Play-to-earn games are the new big hype in crypto, creating enormous opportunities for the games and individuals. While gaming is becoming a fantastic career option, people are belligerently moving towards P2E gaming. Traditional gaming was only for entertainment purposes, and now GameFi and Metaverse games are taking over with the ability to help people earn vast sums of money while playing games. Giving players financial incentives to play and progress through games is this idea. This has enabled gamers to earn a full-time income in some cases.
How Play-to-Earn Gaming Works?
In these games, every object is represented by NFTs, digital tokens used to prove ownership of rare intangible items. Plots of land, avatars, costumes, weapons, and gold bars are all examples. Many players can sell these items in exchange for cryptocurrency or trade them with other players in digital marketplaces for other NFTs once they have acquired them through gameplay.
Users can increase their earning potential by competing in tournaments, dedicating time to leveling up and improving their characters, and creating monetized structures on their land that other gamers pay to use, depending on the game being played. All NFTs and cryptocurrency transaction data are stored on a public blockchain to keep track of what each player owns. A global computer network manages this type of distributed digital record-keeping technology. There are several advantages to using this technology in gaming, including the following:
- In-game items can easily be proven owned by players. Players will no longer be at risk of losing track of what they own if the underlying gaming company experiences technical issues because there is no single point of failure. It is not possible to counterfeit, remove, or destroy items acquired during gameplay. Game-native cryptocurrencies can be sent and received without a clearinghouse, custody, or settlement service.
- Staking, which allows players to save tokens from earning annual interest and other rewards that they can use to purchase additional in-game items or unlock new content, is another DeFi feature found in some games.
What do you need to do to participate?
The subsequent crucial factor facilitating GameFi’s expansion was the proliferation of decentralized finance (DeFi) platforms throughout 2020. These DeFi platforms introduced a variety of blockchain-based financial platforms that are entirely operated by smart contracts. In addition to additional features like lending and staking, this provided the infrastructure for decentralized exchanges from which in-game cryptocurrencies could be launched and traded. GameFi applications quickly began to form as he realized the numerous advantages DeFi and NFTs could offer the online gaming industry. One of the first play-to-earn games to take off was Axie Infinity, which made more than $1 billion in revenue on August 9, 2021.
Users will need to do the following to participate in any of these play-to-earn games:
- Make a wallet for cryptocurrencies: To enable in-game transactions and store virtual currency and NFTs. The game’s blockchain will determine the type of wallet you need. MetaMask, a crypto wallet service based on Ethereum, can be used with any GameFi game built on Ethereum.
- Buy things to start: Downloading all GameFi games is free. However, many games require players to purchase characters, native crypto tokens, decks of cards, or upgrades.
- Pre-financed crypto wallet: You should pre-store your wallet with specific digital money to buy starter things and continue. For instance, in Cryptoblades, players must download MetaMask, acquire Binance coin (BNB), and then exchange BNB for SKILL, the game’s native cryptocurrency.
History of Play-to-Earn Games
GameFi and the emergence of the NFT phenomenon CryptoKitties are the results of a combination of factors that began in 2017. The computerized collectibles economy demonstrated a viral achievement, with CryptoKitties gathering more than 14,914 clients daily at its pinnacle. Similar success was enjoyed by CryptoPunks, a collection of 10,000 pixelated NFT characters built on Ethereum that sold more than $1 billion in 2018.
Sadly, the success of these NFTs demonstrated both the positive and negative aspects of the current state of blockchain technology. The Ethereum network became highly congested due to games like CryptoKitties, resulting in extremely high spikes in transaction fees and confirmation times for transactions that were significantly longer than average. These technical issues made it clear that there needed to be more in the market for more effective and scalable platforms that could handle the growing demand from virtual asset collectors and online gamers.
Since then, several brand-new “Ethereum killer” blockchains with promises of faster transaction speeds, increased scalability, and lower fees have emerged. These include Solana and Cardano, which have recently reached new all-time highs as investors bet big on new Dapp rivals.
Future of GameFi
GameFi has already gained much traction, and the top games’ combined market capitalization has crossed $14 billion. The founder of Tron, Justin Sun, recently stated that he believes this new sector will be crucial to increasing cryptocurrency adoption. However, key opinion leaders in the crypto industry believe there is much more ahead for this new sector.