GameFi and P2E: What Makes a Game?


My Definition on GameFi

For me, there is no difference between most GameFi and DeFi projects except that GameFi is more refined, anti-whale.

The premise of Play-to-Earn (P2E) is that enough new comers into the game, and a stable-enough token distribution model to maintain the lifespan of the game with limited individual income, but all of which could not make a game sustainable in the long run.

Game or Fi?

The “Fi” in “GameFi” means it’s related to finance. P2E and DeFi infrastructures are the bridge between “Game” and “Fi”, and P2E is the key factor of the lifespan of games. For now, most of the players are not attracted by the gameplay, but the ROI of playing. Therefore, the liquidity, buying power, release rate and distribution mechanism of tokens will limit the lifespan of the game directly.

A large number of games DO NOT have gameplay, but is a pension-like ponzi game of new comers paying the old ones. The game designers are also not adding gameplay, but always trying to find ways to extend the life cycle of the game like a ponzi-engineer.

Paradox of P2E

Therefore, the P2E itself may all be a paradox to me - the revenue of traditional game belongs to game companies and gold farms (and game companies are still finding ways to prevent gold farms), while the revenue of blockchain games is shared between game companies and ordinary players. Why should a company with high quality game development ability share the revenues with players generously, and why do the people with bot development ability not come to take a share of the cake and leave the ordinary player profitable for a long time?

Deep Dive

Refined Ponzi

GameFi is more refined because most projects develop their contracts independently, putting a different skin on different ponzinomics, such as single tokens (i.e., early BSC games), double tokens (i.e., Axie Infinity), fiat standard (i.e., CryptoMines), etc. to try to extend the life cycle of games. This is also what I mentioned in the previous MaoDAO Research’s Twitter Space - the biggest problem with GameFi is that the ROI for players is too high, if the return is reduced a bit, the game can live a bit longer instead.

Axie Infinity is the leading game of the blockchain games, but there are still no one can stop the continuous downward trend of $SLP, and which needs to rely on $RON to maintain value and keep players profitable. More than a month has passed since Ronin Chain started mining, and $SLP is down nearly 80% from its high.

This time the worst hurt are the whales who do not play Axie Infinity, but wish to participate in the GameFi prosperous ecology - they finally could enter a pool with large capacity, but become the yield for gold farmers. My high-net-worth friends farming $RON without hedging lost a ton, and those who hedged but do not dynamically adjust their exposure (as $SLP falls, the $SLP exposure will increase, so you need to continue to increase short volume) have also bearing more than 20% of the impermanent loss.


GameFi is anti-whale because any individuals cannot enter a game with big money. GameFi is not like DeFi where the rich and poor can have the same APR, but rather players need to invest a certain amount of time to accompany each share of money they invest, in exchange for a share of income. Therefore, for whales who do not have bot development capabilities, they cannot enter a game with as much money as they can as they do on the DeFi project.

Bots in Games

From the bots’ point of view, the bots for blockchain games need to be highly customized on each game (unlike DeFi, where bots can be slightly modified to achieve interoperability in most scenarios), so the cost of writing the bot rises. However, the rising cost of writing bot does not mean that bot no one write bot, but compared to DeFi, there are fewer people to share the cake, and each person has a bigger share.

As an individual developer, because the development cycle of each bot is long and the life cycle of the game is unstable, for most of the time, they have no energy to develop bots game by game. As a result, there is a need for more professional, teamwork bot development studio (the largest studio I know of has over 60 devs), while individual developers will continue to choose to stay in the DeFi ecosystem to develop new bots or iterate on existing ones.

Bots are like gold farms in traditional games. The ultimate scenario for bots is that individual players have so little to gain that they cannot gain from the game as an individual. In that sense, traditional online games were once P2E before the gold farmers moved in.

Anti-bot is even more impractical, there are even bots and gold farms in LOL and WOW, how dare a blockchain game to say they can resist bot and farmers?

Existence of P2E and Results

Comparing to the traditional games, blockchain games achieve P2E because in-game asset could be easily exchanged into fiat, which is actually a benefit of blockchain technology. Traditional games can also be P2E, but the channel of asset <-> fiat costs a lot (e.g., maintaining an e-shop), which is difficult for individuals. If there are no P2E, why a game need the blockchain?

The result of the low friction of P2E for blockchain games is that players will measure the opportunity cost for each action because the dollar value corresponding to the tokens in their hand is clearly visible if they check on DEXs, and can be easily turned into fiat to pay for a decent dinner.


Based on the above premise, I don’t think guilds that merely attract massive players and scholar will survive this competition, because a small and well-equipped team can stack up hundreds of times the number of bots, and the behaviors of which can completely mimic real players. The value capture of guilds also requires other forms of effort, such as eSports.

At the same time, a mature game should have “no optimal solution”. At the moment, the optimal solution for all games is to sell off farmed tokens relentlessly, while a truly qualified game should be mechanically complex enough to allow bots to participate in a scenario with low marginal utility. High value-added decisions and behaviors should be related to the current state of the game (e.g., what should you buy right now if you’re a dealers in EVE Online?). Traditional online games also have gold farms, and gold farms are only involved in a small part of the game’s ecology, and other gameplay and mechanisms are stacked on top so that the output of gold is not the only factor affecting gameplay, and therefore it is difficult for the game’s economic system to collapse.

The most important thing is that a good gameplay is what makes a game be called a game.