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 able to play Axie Infinity, one is required to have three Axies, which can amount to more than $1,000, depending on market demand.
Another example is Decentraland, a 3D browser-based game where users can buy virtual land plots using the Ethereum-supported MANA crypto. Launched in February 2020, Decentraland allows players to develop their plots using the game’s in-house editor or by importing models. Gamers can earn t-shirts, hats, or cosmetic gears, which they can trade on the marketplace.
Also part of the NFT metaverse is Aliens World, a game spread across seven planets where players participate to earn the Trilium (TLM) crypto. Earnings are made either by sending spaceships to compete or by mining TLM. For the former, the winning players will split the prize pool, with each traveler allowed to get five NFTs after every completed mission. Players can also rival each other on the Binance Smart Chain blockchain when exploring the planets.
To take part in these games, a player must have a crypto wallet where they will store their earnings and NFTs. The wallet should match what the game is based on. For example, Decentraland and Axie Infinity require Ethereum-based wallets.
There are play-to-earn games that do not require upfront costs like Gods Unchained, Guild of Guardians, Chianmonsters, Splinterlands, and Coin Hunt World, among others. But while you won’t be required to fork out money, it does not mean that they are risk-free. Some games are dependent on a random number generator, an algorithm that decides events randomly during a game, such as when you stumble upon a unique item. There are also cases when a game uses pay-to-win mechanics, which can restrict access to premium assets behind a paywall.
The play-to-earn model using blockchain is an emerging platform that is revolutionizing the gaming industry. Propelled by the changing lifestyle during the pandemic, it continues to attract people into the market because it allows them to earn while being entertained.
Games using this model let players own virtual items, sell or trade them whenever they want, and earn fiat currency out of them. While it carries risks, this market is expected to unlock more potential in the future and even topple traditional gaming.
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