NFT-powered play-to-earn games like Axie Infinity are revolutionising the gaming world. But what exactly are play-to-earn games, and how do they work?
What are play-to-earn games?
Put simply, play-to-earn games are games that utilize blockchain technologies like NFTs to enable players to receive rewards that have real-world value.
In blockchain-based games, NFTs also enable players to own unique in-game items such as wearables and plots of land.
What are NFTs?
NFTs or non-fungible tokens are unique digital tokens that represent ownership of digital and real-life items such as art and images.
Fungible simply refers to an item that can be replaced by another identical item. Physical money and cryptocurrencies are fungible. One GBP can be traded for another one GBP, and one BTC can be traded for another one BTC.
NFTs are different. Each NFT has a unique digital signature which makes it impossible for NFTs to be interchanged with one another. NFTs are, therefore, non-fungible. Think of individual artworks created by the same artist that cannot be swapped or interchanged, as each is unique.
NFTs are tokens hosted on a blockchain, usually the Ethereum blockchain. Their authenticity is recorded on the blockchain and can be publicly checked. This is useful for collectable items, designer goods, artwork, and in-game items.
Why are NFTs valuable?
The proof of ownership and authenticity, as well as the scarcity of an NFT, makes it valuable.
Once a player owns the in-game item NFT, they can freely sell it outside the game it was created. This means NFTs representing in-game items can be traded on any NFT marketplace for crypto or fiat currency. And thanks to their scarcity, they have real-world value.
In this way, blockchain gaming enables players to earn real money.
The biggest play-to-earn game right now is Axie Infinity, a Pokemon-style game created by Mavis Studios. Axies are cute, collectable virtual creatures. Each Axie is a non-fungible token or NFT, and are defined according to their class, stats and body parts. Players earn crypto by breeding and battling their Axies.
The game currently has a trading volume of $3,107,988,508 (as of January 31, 2022).
By battling their Axies and completing daily tasks, players can earn Small Love Potions (SLPs). SLPs are tokens that can be exchanged for other crypto tokens or fiat money.
Some of the best players on Axie Infinity are also rewarded with AXS tokens (an ERC-20 utility token). AXS is the governance token for the Axie Universe. AXS token holders can earn further rewards by staking these tokens or taking part in governance votes. It’s also possible to acquire AXS by swapping other tokens, like SLPs, on exchanges such as Katana.
Players can also earn income by breeding their Axies. Axies can be paired together to create new offspring. Players can then choose to battle with these offspring, sell them on the Axie marketplace, or use them to breed more offspring.
The breeding process can get quite technical, and is generally recommended for more experienced players who’ve completed their own research on the topic. To find out how to start playing Axie Infinity, go to our dedicated tutorial.
Upcoming play-to-earn games
In its December roadmap, the BAYC (Bored Ape Yacht Club) announced that it is working with Animoca Brands to release a play-to-earn game.
Developed by Yuga Labs, the Bored Ape Yacht Club (BAYC) is a series of NFT profile pictures depicting disinterested-looking apes with randomly generated traits. The collection of 10,000 NFTs was launched in April. They are minted on the Ethereum blockchain and individual Bored Apes have sold for millions apiece.
Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.