makers (AMMs), ensuring all user transactions are processed in a permissionless and automatic way.

Triple 5 is also able to transform the financial reward system to become more attractive and engaging by having the business model dependent on real-world events facilitated by blockchain. 

GameFi is still evolving, and the future of blockchain gaming is all set to grow in value as new technology trends are integrated. Triple 5 is aiming to take GameFi to even greater heights by creating an open, secure, accessible, and well-designed prediction market ecosystem.