Gaming on the blockchain is trying out multiple models to see which one is the best for a thriving virtual economy. The e-sports approach is showing potential to become a leader, both driving earnings and user activity.
Blockchain games, also known as play to earn games, share one common feature – gameplay is tied to rewards. Those rewards come in two forms, a blockchain token and NFT items. Some games choose only one of those options, most go for both to give players more engagement and incentives.
The competitive angle of e-sports adds meaning to the grind of earning tokens. The appeal of sports and fandoms adds meaning to the NFT.
How the eSports Craze Started on the Blockchain
The first startup to show demand for sports on the blockchain was Sorare. Its idea was simple – build up fantasy teams, while also selling fandom cards featuring legendary players.
The rarity of NFT items and the creation of a market built the foundations of the rarity economy. The rest of the Sorare game hinges on the strategy of building teams and entering tournaments for additional awards.
What Sorare did for soccer, NBA Top Shot did for basketball, creating its own ecosystem of teams, a fandom and a thriving market.
ESports Don’t Stop at Traditional Athletics
The eSports model is not limited to replicas of real-life sports stars and teams. It has been expanded to simulated racing or arena battle sports, where play to earn games mix an element of chance with statistics or skills.
Variations of the eSports model include racing games like Pegaxy or REVV. The brawler-type or arena battles include games like Crabada and Axie Infinity. The sports angle adds the thrill of creating teams with the best potential, to compete for top spots and special rewards.
The eSports model encourages real player engagement, while some PvE type games have removed the feature. The chief reason for this is bot-powered play that displaces actual players.
So, How do Play to Earn Games Work
Play to earn games use one of the best adaptations of blockchain technology, tested over years of adoption. Games have tried to integrate blockchain activity in a way almost unnoticeable to players.
In their initial iterations, games use in-browser technology, meaning they can always connect to wallets like MetaMask. This allows players to quickly receive their game balance and even trade it on one of the freely available decentralized exchanges.
For more complex games or mobile versions, often the game will use one asset balance within the game, which can then be exchanged for a crypto token.
This system works well for games that do not want to perform a blockchain transaction every time a token is spent, but they also want to offer their players an asset they can control, take on an exchange and monetize through trading. And this is the big difference between in-game assets that stay in the game. Blockchain games allow players to keep a part of their earnings.
Are All Blockchains Made Equal
In 2022, starting out with a play to earn game may cause some confusion. There are several ecosystems based on different blockchains, which are not openly competing, but are exclusive and have their own social media culture.
Initially, most decentralized apps relied on the Ethereum network. Later, new and faster networks invited their long lists of games: Binance Smart Chain, Polygon, Avalanche, Solana, Terra and others.
Luckily, most wallets and games try to integrate their blockchain seamlessly. But the end user still needs to be aware of the right blockchain, to avoid sending tokens to the wrong address.
Is Play to Earn Gaming Regulated
The biggest setback for newcomers to P2E games is the call for a significant initial outlay. Some of the more expensive NFT items and collectibles can command exorbitant prices. The earnings from reward tokens are also unpredictable, mostly due to market price volatility.
Owning NFT collectible items is also a risky bet in a very new industry, where most games are in their early stages and price discovery goes in all directions.
Currently, there are almost no restrictions or regulations to using P2E games. Anyone with access to a crypto wallet can try out a game. The games are thus entirely unregulated and depend on personal research to mitigate risk. While most e-sports rely on statistics or skill, there are some games that have a gambling element and may fall under gambling restrictions. But most e-sports play to earn games focus on casual or skilled gameplay with a small element of algorithmic luck.
However, when trying to exchange or swap the asset, regional restrictions apply for showing proof of identity and location.
Game mentions are not investment advice. Play to earn assets can expose buyers to market risk and technical risk of partial or total loss. Always do your own research before investing in digital assets.
