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The Play-to-Earn Model in the NFT Metaverse Explained

Blockchain is the latest technology to legitimize e-sports as a lucrative industry. The popularity of e-sports became even more pronounced during the pandemic, when the time spent on playing video games rose 39% as most people cooped up in their homes.

In 2020, the global gaming market reached nearly $173.7 billion and it is projected to cross $300 billion by 2026. At the heart of this trend is Play-to-Earn, a gaming model that takes advantage of the open digital economy where players are rewarded with in-game assets as they play.

How Play-to-Earn Works

Through blockchain technology, the play-to-earn model uses non-fungible tokens (NFTs) and decentralized finance or cryptocurrencies (DeFi) throughout the gameplay. Unlike traditional mobile games where players need to funnel cash into the game itself, play-to-earn rewards the participants simply by taking part in it. These rewards can come in the form of in-game assets such as avatars, costumes, shields, land plots, gold bars, weapons, and other gears.

These items have verifiable proof of ownership that players can trade, buy, or sell. That ownership is made possible by NFT and blockchain technology, which assigns a unique identifier to each item for it to have a variable value.

However, the play-to-earn model is not entirely free. For example, the most popular video game that adopts this model is Axie Infinity, a blockchain-based game developed by Vietnam’s Sky Mavis. This game lets participants collect, breed, raise, and trade digitized NFTs called “Axies.”

Its in-game ecosystem allows players to monetize from it by earning Ethereum-based cryptos called Smooth Love Potion (SLP), which they can exchange for fiat currency. To be a