Gamefi (a conjunction of the words game and finance), is the most popular term used when talking about video games on the Blockchain. The idea of making money playing video games is not new, the first tournaments date back to the 70's, with DOTA 2 having distributed over 230 million dollars in prizes. Over the years, the market has expanded to other services such as selling accounts or boosting other people's ones (when you play with someone else's account to increase their level/ranking), or there are even alternatives where the existing in-game currency can be exchanged for fiat money.

Starting with a financial approach, Crypto Games brings with it new ways of earning money with video games, thus creating a new genre of P2E (Play to Earn), and several others that do not involve playing but investing in the game. Let's go into detail.

The most important thing when talking about gamefi are the tokens, since it is this tool that allows one to take the role of investor in the games, as well as sets the way in which a gamer can earn money by playing videogames.

The best example of a developed crypto-game, both for the versatility in its assets and the volume they have (in money and in number of users), is Axie Infinity, from the company Sky Mavis. I will not dwell too much on the game itself, because what is our object of study is the economics involved in the game. It is important to highlight the difference between two types of tokens (In the Ethereum network, erc20 are fungible tokens, and erc721 are non-fungible tokens) as well as the difference between tokens (erc20) and coins (native currencies of a Blockchain), but that difference will be discussed on another opportunity. In addition to the Axie Infinity game, the company developed other tools related to the Blockchain, and these are:

• I) A Marketplace. That is, an ecosystem where you can buy or sell NFTS, although you can use other known platforms (nothing forbids selling your axies through Opensea), most of them use Axie's native Marketplace. Axies, lands, and other objects can be sold.
• II) A Hub. A platform where you can fund and invest in video games in production or in the funding stage. It is not yet operational.
• III) A Sidechain on the ethereum network. Ronin, with its free fee for the moment, is soon going to have its own currency (RON) to function. As of today, it is a free way to transfer axies, land or other nfts in the ecosystem without paying gas. This has its own wallet.
• IV) A decentralized exchange. Within the Ronin ecosystem is Katana, which is a platform where we can sell existing tokens inside that sidechain network or provide liquidity (tokens accepted at the moment, ETH, XVS, SLP, USDC and soon its own token, RON).
• V) A bridge. You can already use the bridge to transfer tokens between the Ethereum Mainnet and the Ronin Network sidechain.

Tokenomics of Crypto games:

As mentioned earlier, there are several new and innovative ways by which we, in both our role as a player and as an investor, can dedicate time or money to these projects and in return receive financial compensation. I will continue using Axie's game as an example, only because I consider that it covers -at present and potentially- the main mechanisms of tokenization.

• I) Playable NFTs. They fulfill the role of being a unique and distinguishable asset from others, and in this case, with playable properties. The AXIES, are the necessary elements to be able to access the Axie Inifinity game. You will need at least 3 to build a team, and each Axie has its own unique elements that can be accessed through their metadata (the type, what properties they have, their stats, what cards they hold). Axies can breed to have offspring, who will have their types, stats and properties directly related to the two parent, in accordance with simple genetics laws.
• II) Non-playable NFTs. In this case, we can also buy LANDS and other objects that for the moment do not have any playable function. The Axie ecosystem has its own digital world with limited land plots, which for the moment there is no way to access (there was a prototype game, project L, in late 2020 where we could access those lands and equip them with items that we built with wood/stone that we could get by playing the game).There is also another type of non-playable nfts, which are decorative items that would go on properties (a bed, a lamp, a piece of furniture or a sculpture, whatever you create, it's all decorative. ). A common example in other videogames could be the skin of a character or a specific team; except that the user is the owner of the object, but that is a different element of tokenization that we will discuss later.
• III) Governance token. XVS is the Axie Infinity governance token. The token, in principle, would give governance rights over the game, although to my knowledge it has not yet been implemented. In another hypothetical case, it is the token that would allow users to create in-game proposals or votes on the direction of the game. It could be about implementing new mechanics, creating new characters, having a say in the development of the game's Meta, or even having a say in what changes they want to see in a new patch. It is also the most direct way to invest directly in the game. In short, a governance token would allow the token holder to create proposals and vote on the future of the game.
• IV) Utility tokens. Here enters the SLP, which is the token that allows two axies to produce offspring. Within the mechanics of a video game, these tokens allow access to certain benefits or unlock features that could not be obtained without them. Generally, these tokens can be earned by playing the video game, although it is not necessary, as it does not have to replace the in-game currency used. The examples that can be made about this utility are many, since in principle they could be the direct substitute to the "payment currency" of many already existing videogames, that sometimes have a double currency system, the in-game one that is used for the purchases/sales of the products and services of the game, and another "premium" one that is the one that allows us to access to the advantages of the game or the acquisition of skins.
• V) Native currency. Sky Mavis released its own Sidechain, and transactions in this network are going to be made through its own native currency, $RON, which has not yet been released, but liquidity can be provided within its platform to pre-farm the token. It is something like the Ether needed for Ethereum transactions or the BTC we pay as a transaction fee on the Bitcoin network. Current networks often have problems of time and money needed for fees, and no gamer is going to pay dozens of dollars or wait for several minutes for a transaction to be made, so Sky Mavis is has developed their own exclusive Blockchain so they can play crypto games. Ronin is not the only one, as others were created before (Enjin and Wax are the two biggest ones I can think of), but Ronin fits me in Axie's examples, not to say they have a better.. tempo.

Immutability and impossibility of censorship: All that glitters is not gold, and not everything cryptocurrency is money. Any cypherpunk will tell you wonders about decentralization, a system without trust or the mathematics behind the Blockchain -probably because they already have the money to live without working-, but it is true that as a person who spent years of his life inside all kinds of video games, never earning a penny playing was never a problem for me. Who has never had an account suspended? Whether it was deserved or not. And that really hurts. We lost hours of our life in a game that simply by the decision of somebody, we can no longer access. We lose characters, items, lands, virtual money, guilds, reputation, absolutely everything with a single button. While Blockchain games will maintain the ability to ban (and yes, if you're being toxic you deserve it), what they won't have access to is your property; your tokens. Those will be yours, and if you get banned (or even if you got bored of the game and moved on to something else), you will be the unrestricted owner of those objects, being able to dispose of them as you wish, giving them away to a friend who keeps playing or selling them in a marketplace - decentralized or not, you could sell them literally anywhere that operates in that same network-. There is nothing stopping you from creating your own marketplace or an ad hoc smart contract.
Immutable means that once you deploy something, it can't be changed. So, for example, if you have a character from a game, maybe it has characteristics that can be changed (for example, a weapon nerfed or an ability buffed), but maybe the properties of the character are already bounded by the contract it was created with, and can therefore never be changed in the future (in our Axie example, the properties of the character are immutable, but the effects of the cards used in the game can be constantly modified at the developer's discretion).