Play to Earn brings together DeFi and NFT investment to create wealth through community growth and innovative game models.
In 2021, the growth of play to earn was exponential, indicating that cryptocurrency trends are shifting away from a closed community of arcane knowledge and toward a community of easy access and adoption. From concept to reality, various overlapping trends and technologies influenced the increasing value of digital assets.
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P2E: A New Option for NFT Ownership
Despite their enormous popularity, digital artifacts’ ownership is unclear, with critics pointing out that claiming to own Internet-based images that are easy to copy has no value. What is a Crypto Punk’s intrinsic worth? After all, anyone can download the image and use it as an avatar, a design, or a joke.
However, in the world of play to earn, owning non-fungible digital tokens, or NFTs, is a unique experience. The items are also linked to the game, or to a still-developing metaverse of simulated features.
On the one hand, we have the modern NFT collections, which are digitally alive in a Web 2.0 world. They’re posted on social media, gaining attention and a bit of online celebrity. Playing for NFTs, on the other hand, aims to navigate a still-developing metaverse. Some see this as the start of Web 3.0, in which a new sort of platform and resources will redefine what digital ownership and scarcity entail.
Characters, weapons, creatures, and even digital land cannot be replicated or utilized in another context in the initial iteration of this sort of ownership.
Blockchains Evolving Because of Play to Earn.
Playing to earn introduces unique speed constraints that can’t be implemented directly to some of the older blockchains. The Ethereum network has long been a go-to for creating tokens and collecting NFTs, but it isn’t enough to make money in this game.
As a result, games only rely on Ethereum, the ETH token, and the use of ERC-20 assets as a means of payment in part. Some players in earn-to-play games are migrating to various blockchains or creating their own, tailored to the game’s specific requirements.
WAX and ICP networks, for example, provide novel forms of distributed computation that are not dependent on mining. New blockchains, such as Solana (SOL), are grabbing a piece of the metaverse business model as well. Because of its inexpensive rates, Solana has become one of the most popular places to create digital assets.
Other projects are constructing blockchain bridges, allowing users to avoid wasteful trade while playing games and purchasing digital goods. NFTs, rare characters, and reward tokens can now travel through a wider range of channels. In 2021, this integrated network is still being built, with some faulty bridge contracts and still-high prices. However, cross-chain activity is increasing, allowing games to be played across several networks.
DeFi is Being Reinvented by Play to Earn.
Over the years, the cryptocurrency community has sought to develop many versions of traditional finance, each with varying degrees of sophistication. But, whether it was loan, insurance, or decentralized trading, all of those tools had the weight of an elite financial club for individuals with specialized understanding. Decentralized Finance, or DeFi, became the collective name for the projects in that field.
However, when DeFi was made gamified, it was discovered that adoption was even faster. A lot of DeFi is just sitting around waiting for tokens to grow in value. With play to earn, a fun game is added to the wait, often with a competitive element and a more engaging prize distribution method.
New entrants will have an incentive to keep onto their assets longer in order to utilise them within metaverse ecosystems if they participate in play to earn. The use of game tokens aided the development of decentralized exchanges, allowing even new coins to obtain liquidity in days.
Investment Model for Play to Earn Changes
For years, the ideal cryptocurrency approach was to just retain assets in the hopes of watching them appreciate to life-changing fortune one day. This hypothesis proved to be accurate for early Bitcoin acceptance. However, most projects are pushing adoption and activity rather than waiting for gradual acceptance, thus play to earn is moving at a far faster pace.
Playing to earn is thus a simple way to get started in the world of cryptocurrencies, with some assets giving extremely significant gains. These one-time occurrences, however, may be uncommon. The goal of play to earn games is to increase the number of players and receive value based on the growth and activity of the community.
In Every Pocket, a Crypto Wallet
Play-to-earn games are capitalizing on the success of its free-to-play counterparts. In truth, some play to earn games have a preview mode that does not require the use of cryptocurrencies. However, the ability to create a wallet to retain token earnings or NFT-protected objects is always available, and more potential players can take advantage of it.
Axie Infinity and other games like it took off like wildfire, with mobile and PC versions readily available. Cryptocurrency wallets for game revenue are also evolving, with NFT gallery features, built-in exchanges, and DeFi tools also available. Most of these technologies have no entry barriers and are completely decentralized, allowing for swapping and trading with few restrictions on the player’s location.