GameFi (Game Finance) is the combination of blockchain gaming and finance in this crypto space. Tokens and NFT are typically used to power the game's financial aspects (non-fungible tokens).
Gaming Coins / Tokens are typically divided into two types: those associated with in-game currency and those associated with governance. The governance token, on the other hand, usually provides utility within the game while the in-game tokens are used to reward the users.
Typically, NFTs are used to represent game items, characters, land, and digital assets. Players in traditional gaming do not truly own the game assets and cannot trade them in the marketplace. They own NFTs on the blockchain and can sell them in the open market.
GameFi, which is a key aspect of the Play-to-Earn movement, provides gamers with additional economic upside by playing the game. Developers of blockchain-based games can add features that allow users to earn gaming tokens while playing. Tokens can be utilized in-game or sold for other assets such as Bitcoin or even fiat currency.