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GameFi’s Use of Smart Contracts in Gaming

Smart contracts are an integral part of any blockchain project, and GameFi is not an exception. In this article, we will get into details of smart contracts, and their use in gaming in particular. We will also discuss the synergy of gaming and smart contracts, as well as its future.

Before we contextualise smart contracts in GameFi, let us begin with a general description. According to IBM, ‘Smart contracts work by following simple “if/when…then…” statements that are written into code on a blockchain. A network of computers executes the actions when predetermined conditions have been met and verified’. It is a very precise and tight definition of the term, and we couldn’t have said it better. When the conditions set by counterparties are met and actions - executed, a smart contract closes and is stored on the blockchain, meaning that it cannot be deleted or changed in any way.

Actions that can be tied to smart contracts can be incredibly varied, and in combination with simple design, it becomes a very useful tool that projects are built upon. Although smart contracts can be written from scratch, there are many services that provide tools to structure contracts without much coding. Smart contracts create a decentralized and automated environment, and they are widely adopted by blockchain projects, including GameFi.

GameFi benefits greatly from smart contracts. Blockchain gaming combines classic gaming experience with an extensive economic layer. GameFi economy is made out of many chainlinks between developers, gamers, guilds, partners, blockchain providers and more. Between them, there is a constant flow of NFTs, tokens, money and other assets, and automatization increases the speed and security of these transactions. Smart Contracts enable the creation of complex and diverse GameFi mechanics: NFTs and tokens can be easily implemented as gameplay rewards or used in-game with many different implications. Smart contracts protect copyrighted works, which is prevalent in Metaverse, they are used to manage property and asset ownership, they are transparent and stored on blockchain, allowing them to act as proof, and they can be written in such a way to give gamers many opportunities concerning NFT creation or transfer, as well many other great features.

In other words, smart contracts allow GameFi to create much more complex and intertwined gameplay/economic mechanics and systems than in traditional centralized gaming. Even though GameFi is at its origin, we can already see big projects that make the best AAA games look simple. As the industry gets more experience, talent and funding, we will see the full potential of smart contracts realized, which will make GameFi more attractive to crypto opportunists and mass gaming audience. With smart contracts, other GameFi advantages like Play&Earn model, asset ownership and community development will also be spread to the whole gaming industry. We at Clarnium will be happy to guide you on this journey!

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