If you search for the definition of blockchain games on Google, Wikipedia will tell you that blockchain games (also known as NFT games) are electronic games based on blockchain technology; and according to data from the Dapp analysis website DappRadar, the total number of players of the top ten blockchain games currently exceeds 1 million, and the in-game assets exceed 2 billion US dollars. These games also use NFTs without exception.

In fact, in the early days of blockchain game development, games and NFTs were not inseparable. For example, Satoshi Dice, the earliest blockchain game that appeared in 2012, did not even have the concept of NFT at that time. Even in 2018 when NFTs had already appeared and EOS chain games were popular, there were almost no projects using NFTs as in-game assets. But why do blockchain games seem to be increasingly dependent on NFTs as they have developed to this day?

This is because at the time these games simply tokenized the in-game currency, while the real game assets, such as characters, skins, props, etc., were still in the form of centralized custody. That is, the "core assets" of these games were still in the hands of the developers, and users could not truly own them. Once the user left the game, these assets became worthless.

For example, if you create a top-quality weapon in the game, this weapon can allow you to get more game rewards than others every day, but once one day you don’t have time to play, you will find that you cannot trade it (unless the project party opens a secondary market), which makes an originally valuable item useless.

But if this item is made into NFT, even if there is no official trading market, you can easily transfer this item through your wallet, whether it is given to friends who play with you or other players who are interested in buying it, so that this item continues to play its value, and you may also get a return from it.

These are the two most important changes that NFT brings to gaming assets: ownership and liquidity.

Like traditional games, players in blockchain games also have assets such as avatars, skins, houses, weapons, tools, etc. The difference is that the assets in blockchain games are issued or created in the form of NFTs. NFTs allow games to separate assets from games and activate the liquidity of assets in games. NFTs use encryption to confirm ownership and realize the true privatization of game props, which are truly owned by players, and then on this basis, game assets can be traded freely.

In traditional games, players generally purchase game assets such as equipment, currency, or customized characters through official trading platforms. Private secondary transactions are restricted, and the funds that players recharge for the game ultimately go to the game company.

With the addition of NFT, asset circulation becomes more convenient, providing the possibility for the combination of games and finance, and giving birth to a new financial paradigm - GameFi.

GameFi is a fusion of the words Game and Finance. It refers to blockchain games that provide economic incentives for players. Players can obtain game rewards by completing tasks or passing levels. These rewards are transferred to cryptocurrency exchanges and NFT markets outside the game for trading.

The emergence of GameFi has changed the way game profits are distributed. Players have changed from Pay to Play to Play to Earn. In the past, players paid for games in the game, and the game company took all the profits, and the players did not get any financial returns. But now players can get a "piece" of the game profits by playing games (the specific details also depend on the economic model design of the project). This is brought about by changes in game asset ownership and liquidity.

In addition to free trading, unlike traditional game props that can only be used in fixed games, NFT-based game props can be used across platforms. In other words, your props in game A can be applied to game B through some form of conversion. This reflects two other important features of NFT - composability and openness, which can bring players a completely different experience from traditional games.

If blockchain games want to reach a wider audience, they must ensure that the ownership of in-game assets belongs to users while maintaining the first element of the game - playability, so that they can show their advantages in the competition with traditional games and attract more users from Web2. In the game, NFT is obviously a better value carrier than FT, because FT can only represent currency. If it is simply tokenized, the blockchain game is just a plate covered with blockchain; while NFT can represent the assets of the playable part of the game (characters, props, skins, etc.), making the blockchain game more diversified and interesting, so the future of blockchain games must be inseparable from NFT.