Play-to-Earn (P2E) and the Adventure of GameFi

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In 2017, Ethereum launched CryptoKitties, the first widely recognised blockchain game. Shortly after, a number of other decentralised blockchain games were launched, including Ether Shrimp Farm, Ether Cartel, and Pepe Farm. These games use a P2E economic model, which provides players with the opportunity to monetise their time spent playing games.

In P2E games, in-game assets are usually represented as NFTs, which players can obtain through in-game advancement and gameplay. Unlike traditional video games, where developers control all in-game economics, players in P2E games have ownership and control over their digital assets. They can even contribute to game decisions and help shape the future of the game through the accumulation of tokens.

Take Fairy Cat Gamefi (Fairycat .net), for example, a blockchain game that rose to prominence in 2022. In Fairy Cat, players collect, breed, train creatures called ‘Fairy Cat’. Unlike conventional in-game items, each Fairy cat and item can be traded on the game’s marketplace for real money.

The game has one native cryptocurrency: USDT. Which is what players earn through playing the game.

With all that said, games like Fairy cat can have a cost of entry. In order to start playing, users must adopt one pet character. Building out an average team in first stage would have cost around US$30

This initial cost is still a huge barrier for many, especially as the vast majority of blockchain game players currently hail from developing countries. This hurdle has led to the rise of gaming guilds — platforms that enable NFT owners to lend out in-game assets (NFTs) in return for a share of the assets generated — which reduce the considerable upfront costs for would-be participants. The most well-known guild is Yield Guild Games (YGG).