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What are play-to-earn crypto games?

Summary of play-to-earn gaming

Play-to-earn is a type of video game that rewards players for their in-game achievements with assets that have real-world monetary value.

The financial services sector isn't the only area that blockchain technology has impacted. Its key characteristics of decentralization and immutability have also allowed it to revolutionize different aspects of the entertainment industry too.

Play-to-earn (P2E) has emerged in the last few years as one of the hottest new frontiers in online gaming. 

By combining the worlds of cryptocurrencies, non-fungible tokens (NFTs), and decentralized finance (DeFi), play-to-earn crypto games allow players to acquire digital assets that have real-world value in return for their in-game achievements.

For many around the world, the play-to-earn model has shown that video gaming is no longer just an entertaining pastime — it also has the potential to be a revenue-generating activity.

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Why use play-to-earn games?


Play-to-earn gaming is rapidly changing the traditional video game landscape.

Here are some of the reasons why people are getting started with play-to-earn:

  • Earn real rewards - From their in-game accomplishments, play-to-earn gamers can earn cryptocurrency and NFTs that have a real-world value beyond the gam's environment.
  • Take ownership over in-game items - Because items are tracked on decentralized blockchain networks, play-to-earn gamers can take full ownership over the items and assets they earn from gameplay.
  • Participate in strong communities - Play-to-earn gamers regularly network with other community members in online forums, where they share in-game strategies and make personal connections.
  • Develop new economic opportunities - Many are using play-to-earn games to supplement their income and generate new streams of revenue.
  • Have fun - Beyond the financial benefits of playing the game, play-to-earn games offer unique and immersive gaming experiences.

How do play-to-earn crypto games work?


Game designers typically build and launch play-to-earn gaming platforms using Layer 1 blockchain networks, such as Ethereum, Solana, or BNB chain. 

These platforms provide developers with software tools for creating crypto-compatible applications and experiences that run on top of their respective blockchains.

Leveraging these blockchain infrastructures, game studios can tokenize game items and give them unique digital identities. In this way, players can become the rightful owners of these intangible items. Holders can sell this digital ownership to others in the gaming community, trade their items for other NFT-linked assets or even convert the crypto tokens they earn into real life money.

Let’s look at an example using a P2E gamer named Jenna. Jenna is an avid player of Axie Infinity — one of the most popular P2E games around.

During her time playing the game, she has managed to acquire and level up a lot of rare Axies (Axie Infinity’s collectible monsters used to battle others in the game). Each Axie in the game is an NFT. This gives Jenna complete ownership over each of her characters, not the company behind the game, Sky Mavis.

These ownership rights allow Jenna to sell her Axies using the game's in-house marketplace or on the secondary NFT marketplace.

In return, Jenna can earn the game’s native tokens, which have a real-world value. Jenna could convert the tokens she earned from her in-game achievements into a government issued fiat currency using a cryptocurrency platform like Kraken.

In short, the play-to-earn model allows players to earn rewards that have a real world value in return for completing quests, battling enemies, or leveling up characters.

How is play-to-earn different from traditional video games?


The economic model of play-to-earn games is different from popular video games of the past like World of Warcraft or Minecraft. 

Traditionally, video game players had no way to monetize their accomplishments or exchange in-game currencies — gold and Minecoins — for real-world money. 

This means that players’ gaming achievements solely live within a points system or in-game marketplace. However, the play-to-earn business model has revolutionized how video game players can be rewarded.

With play-to-earn games, the native currency of the video game can be bought, sold and traded on platforms outside of the game’s economy. This allows players to exchange their real money for game cryptocurrency and vice versa. Additionally, play-to-earn crypto games allow players to buy and sell different characters, skins, abilities and items on the open market. This has allowed players to have real ownership over their in game items.

Finally, blockchain developers have also created third-party platforms that facilitate the lending and borrowing of popular NFTs from P2E games. These platforms allow players to borrow NFTs in order to take part in the P2E game. You can think of this like renting a bat and glove in order to play a game of baseball.

 This new addition to the sector, where players can borrow and lend P2E game assets, is known as Game Finance or simply "GameFi."

Popular play-to-earn crypto games


Axie infinity

Axie Infinity (AXS) is a blockchain-based game centered around axolotl amphibians. It combines elements of Pokémon and Tamagotchi, allowing players to collect, breed, and battle creatures known as Axies. Players can earn reward tokens called Smooth Love Potions (SLP), by winning battles and completing quests. Players use SLP game tokens to breed their Axies, or exchange them for cryptocurrencies like Ether (ETH) — the native cryptocurrency of the Ethereum blockchain.

The game also boasts its own native multi-utility token called Axie Infinity Shards (AXS). AXS serves as the game's primary payment currency and governance token. The latter provides holders with voting rights over the game's future development. Additionally, players can stake their AXS to earn more AXS. 

If you are interested in learning more about Axie Infinity, you can check out the Kraken Learn Center article What is Axie Infinity?

axsAxie Infinity Shards Price

$6.62
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Change
-5,19%
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7
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7
Aavegotchi

Aavegotchi (GHST) offers a unique blend of NFT collectibles and virtual pets. Each Aavegotchi is a digital creature that is stored as an NFT on the blockchain. These creatures possess traits, wearables, and attributes that impact their gameplay and value. Players can own, trade, and customize their Aavegotchis, making them distinct from other NFT projects.

GHST is the native utility token of the Aavegotchi ecosystem. It holds various functions within the platform, such as serving as a medium of exchange, allowing users to stake and earn rewards, participate in governance decisions, and purchase in-game assets.

aTokens are interest-bearing tokens that represent user deposits within the Aave protocol. These tokens are used to collateralize Aavegotchis, which are unique NFT collectibles.

If you are interested in learning more about Aavegotchi, you can check out the Kraken Learn Center article What is Aavegotchi?

ghstAavegotchi Price

$1.90
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Change
-3,70%
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2
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2
Decentraland

Decentraland (MANA) is a virtual reality platform where users can explore, create, and monetize their digital experiences. Players can buy virtual plots of land, create, and sell unique assets, and even host events.

The platform's native digital currency, MANA, can be earned by participating in the virtual world.

If you are interested in learning more about Decentraland, you can check out the Kraken Learn Center article What is Decentraland?

manaDecentraland Price

$0.41
24H
Change
-5,26%
High
0,44
Low
0,40
Gala Games

Gala Games (GALA) provides a range of games within its gaming ecosystem where players can earn rewards by playing, completing tasks, and building in-game assets. These games include titles like TownStar, Mirandus, and Fortified.

By playing these games, players can earn GALA, the native currency of Gala Games, which can be earned, traded, and used within the Gala Games ecosystem.

If you are interested in learning more about Gala Games, you can check out the Kraken Learn Center article What is Gala Games?

galaGala Games Price

$0.042
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Change
+2,57%
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0,045
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0,040
Yield Guild Games

Yield Guild Games (YGG) is a decentralized autonomous organization (DAO) focused on play-to-earn games. Yield Guild Games invests in various blockchain-based games and shares the earnings with its members. Players can join the guild and earn income by playing supported games, completing tasks, and participating in the in-game economies.

YGG serves as the native governance token of Yield Guild Games. Players use YGG for voting, decision-making, and participating in the guild's activities.

yggYield Guild Games Price

$0.79
24H
Change
-4,50%
High
0,85
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0,78
Merit Circle

Merit Circle (MC) enables gamers to loan in-game assets such as NFTs and essential tokens to new P2E gamers. Known as “scholarships,” these loans help reduce the high barrier to entry often associated with some popular P2E games.

Operating as a decentralized autonomous organization (DAO), Merit Circle places its trust in a governance system fueled by the collective will of its members. To actively participate in shaping the protocol's future development, community members must secure the protocol’s native MC token.

mcMerit Circle Price

$2.48
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Change
-4,13%
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3
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2
My Neighbor Alice

My Neighbor Alice (ALICE) is a multiplayer blockchain game that allows players to build and interact in a virtual world. In the game, players can purchase virtual land, customize properties, engage in social activities with other players, and participate in various in-game events and mini-games. Players can earn rewards by completing tasks and contributing to the game's ecosystem.

ALICE is the native cryptocurrency of My Neighbor Alice. It is an ERC-20 token on the Ethereum blockchain. Players can earn ALICE through gameplay and use it for purchasing assets, participating in the economy, and trading with other players.

aliceMy Neighbor Alice Price

$1.16
24H
Change
-3,70%
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1
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1
The Sandbox

The Sandbox (SAND) is a metaverse world P2E game that empowers players to create, share, and monetize their own interactive experiences. This platform serves as a digital canvas where users can design and build their unique gaming worlds, characters, and gameplay mechanics. 

The platform's native crypto asset, SAND, plays a pivotal role in facilitating transactions, purchases of virtual land, and rewarding creators for their contributions. It establishes a thriving economy within the ecosystem, as players can leverage SAND to buy, sell, and exchange virtual assets, fostering a new era of player-driven content and economic opportunities.

If you are interested in learning more about The Sandbox, you can check out the Kraken Learn Center article What is The Sandbox?

sandThe Sandbox Price

$0.41
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Change
-5,16%
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0,44
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0,40
Star Atlas

Star Atlas (ATLAS) is a massive multiplayer online game set in a blockchain-based virtual universe. It offers a space-themed gaming experience where players can explore the universe, engage in space battles, mine resources, trade assets, and build alliances. The game incorporates play-to-earn mechanics, allowing players to earn rewards for their contributions and achievements.

ATLAS is the native cryptocurrency of Star Atlas, and serves as the in-game currency for trading assets, purchasing items, upgrading ships, and contributing to the game's economy. Star Atlas DAO (POLIS), a secondary token in the game, serves as the platform's governance token.

If you are interested in learning more about Star Atlas, you can check out the Kraken Learn Center article What is Star Atlas?

atlasStar Atlas Price

$0.0048
24H
Change
-1,66%
High
0,0051
Low
0,0047

What is GameFi?


GameFi, short for Game Finance, is a term that refers to the integration of decentralized finance (DeFi) into the P2E gaming industry. 

Combining DeFi services like yield farming, decentralized lending, and governance, GameFi provides additional utility for play-to-earn game users.

For example, third-party NFT rental platforms such as reNFT allow holders of digital items to lend them out to others. Smart contracts automatically construct and execute the lease agreement. Lenders can decide whether borrowers need to put up collateral before borrowing their assets, as well as configure the duration period of the rental agreement.

Aavegotchi is another example of a popular P2E crypto game that incorporates GameFi elements, including allowing players to stake its native governance token, Aavegotchi (GHST).

The game requires players to stake GHST to join the decentralized autonomous organization (DAO) and vote on key changes to the game. This process offloads many of the key decision-making powers to players, giving them greater control over how the experience develops.

If you want to learn more about how exactly this works, you can check out the Kraken Learn Center article What is a governance token?

Finally, many P2E games incorporate crypto staking to help secure the underlying blockchain, and reward those who stake with in-game rewards and newly minted tokens.

Combined, these GameFi elements provide additional revenue-generating opportunities that allow NFT holders to put their tokens to work.

What are the critiques of play-to-earn crypto games?


Some feel that P2E games open the possibility for players to simply pay their way to success. 

Because P2E games often allow players to exchange their real world money for the game's native currency, many in the video game community have voiced their concerns. They feel P2E games allow wealthy players to buy their way to the most prestigious or powerful items in the game without effort, rather than progressing through the game to earn it themselves.

This effect, often referred to as “pay-to-win,” could mean that players buy up the highest performing weapons, characters or items in the game and are able to succeed without developing the skills of more experienced players. 

Game studios are actively working on addressing these concerns. The play-to-earn gaming community is working to ensure the business models of these games reward players while minimizing the risk of pay-to-win players spoiling the fun of the games.

 

How to get started with play-to-earn


For those intrigued by the concept of play-to-earn and want to get started, here are some steps to guide you:

  • Research and choose a game: Explore the wide variety of play-to-earn games and find one that aligns with your interests. Consider factors such as gameplay mechanics, community size, and potential earnings.

  • Set up a crypto wallet: Most play-to-earn games operate on blockchain platforms, so you'll need a compatible crypto wallet to store your earned tokens. Create an account and securely store your wallet's recovery phrase.
  • Acquire the necessary cryptocurrencies: Depending on the game you choose, you may need to obtain specific cryptocurrencies to participate fully. Research the game's requirements and use reputable exchanges to purchase the required tokens.
  • Understand the game mechanics: Familiarize yourself with the game's rules, mechanics, and objectives. Take advantage of tutorials, guides, and community forums to enhance your understanding.
  • Start playing and earning: Dive into the game and start completing quests, battling opponents, or participating in in-game activities to earn rewards. As you accumulate digital assets or cryptocurrencies, you can choose to hold onto them, trade them on specialized platforms, or convert them to fiat currencies (if possible).
  • Connect with the community: Engage with other players, join forums, and participate in social media channels dedicated to the game. Networking with experienced players can provide valuable insights, strategies, and potential partnerships.

Get started in play-to-earn with Kraken


Play-to-earn gaming represents an exciting leap forward, transforming traditional gaming from a mere pastime into a potentially lucrative, crypto-based endeavor.

By harnessing the power of blockchain technology, these play-to-earn games empower players to earn real-world rewards and offer the potential for some to make a living doing what they love. 

Whether you're a seasoned gamer or just starting out, the world of blockchain gaming offers a realm of opportunities waiting to be explored.

Kraken lets you convert your in-game accomplishments into cash, and buy the native tokens of these games as you get started in the space.

Click the button below to get started in the play-to-earn economy with Kraken today!