How To Start Playing DeFi Games
DeFi, or Decentralized Finance, is a new approach to financial services that relies on blockchain technology to offer more transparency, security, and accessibility. DeFi games, a subset of the web3 gaming ecosystem, that allow users to earn cryptocurrency while playing.
By leveraging game theoretical elements, DeFi games make it fun and easy for players to interact with the larger system. Players can use these games to learn about cryptocurrency, blockchain, and DeFi while potentially earning rewards in the process.
In this article, we explore how to start playing DeFi games today!
3 Factors to Consider Before Playing DeFi Games
It’s important that players know about the following before they start playing DeFi games in order to protect their investment and maximize their profits.
1. High Risk, High Reward
One of the main things to know before playing DeFi games is that they come with a high level of risk. These games are highly speculative and can result in massive financial losses.
For example, the infamous PancakeBunny hack on BNB Chain resulted in a loss of over $45 million for investors. Thus, it is essential to understand the risk-reward ratio of the game and invest only what you can afford to lose.
2. Very Volatile
Another critical thing to keep in mind is that DeFi games are highly volatile. The value of in-game assets, such as cryptocurrencies and NFTs, can fluctuate significantly and rapidly.
For instance, the value of the Axie Infinity token ($AXS) increased by over 3,200% from January to November 2021 before dropping by about 45% within the next 30 days. Therefore, it is crucial to stay updated with the market trends and not invest more than what you can afford to lose.
3. Initial investment
Always consider the initial investment required to start playing these games. Many DeFi games require a high initial investment to participate in the game's economy.
Axie Infinity, for example, requires three Axies to start playing, which can cost 1000s of dollars. Additionally, there are other costs, such as transaction fees, gas fees, and more.
Do thorough research and ensure that you have enough funds to participate in these games.
3 Steps to Start Playing DeFi Games
Before you start playing DeFi games, there are certain things you should take into consideration. These include: knowing blockchain basics, familiarizing yourself with DeFi terminology, and setting up your web3 wallet.
1. Know Blockchain Basics
DeFi games rely on the same underlying technology that powers cryptocurrency, namely blockchain. So, it is important to have a basic understanding of how this technology works and the underlying concepts behind it.
To get up to speed quickly, you can start by reading some introductory articles or watching tutorials like Alchemy's Blockchain 101 guide. You can also join online blockchain communities with active discussion forums and engage with other people.
2. Familiarize Yourself With DeFi Terms
You should also to familiarize yourself with the different terms used in the DeFi space such as liquidity mining, staking, yield farming, impermanent loss, and more.
Knowing these terms will help you understand how DeFi works and make informed decisions when playing a game.
3. Buy Crypto, Connect Wallet, and Start Playing!
Once you have the basics down, it’s time to start playing. You will need to buy some cryptocurrency, and then connect your wallet to a DeFi game's website.
Depending on the game and its rules, you can then start playing and earning rewards..
How to Be Safe Playing DeFi Games
To have a safe experience with DeFi games, follow the steps below.
1. Pick the Right Game For You
There is a whole universe of DeFi games for you to explore. If you are getting started right away, it is easy to be overwhelmed with so many choices. So, the first thing to do when picking the game you are going to play is narrow down to one or two that fit your interest and skill level.
Some games demand low reaction times due to fast gameplay, while others are more strategic and slow.
Some are best-played solo and others can be played with a team.
Whatever game you choose, always qualify games for their legitimacy by researching the game's team and their credentials.
Doing proper research before you start playing any game will ensure that you don’t fall for scams and rug pulls.
2. Ability to Swap In-game Assets for Cash
The success of your DeFi game experience also depends on how easy it is to enter and exit the game. Being able to cash out quickly when you need money is paramount, particularly in a volatile environment like crypto.
Always ensure that the depositing and withdrawal process will be quick and hassle-free before investing your money in the game.
For example, you might not be able to liquidate your funds quickly if you have staked them in the game because most games have a specific unstaking period.
3. Scrutinize the Tokenomics
The in-game token is the driving force for most DeFi games. Closely examine the game's token economics before investing in it. This will help you understand how your investments are being used and if there is any potential for future profits.
Things to look out for when studying the game's tokenomics include:
- Total supply of the token
- Fully diluted value
- Trading volume
- Inflation rate
- Rewards for staking and playing
- Transaction fees
Also, take a close look at how the tokens have been allocated during the launch.
If a large fraction of the tokens remain with the game creators or are distributed only among a handful of wallets, there is a greater chance of price manipulation.
Playing DeFi games can be a fun and rewarding experience if done with caution.
Before you start, always do your research and make sure that the game is legitimate.
Additionally, consider the risk-reward ratio of the game and invest only what you can afford to lose.