What Is Play To Earn Crypto? How Play To Earn Empowers Brands And Gamers Alike
The blockchain revolution started with Bitcoin, took a bad turn with the ICO Boom of 2017, gained sanity with stuff like Decentralized Finance (DeFi) and matured enough to attract millions of people to it. The next mini-revolution is being driven by crypto gaming, with its highly lucrative play-to-earn model, also called GameFi, a combination of DeFi and gaming. So what is play to earn crypto games? Let us take a look.
The revolution we all wanted
Gaming is big business. Statistics suggest that the global gaming industry is slated to reach almost $270 billion by the end of 2025. But while traditional gaming has been controlled by the corporations that make these addictive games, a new kind of quiet revolution is giving back control into the hands of the people that matter the most — the gamers.
With regular gaming, you are only getting a conduit to escape the real world for a few precious moments of enjoyment. But with blockchain games, you get the ability to earn real money.
While purists may find that adding commerce to gaming is a distraction and works against the philosophy of playing as a means of escaping into a virtual world from the stress of the real one, the majority of gamers, both new and old, are thrilled at the idea of being able to earn tangible rewards while enjoying the gaming experience.
Play to earn crypto games: the what, the how and the why
Play to earn crypto games are just that — games that you play and be rewarded in real money. Let’s break it down.
In play to earn crypto games, you enter the gaming platform and buy a character to start playing. These characters have certain attributes depending upon the game storyline. If it’s an interplanetary war adventure game, the character may be an intergalactic fighter with certain powers, abilities, and weapons. As you embark on your quest, you will enter into fights, missions, etc. With each small win, you will be able to earn some crypto tokens. You can store these tokens in a cryptocurrency wallet, and then cash them out later. Or you can use these tokens to unlock more abilities for your characters by buying game assets, or attributes, to make your character stronger and give it a better chance to win in a battle or complete a mission successfully.
NFT technology, which provides cryptographically-attested uniqueness on any digital asset, be it art, music, or any IP, is helping create tangible value to in-game objects, like parcels of land and character qualities — skins, arms, power, abilities, and other game items. These NFTs, or non-fungible tokens, can not only be sold inside the gaming ecosystem but on third-party NFT marketplaces as well.
This means that when you buy attributes for your character (which in itself are NFTs), you are creating a novel character with skins of your choice, along with a rare mix of abilities, powers, and weapons. This character is now an NFT in itself and can be sold to other players within the gaming ecosystem or on secondary marketplaces.
So what’s the earning potential of these games, you may ask?
It might not be enough for you to leave your day job, but many players do make a decent amount of money. This is true, especially for gamers living in developing regions where the value of the U.S. dollar is more than the local currency. For example, there have been instances wherein some gamers in countries like the Philippines have bought homes by playing such games full-time.
Even if you aren’t in this group, you can still expect to make some money as you get better at playing the game.
What games can you play to earn crypto?
The GameFi space is heating up with the introduction of tens of new games, each vying for a piece of the pie. Each game developer team is trying to bring something novel and exciting to their platform’s game mechanics and storylines to attract the attention of the crypto and gaming community.
However, the game that started this roll is undoubtedly still extremely popular. Axie Infinity revolves around characters called Axies that players can raise, collect, breed and fight against each other. There are various attributes, or body parts, that you can collect and arm your Axies with. They are categorized depending on their rarity factor.
Each Axie is essentially an NFT with its own unique attributes. Gamers can upgrade their Axies by adding new attributes and also trade them for cryptocurrency.
There are two tokens on the Axie platform. AXS (Axie Infinity Shards) is the native token of the network. It is a governance token and holders can use it for staking and participate in deciding how the ecosystem works. SLP, or Smooth Love Potion, tokens are ERC-20 tokens and are earned by gamers when they play and win. SLP is the platform token, or game currency, and all transactions on the platform happen through this token — breed new Axies, trade Axies, etc.
Similarly, there are many different games that are gaining in popularity. Among them are Battle of Guardians, Decentraland, The Sandbox, MetaWars, DeFi Kingdoms, among others.
Pros and cons of play to earn gaming
While the concept may sound enticing, there are some aspects you should be mindful of while jumping headlong into the crypto gaming universe. Let’s take a look at the good and not-so-good things.
- It’s fun to play
Of course it is! That’s the idea, isn’t it? Video games have always been entertaining. The most popular crypto games developed today are very meticulously made, with realistic and immersive ecosystems that can keep you engaged for hours on end.
- The concept is new and exciting
Gaming might be old, but the concept of earning money while you have fun is new and very exciting. In a way, current gamers are like pioneers of what could become a standard model for developing games.
- Starting costs may be involved
Not all games are free to get started. Axie Infinity, the most popular play to earn game, requires you to shell out a few hundred dollars to buy three characters, or “Axies,” to get started. The Axie platform also takes a commission of 4.25% if you sell your Axies to another player.
- Volatility may play spoilsport
Because the marketcap of game tokens is low, there is a greater chance of wild swings in prices. This volatility may wipe out any potential profits you may wish to cash out.
- You need to learn
Not just to play the game but to interact with the crypto ecosystem. If you wish to convert your game tokens for popular cryptos like bitcoin, ethereum or USDT, you need to know how to create a crypto wallet, how to operate it, how to transfer NFTs outside the game ecosystem, and so on.
Win-win for all?
The democratization of gaming with the introduction of GameFi is creating a win-win for game companies and gamers alike. GameFi is maturing with each passing day with the introduction of more, better games that are offering even bigger rewards for gamers.
Again, take, for example, Axie Infinity. Its amazing community has made it a recognizable brand that is creating tangible changes in people’s lives. The game company, Sky Mavis, has attracted millions of dollars in funding from some of the biggest funders. It gets its revenue from transaction fees, the appreciation from its platform tokens, and from the sale of Axies for gamers to get started. The reward potential for gamers has already been discussed.
Decentraland has been in the news recently for selling virtual plots of lands to reputed brands like Atari, Samsung, Adidas and PricewaterhouseCoopers (PwC), among others.
With the introduction of the concept of the metaverse, a virtual world that offers limitless opportunities for meeting, selling, interacting, live events, and so on, brands are being empowered to dissolve geographical boundaries to come a step closer to their customers. Regular customers are making money flipping plots, among others.
All of this creates an exciting new ecosystem that is beneficial to every stakeholder.
Play to earn is a concept whose time has come. With the innovations seen in this field in 2021, this year can only get better as even more exciting innovations hit the market. Brands are using gaming and metaverse platforms to attract their customers outside their traditional touchpoints, whereas regular people are getting tangible benefits from playing and getting entertained.
As play to earn crypto games realize the power they wield, it also gives them the opportunity to do more. Polker, a blockchain-based poker game has used the power of giving to empower causes that need recognition and financial help. The Ol Pejeta Conservancy recently received a donation from Polker, much to the delight of one of the world’s largest rhino sanctuaries.
Crypto charity is still a new concept and many projects are empowering givers by connecting them with the right causes. The Milk and Butter tokens are a step in this direction. It is using gamified charitable giving with DeFi tokens where the giver also earns rewards and a portion of the transaction fees goes to various charities.
The blockchain technology has the power to touch every aspect of human lives. Who would have thought that it can create a parallel financial system through DeFi, empower players to earn money through GameFi, and help give to charities through a more transparent manner, among others? It is helping create a truly democratic and inclusive ecosystem that is touching the lives of the lowest common denominator.