Play-to-Earn: It’s a game changer in the NFT Marketplace
Artwork, collectibles, and other items may be fueling the Non-Fungible Token craze. But retail traders in the know are looking at another growing use for NFTs: online gaming or “GameFi.” In fact, Game NFT Trading volume recently set a record $1 billion, Daap Radar reports. Trading volume increased 71% in November alone.
“Gaming and gamification are infiltrating the NFT space in full force, challenging the popular — and now almost traditional — perception of NFTs as collectibles by adding utility and layering DeFi mechanics. It is games that now lead dapp usage too, and it is games that are the gateway into the metaverse. 2020 was The Year of DeFi, giving way to a 2021 for NFTs capped by virtual worlds. As these three categories converge and catalyze, 2022 will undoubtedly be The Year of the Metaverse,” said DappRadar Head of Finance and Research Modesta Masoit.
“GameFi encompasses the ideals that gamers shouldn’t just throw money away on in-game content, but instead invest their resources in assets that can appreciate in value and be resold on secondary markets,” CoinTelegraph explains.
The key to GameFi is its Play-to-Earn (P2E) strategy, which allows gamers to passively earn digital coins simply by playing a game. The coins can be used to create NFTs that can be sold, traded, or used for other purchases. The tangible nature of game coins is alluring for those who prefer to actively use their digital assets.
“Players can actually own the game items and they can see that they are scarce,” says Axie Infinity’s (AXS) co-founder Aleksander Larsen, The National reports. “It’s much more real than when you see someone wearing a Louis Vuitton bag on the street. The thing that blockchain brings is trust. That then extends to digital assets.”
Also trending in the GameFi space is the growth of independent gamers and developers, who are finding P2E to be extremely lucrative.
“And while this revenue has historically always been distributed to gaming studios such as Blizzard or Tencent, we have seen a shift this year, with the spread of blockchain technology in games, with gamers reaping the fruits of their work — some players reportedly earning up to $2,000 USD per hour on crypto games such as Axie Infinity,” the bitcoinist reports.
While many of the more popular P2E games are built on the Ethereum network, congestion on the blockchain and high fees make other platforms attractive to game developers. Solana (SOL), Cardano (ADA) and Polkadot (DOT), which are often called the “Ethereum Killers” are popular NFT blockchains.
As the stakes are high in P2E, developers are moving swiftly to up the GameFi game.
The Worldwide Asset Exchange (WAX), recently launched Blockchain Brawlers “that allows users to transfer NFTs used in the game interchangeably between Binance Smart Chain and WAX blockchain” through an NFT bridge, the company said.
“The NFT bridge built by WAX can build a future we envision, in which blockchain and NFT marketplaces are accessible to everyone regardless of the chain types,” said William Quigley, co-founder of WAX said in a release.
As the P2E space continues its track of explosive growth, investors are banking on gaming to do more than provide a source of revenue to those who play.
“Each play-to-earn game’s mechanism can differ, but usually, the reward mechanism comes in the form of staking, farming a game’s currency, or generating tradable NFTs,” Investor.com says. “Although numerous online games exist with a fiat-based auction or secondary markets, the critical difference with P2E on cryptocurrencies is through the properties of the blockchain. It creates in-game economies and business models with blockchain’s inherent properties of provable ownership, legitimacy, and rarity.”
Once again, blockchain proves its worth as a disruptor. This time by making play pay.
Joyce Pavia Hanson