This is a contributor content by Alexander ShelyutsinCo-founder of the GameFi project ZombieTrain.
What is GameFi?
GameFi is a special combination of two worlds: gaming and finance. It mixes entertainment with financial rewards in a very innovative way. Gone are the days when players just grind to get to a new level to earn some points or trophies; players earn real-life assets—in cryptocurrency, NFT, or other valuable rewards—in this new digital landscape.
This is a transformative change: what used to only unlock in-game achievements now unlocks real and tangible benefits off-screen, making time spent playing directly valuable. GameFi became synonymous with gaming that pays, and this concept began to grow at an impressive rate. More players are flocking to these platforms not just for fun but to build wealth through their gaming skills.
GameFi will only become more unique when the technology in both blockchain and cryptocurrency fully matures.
How Telegram Games Are Leading the Charge
Telegram, a platform traditionally known for messaging, has now emerged as an unlikely hub for GameFi projects, ushering in a new era of user interaction and entertainment. A growing number of games like Hamster Combat, Catizen, Notcoin, Dogs, and Gatto leverage Telegram’s massive user base and seamless communication features to build dynamic, immersive GameFi experiences.
Such games, with integrated gameplay and real-world earning opportunities, have gained immense appeal. In fact, some of these games have attracted tens of millions of players from around the world.
While playing games on Telegram has a social layer of chatting that enhances gameplay by fostering communities, instant updates, challenges, and rewards are possible. It’s not just about playing the game itself; instead, it involves connecting with your fellow players, developing strategies, and, of course, gaining tangible rewards along the way. This seamless integration of chat and gaming makes Telegram the perfect home for the growing GameFi movement, with a scaling ecosystem in both user numbers and engagement.
How Are Rewards Distributed?
Distribution of rewards has always been one of the main challenges in GameFi. Most GameFi projects in the past have been cursed by unsustainable reward systems, similar to Ponzi schemes where rewards can only be paid out as new players continue to enter the ecosystem. It eventually collapsed as player growth slowed and the system became unsustainable. So, the big question is, how do GameFi projects distribute rewards honestly and sustainably for the long term without falling into the trap of unsustainable models?
Situation: An engaged player spends 8 hours daily playing 20 days per month. Even with maximum ad revenue and incentives, his reward comes out to $80 a month. While this may be significant in some regions, the actual cost of delivering these ads and incentives to such dedicated players will actually lower their overall payout. Even in places where $80 makes sense, the ad-driven model fails to provide a truly sustainable or rewarding experience for the player and the platform. This is where innovative approaches to reward distribution began.
What are the Solutions?
- Player Category
Not all players have the same goals or expectations when they enter GameFi. Some are there for fun, while others are just out of interest and the lure of money to be made there. We generally recognize two main types of players within the GameFi ecosystem:
- Players who are primarily happy are motivated more by the fun and excitement they get from playing. While rewards are a welcome positive addition, they are far from the primary motivation in themselves.
- Earners are more financially minded when it comes to games. They are hard-core grinders who play the game to earn money and like the reward of their hard work.
By recognizing these differences, GameFi projects can tailor their reward structures to better serve both groups. For example, it can focus rewards programs on top earners to incentivize serious players without losing fun and entertainment values for casual players. This allows for a balance that maintains both high engagement and sustainable growth.
- Controllable Payouts
Giving players control over when and how they redeem their rewards can be a great tool for stabilizing the game’s economy. This approach will allow the project to apply market pressure to the tokens in circulation. While many systems enforce withdrawal limits, they often fail to address the larger issue of token supply and demand balance. What if we took a more controlled, systematic approach to payouts?
Instead of allowing continuous withdrawals, the project may come with monthly or quarterly payouts. This will have two immediate benefits:
- Predictable Supply: Limiting the frequency of payouts will allow the project to manage the token supply more effectively by buying back tokens as needed to maintain price stability.
- Psychological Strengthening: In fact, players will appreciate large, lump-sum payouts more. These may be more beneficial to them than many small, frequent payouts. Large payouts can have a significant psychological effect, giving the player a sense of achievement and satisfaction that keeps them investing.
- Smart Long-Term Tokenomics
The very foundation of any successful GameFi project is sustainable tokenomics. It’s not just about distribution strategy or how much is allocated for in-game rewards; rather, it is a general strategy involving the total supply of tokens, buyouts, burns, and governance mechanisms. With a well-structured approach to token distribution and management, a GameFi project can build a long-term, thriving ecosystem that attracts both loyal players and strategic investors.
Good Tokenomics:
- Axie Infinity: A two-token model—while SLP is used to reward internal participants, AXS, on its side, works for governance purposes. The Axie Infinity breeding token burn mechanics are really good at balancing supply with demand, so good for the in-game economy.
- Katizen: A very interesting reward structure has been achieved that can promote long-term player participation and value retention through well-thought-out in-game utility and sustainable token distribution.
Bad Tokenomics:
Hamster Battle is one of the classical examples of a “hit-and-run” system, whose reward structure is very front-loaded: it is large while attracting early users but is not planned to be sustained in the long run. As interest rates fall, the system’s ability to sustain unsustainably large payments decreases.
While bad tokenomics can create a surge of hype and early growth, they often lead to the inevitable collapse. A strong tokenomics approach that incorporates careful planning, maintenance, and balance will ensure long-term success for both developers and players.
- Token In-Game Utility
For a GameFi project to be successful, there needs to be real utility within the in-game token. When players can easily convert tokens into real-world value or use them in meaningful ways within the game, the ecosystem remains strong and balanced. However, tokens that have no real utility or only serve to increase supply without creating demand are a recipe for failure. Here’s what works—and what doesn’t:
Good Utilities:
- In-game purchases: The token is applied to the purchase of skins, upgrades, boosts, or other premium content. This creates inherent value for the token and incentivizes players to earn and spend it.
- Event participation: If there are events that can only join the game with tokens, that can build hype and create demand.
Partnership perks can be partnering with external brands or services to offer real-world rewards, such as discounts or merchandise, that add value to the token.
Bad Utilities:
- Staking rewards: Staking increases supply without driving demand; this is a vicious cycle where the tokens will depreciate in value over time.
- Liquidity pools: Adding more liquidity without creating intrinsic demand only floods the market with tokens, leading to inflation and devaluation.
- Rule of Thumb: A utility should add value to the player or the ecosystem. If a utility simply increases supply without creating demand, it should be reconsidered. Balance is necessary for maintenance.
Final Thoughts
Creating a sustainable GameFi economy is by no means easy—it needs to be properly accounted for through player motivations, token economics, and reward mechanisms. Building a rewarding GameFi environment with focused attention on player categorization, payout structure control, smart tokenomics, and in-game utility will surely ensure players an enjoyable yet profitable experience .
GameFi is huge and moves very fast. As the sector matures, the next wave of projects will move beyond the Ponzi-like models of the past to truly sustainable, rewarding, and profitable ecosystems. Whether grinding Hamster Combat or strategizing your way through Catizen, remember that the GameFi landscape is changing fast—and you’re part of this exciting revolution.
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