This is a contributor content by Aliaksandr Sheliutsin, Co-founder of GameFi project ZombieTrain.
What is GameFi?
GameFi is a special combination of two worlds: gaming and finance. It mixes entertainment with financial rewards in a very new way. Gone are the days when players simply grind to get to a new level to earn some points or trophies; players are earning real-life assets-either in cryptocurrency, NFT, or other valuable rewards-in this new digital landscape.
This is a transformative shift: what was once the mere unlocking of in-game achievements now unlocks real and tangible benefits outside of the screen, making time spent gaming directly valuable. GameFi became a synonym for gaming that pays, and this concept started to grow at an impressive rate. More players are flocking to these platforms not only for fun but to build wealth through their gaming skills.
GameFi is only going to be more extraordinary once the technology in both blockchain and cryptocurrency fully matures.
How Telegram Games Are Leading the Charge
Telegram, a platform traditionally known for messaging, has now emerged as an unlikely hub for GameFi projects, ushering in a new era of user engagement and entertainment. A growing number of games such as Hamster Combat, Catizen, Notcoin, Dogs, and Gatto are using Telegram’s massive user base and seamless communication features to build dynamic, engaging GameFi experiences.
Such games, with addictive gameplay and real-world earning opportunities combined, have gained massive appeal. In fact, some of these games have attracted tens of millions of players from across the globe.
While playing games in Telegram has the social layer of chatting that enhances gaming by fostering communities, instant updates, challenges, and rewards are possible. It is not just about playing the game itself; rather, it involves connecting with your fellow players, building strategies, and, of course, gaining tangible rewards along the way. This seamless integration of chat and play makes Telegram the perfect home for the growing GameFi movement, with a scaling ecosystem in both user numbers and engagement.
How to Distribute Rewards?
Distribution of rewards has always been one of the core challenges in GameFi. Most GameFi projects in the past have been cursed by unsustainable reward systems, akin to Ponzi schemes in which rewards can only be paid out while there is continuous new entry of players into the ecosystem. This eventually collapses as the growth in players slows down and a system unable to pay out. So, the big question is, how do GameFi projects distribute rewards honestly and sustainably for the long run without falling into the trap of unsustainable models?
Scenario: An engaged player has spent 8 hours every day playing for 20 days every month. Even at maximum ad revenue and incentives, his reward comes out to be $80 a month. While this may be significant in some regions, the actual cost of delivering these ads and incentives to such committed players would actually decrease their overall payout. Even in areas where $80 is meaningful, the ad-driven model fails to provide a truly sustainable or rewarding experience for both the player and the platform. It is here that innovative approaches to reward distribution come into play.
What Are the Solutions?
- Player Categorization
Not every player has the same goals or expectations when they come into GameFi. Some are there for the fun, while others come purely out of the interest and lure of money to be made therein. We can normally discern two major types of players within the GameFi ecosystem:
- Fun-first players are motivated foremost by the fun and excitement they get from playing. While rewards are a welcome additional positive, it’s far from the core motivation in and of themselves.
- Earners are more financially minded when it comes to games. They are hard-core grinders who play the game in order to make money and like the payout of their labors.
By recognizing these distinctions, GameFi projects can tailor their reward structures to better serve both groups. For instance, it can concentrate reward programs among the top earners to incentivize those serious players without losing the fun and entertainment values for casual players. This allows for a balance that maintains both high engagement and sustainable growth.
- Controllable Payouts
Giving players control over when and how they withdraw their rewards can be a powerful tool for stabilizing the game’s economy. This approach would allow the project to apply market pressure to the tokens in circulation. While many systems implement withdrawal thresholds, they often fail to address the larger issue of token supply and demand balance. What if we took a more controlled, systematic approach to payouts?
Instead of allowing for constant withdrawals, the project could go with a monthly or quarterly payout. This would have two immediate advantages:
- Predictable Supply: Limiting the frequency of payouts would allow the project to manage the token supply more effectively by buying back tokens as necessary to maintain price stability.
- Psychological Boost: Indeed, players will better appreciate large, lump-sum payouts. These may be far more rewarding to them than a lot of small, frequent payouts. Larger payouts can have significant psychological effects, giving the player a feeling of success and satisfaction that keeps them invested.
- Smart Long-Term Tokenomics
The very foundation of any successful GameFi project is sustainable tokenomics. It is not just about the distribution strategy or how much is allocated for in-game rewards; rather, it is an overall strategy involving the total supply of tokens, buyouts, burns, and mechanisms of governance. With a well-structured strategy for token distribution and management, a GameFi project can build a long-lasting, thriving ecosystem that attracts both loyal players and strategic investors.
Good Tokenomics:
- Axie Infinity: A two-token model-while SLP is used to reward participants inside, AXS, on its side, functions for governance purposes. Axie Infinity breeding token burn mechanics are really good in balancing supply with demand, thus good for the in-game economy’s sustainability.
- Catizen: Accomplished a very interesting reward structure that could promote long-term player participation and retention of value through well-thought-in-game utility and sustainable token distribution.
Bad Tokenomics:
Hamster Combat is one of those classical examples of the “hit-and-run” system, whose reward structure is very front-loaded: it is big while attracting early users but isn’t planned to be sustained in the long run. With falling interest, so falls the system’s capability to keep those unsustainably big payoffs going.
While bad tokenomics can create a surge of hype and early growth, they often lead to inevitable collapse. A strong tokenomics strategy that incorporates thoughtful planning, sustainability, and balance will ensure long-term success for both developers and players.
- Token In-Game Utility
For a GameFi project to be successful, there needs to be real utility within the in-game token. When players can easily convert tokens into real-world value or use them in meaningful ways within the game, the ecosystem remains strong and balanced. However, tokens that have no real utility or serve only to increase supply without creating demand are a recipe for failure. Here’s what works-and what doesn’t:
Good Utilities:
- In-game purchases: The token is applied to purchase skins, upgrades, boosts, or other premium content. This creates an inherent value for the token and incentivizes players to earn and spend it.
- Event participation: If there are events that can only be joined in the game with tokens, that can build hype and create demand.
The perks of partnership could be the partnership with external brands or services to offer real-world rewards, such as discounts or merchandise, that add value to the token.
Bad Utilities:
- Staking rewards: Staking increases supply without driving demand; this is a toxic cycle in which tokens will be devalued over time.
- Liquidity pools: Adding more liquidity without creating intrinsic demand just floods the market with tokens, leading to inflation and devaluation.
- Rule of Thumb: A utility should add value either to the player or to the ecosystem. If a utility will only inflate the supply without creating demand, it should be reconsidered. A balance will be necessary for sustainability.
Final Thoughts
Crafting a non-volatile GameFi economy is by no means easy-it needs to be considered right through player motivations, token economics, and reward mechanisms. Building a lucrative GameFi environment with focused attention on player categorization, payout structure control, smart tokenomics, and in-game utility can surely assure players of an enjoyable yet profitable experience.
GameFi is huge and is moving very fast. As the sector matures, the next wave of projects will move beyond the Ponzi-like models of the past into genuinely sustainable, enjoyable, and profitable ecosystems. Be it grinding away in Hamster Combat or strategizing your way through Catizen, keep in mind that the landscape in GameFi is changing rapidly-and you are a part of this exciting revolution.
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