How GameFi and P2E Are Brewing up a Storm, and Precog Finance’s Role in the Equation

Precog Finance
4 min readJul 18, 2022


How GameFi and P2E Are Brewing up a Storm | Precog Finance

Video gaming is singlehandedly the biggest and most prominent medium in the entertainment industry, worth a staggering $176B in 2021. However, although video gaming has been around for only a few decades, the days of frequent and continuous innovation the industry used to witness seem to be behind us as most of the progress appears to lie predominantly in hardware and graphical capabilities more than anything else.

Blockchain, one could argue, is almost the antithesis of that phenomenon. Starting out as a relatively simple concept, blockchain technology evolved from peer-to-peer money to what is now being referred to as the decentralized web — or Web3. Decentralized finance, art, digital identities, metaverses… etc, are just some of the various blockchain-based innovations constantly being expanded and improved upon, but one in particular stands out lately.

It is called GameFi, and here’s what you need to know about it.

GameFi (short for Game Finance), also referred to as Play-to-Earn (P2E), is a new and emerging genre of gaming that leverages blockchain technology to achieve various goals that would otherwise be difficult or impossible via traditional gaming models. The blockchain in and of itself is a versatile tool applicable in a vast array of industries, and since video gaming has long been entirely digital by nature, this could explain the rapid rise of GameFi and its almost seamless integration with video games.

Why a studio would utilize the blockchain for their video game may depend on various factors, including the type of game, the target audience, the aim of the developers, and so on. This may include, for example, setting up a DAO to let the community vote on the changes they’d like to introduce to the game.

One of the most compelling advantages of integrating blockchain technology in games is the ability to utilize NFTs to represent in-game assets and features such as heroes and other characters, goods, skills and abilities, virtual land, etc. This not only gives players better security and verifiable ownership but also realizes other valuable possibilities such as verifiable provenance, rarity, and free trade.

It is a promising space, to say the least, but don’t take our word for it…

Millions of dollars have been pouring into such projects since the genre took off. Take a look at how Moralis, a Web3 development platform that helps developers build dApps and GameFi projects, which raised $40M in a funding round back in May. What developers need today more than ever is the infrastructure that could support their ideas, and projects like Moralis may provide an important step forward.

On the other hand, Branch, a startup building social games for Web3, managed to raise $12.5M in a seed round to build a new P2E game. It is set to be a combination of Minecraft and Animal Crossing, the former of which is the best-selling game of all time. Both games are known for offering countless possibilities for players to explore vast digital lands and express themselves with a myriad of in-game items, fitting perfectly into the theme of freedom and user-empowerment that Web3 offers.

Nyan Heroes is building a AAA, P2E third-person shooter on the Solana blockchain, and secured a $7.5M strategic investment to expand their team and scale the game development process. The game plays as a battle royale, one of the most popular genres of video games today, and features various classes, weapons, and customizations.

Precog Finance’s role in Play-to-Earn games and economies.

One might wonder what a project like Precog Finance would have to do with GameFi. In order to understand the role it can play within these ecosystems, we need to take a step back and examine what P2E games are and how they function.

Play-to-Earn games, as the name implies, reward their players for their time and effort spent in the game. Although the idea is quite novel and refreshing, in reality, P2E games often struggle to sustain their token economics (tokenomics) since they rely on continuous growth and reinvestment from their player base. If their tokenomics model is not properly planned and implemented, the selling pressure on the reward token may bring the project to its knees, effectively crashing the whole in-game economy and the associated token(s) value including their non-fungible tokens (NFTs).

Precog Finance can provide the tools needed to support these reward tokens and help them maintain their value in the game, as well as to help manage tokenomics and stabilize volatility. Not only that, but it could also provide its technology and protocol to the P2E gamers allowing them to interact with dApps like Sentient from within various games and Metaverses. Of course, it should be noted that no such gateways and integrations have been built yet, but are nonetheless areas that are rife with such possibilities.

Johnathan King, Precog Finance’s CMO, commented “I believe that with our suite of products, we will be able to support P2E game titles and the funds that are invested in them; possibly developing gaming-specific trading strategies and exploring partnerships with upcoming brands”.

The beauty of Web3 is how each and every dApp can be interconnected; the openness, decentralization, and permissionlessness that radiates in this space are not to be underestimated or overlooked. Akin to the fertility of the soils that feed humanity — comprised of countless organisms of various sizes that work together to break down organic matter and give life anew — Web3.0 is to gaming the very ground is to plant life.

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