Play To Earn: A Key Part Of Metaverse Economics

Play To Earn: A Key Part Of Metaverse Economics

The gaming craze was on a high note starting last year as more people engaged in online activities following the Pandemic. According to reports by DappRadar, Crypto play-to-earn applications (GameFi) have now surpassed decentralized finance (DeFi) users. As per the report, about 50% of crypto wallets connected to decentralized applications were in the gaming industry in November. There are over a thousand blockchain-based games, with developers adding about 70 more new ones each month. In the first half of 2021, these companies reportedly received about $476 million in investments.

Previously, the gaming industry was mainly lucrative for developers and investors, leaving gamers with the thrill of their games. However, recent technologies and developments have introduced the play-to-earn (P2E) concept, allowing players to partake in the multimillion industry. The P2E model rewarded all participants for contributing to the market's growth.

The current gaming scene has seen increased convergence of the physical and digital worlds, creating a new digital space, the Metaverse. Notably, the innovation has been helpful in the transition from physical to online marketplace, opening up new possibilities. While most of the Metaverse represents a fantasy world, a few have been created to represent real-life scenarios.

The Metaverse

The Metaverse combines two words, 'meta' meaning beyond and the universe. Metaverse is an integrated network of 3D virtual worlds that features virtual land, avatars, and buildings that can be sold bought, or lent out to others. In this reality, people can engage in various activities, including trade, work, play, socializing, or shopping. The Metaverse provides the perfect 3D representation of the games redefining the entire gaming experience for players.

Since its creation, the Metaverse has been a trending discussion catching the eyes of many, especially within the blockchain industry. Although the Metaverse is still in its infancy stages, the digital space has allowed people to own land, trade cryptocurrencies, and create NFTs. While the numbers are pretty promising, developers have been forced to incentivize users to join this digital space.

What is P2E?

The play-to-earn model is an open economy that works by allowing users to participate in various gaming activities to receive different rewards, including in-game assets or money. The in-game assets can be anything from cryptocurrencies such as Bitcoin or Ethereum to NFTs. This model is a community-led business model that allows players to enjoy their favorite games while making an essential contribution to the games.

P2E in the Metaverse

According to reports, the play-to-earn model has been fundamental in adding value to the Metaverse, and investors and users continue to rush in for their market share. Importantly, users get to explore this innovation while receiving rewards in cryptocurrency for their participation. The rewards earned in the games can be taken out of the gaming platform and exchanged for other crypto or fiat currencies. Some players have quit their day jobs to play games full time, making about $100,000 per month. Notably, unlike traditional games, users do not need to invest hours upon hours in the game to get salaries to form e-sport teams, paid promotions, or sponsorship.

The P2E model continues to gain traction because it has provided both expert gamers and beginners equal opportunities in the market. By design, P2E games deliver most of their monetary value back to gamers, reducing the gap between the top and ordinary players.

Final thought

Despite being relatively new, the concept has gained much popularity taking the gaming space to a new level. P2E is creating a new class income opportunity for the growing gaming industry by allowing users to cash in their rewards in the physical world.