GameFi basically means “game” and “finance”. More to that, GameFi nowadays is an intersection of gaming, DeFi, and NFT (non-fungible token). The current identifying feature of GameFi is largely tied to play-to-earn (P2E) games. This is because the incentives have become quite attractive to users, thus giving rise to large P2E communities.

GameFi and play-to-earn (P2E) games create distinct models that balance gaming enjoyment with financial rewards. For example, In traditional video games, a player buys in-game items that money goes to the game operators, and the in-game items have no value in real world. The play-to-earn feature of GameFi projects changed the situation. In GameFi games, games can be designed to incentivize for achievements such as winning tournaments or specific battles between characters, breeding characters, trading digital property, or in-game marketplace trading. In-game items such as champions, costumes, weapons, and tokens, are represented as NFTs, and gamers acquire these items through playing the games or buying from the game's marketplace. The NFTs can be traded for profit or exchanged for cryptocurrencies.

most P2E games benefit a central operator at the expense of their many individual players. This is the antithesis of Web 3. A more sustainable, impactful P2E ecosystem must be free, fair, transparent, and purposefully decentralized. this is what’s missing in recent P2E games. Alongside to this P2E games need to be able to attract gamers and grow the community even without the earning aspects of it. The earning aspect is more of a means to amplify the growth.