What is blockchain gaming? Quickly understand the opportunities and investment thresholds in this sector

Since 2024, the GameFi track has gained unprecedented attention. Among the new projects listed on several mainstream platforms, over 40% come from the GameFi sector, covering all types of games from casual nurturing to competitive battles. This not only reflects increased market interest but also indicates that the GameFi track has moved from early exploration to a segmented vertical stage.

So, what is GameFi? Simply put, GameFi refers to games developed based on blockchain technology, where players’ game assets (characters, items, tokens) exist as on-chain assets with ownership and trading value. Compared to Web2 games, the biggest difference in GameFi lies in the economic model design—players can generate economic benefits through gameplay actions.

To find investment opportunities in the GameFi track, first understand what parts this track consists of.

The Four Pillars of the GameFi Ecosystem

1. Infrastructure Layer: Game Public Chains

Game public chains are the foundational layer supporting GameFi, providing blockchain infrastructure services for game operation. The valuation logic for these projects is similar to that of public chains, mainly depending on the number of games within the ecosystem, daily active user scale, and transaction fee income. Common game public chain tokens usually have scale advantages, but the entry barrier is also relatively high.

2. Ecosystem Operation Layer: Game Guilds

Game guilds in GameFi serve as intermediary organizations connecting games and players, generating profits through NFT leasing, game boosting, skill training, and other business models. These organizations often operate as DAOs, and as they grow, some have evolved into investment institutions. The value of guild tokens depends on the assets they manage and their business income.

3. Core Layer: The Game Projects Themselves

This is the largest part of the track. Based on gameplay differences, it can be divided into the following categories:

• Competitive Battle Types (RPG, FPS): These are the mainstream in the market and the most fiercely competitive subfields. RPGs typically have complete storylines and character growth systems, while FPS games emphasize real-time operation and competitiveness. Due to intense competition, top projects in this area often feature AAA-level gaming experiences, luxurious development teams, and large-scale funding.

• Strategy Games: Players win through tactical decisions rather than pure operation. The market size is moderate, with a relatively smaller player base.

• Sandbox Games: These games form their own ecosystems, emphasizing openness and freedom, covering building, production, trade, etc., without focusing on competition.

• Casual Entertainment (Nurturing, Card Games): Simple gameplay, low participation threshold, but limited explosive potential. Player stickiness is often lower than the above types.

Which GameFi Projects Are Worth Investing In? Three Core Criteria

Before participating in a GameFi project, evaluate it from the following three dimensions:

Significance of Financing Scale Signal

If a GameFi project can raise over $10 million, its fundamentals are usually not poor. Sufficient funding indicates that the project team has the ability to ensure game quality and long-term operation, reducing the risk of exit scams. Conversely, projects with small financing should be approached more cautiously.

Team Background Determines Narrative Power

Since most GameFi projects are migrating Web2 gameplay onto the blockchain, innovation is often lacking. The key is the team’s IP background and past achievements. Teams with experience in well-known Web2 game development or involvement in hit games naturally have trust advantages. An ideal founding team should have at least 5 years of game development experience.

Game Quality as Long-term Support

If a project lacks strong financing and team background advantages, then the game quality must be outstanding—at least at AAA level. Developing AAA games involves high difficulty and large capital investment, which actually reduces the probability of project exit scams.

A project that possesses any two of the above three factors has the potential to become a top project. Combining gameplay and community heat analysis, investors can make more confident judgments.

Comparing the Returns and Risks of Three Investment Methods

Investing in GameFi essentially involves three paths, each with different risk-return balances:

Method 1: Buying Tokens on the Secondary Market

This is the simplest and easiest way to invest. Once the project’s token is listed on exchanges, you can buy directly.

Risk Assessment: Moderate risk. Note that most GameFi project tokens are generated from in-game economies, meaning secondary market buyers are essentially taking on the output of active players. If game activity declines, selling pressure on tokens will increase.

Return Expectation: Moderate. Market volatility makes it difficult to achieve excess returns.

Method 2: Purchasing Game NFTs

Investing directly in game NFTs without participating in gameplay offers the lowest cost-effectiveness among the three methods. Although NFTs, as primary assets, theoretically have higher upside potential, there are several critical issues:

• Poor liquidity; assets are hard to cash out if the project fails
• Limited quantity of NFTs, restricting investment scale
• High entry barriers, unsuitable for small investors
• Full project risk exposure, without the diversification advantage of tokens

Risk Assessment: Highest risk. The risk of a single NFT becoming worthless is much higher than that of tokens.

Return Expectation: Highest uncertainty. Good projects may double in value, poor projects may go to zero.

Method 3: Participating in Game Gold Farming

This method offers the highest returns but also the highest entry barrier. The most profitable period for a GameFi project is during testing. At this stage, participation is low, and early players can often earn dozens of times excess returns, including token output, NFT appreciation, airdrops, and rewards.

Risk Assessment: Lowest risk. You gain assets through actual gameplay rather than pure financial speculation.

Return Expectation: Highest returns. But this depends on correct decision-making.

However, high returns come with high thresholds. To profit from GameFi gold farming, you need:

1. Research Ability—Accurately judge project prospects and estimate personal earning potential
2. Time Investment—Determine if you have enough time to achieve gold farming goals
3. Gaming Skills—Some high-difficulty games require real operational skills

Most investors lack at least one of these, which is why early participants in on-chain interactions can reach hundreds of thousands, while early GameFi participants often only number in the thousands.

Practical Recommendations

If you just want to participate quickly, buying tokens is the best choice. But if you aim for excess returns, you must invest in research and time, participating in gold farming during the project testing phase.

GameFi is not a get-rich-quick tool but a track that requires knowledge accumulation, time investment, and decision-making skills. Choosing the right projects and methods is key to steady profits in this track.