Under the Hood of Play to Earn Gaming Tokens

“Play to earn” games that let players make real money through tokenized rewards took the world by storm recently. Smash hit games like Axie Infinity gained millions in daily active users seemingly overnight. But how exactly do these new economic games engineer viable in-game currencies balancing playability, incentives and sustainability?

We dive deep under the hood of some leading play to earn token designs to find out.

The Rise of Play to Earn Gaming

Traditional gaming revolves around creating engaging user experiences, not player incomes. But a new model called play to earn (P2E) incorporates real economic incentives using cryptocurrency tokens.

In P2E games, players can earn crypto tokens through in-game achievements like crossing levels, winning battles or creating in-game assets. These tokens hold genuine real world value and get listed on exchanges. Players can convert gains into cash. Top players in some P2E games like Axie Infinity earned 6 figure USD incomes through gameplay skill and technique.

For many fans in low income countries, these games provide livelihoods. P2E gaming effectively formalizes real money economies already common around rare virtual goods. Now asset ownership and earning transfers occur transparently on-chain instead via black markets.

Understanding In-Game Token Engineering

For P2E token-based economies to work sustainably, clever design balances is crucial across three key variables:

Playability

Games remain entertainment experiences first and foremost. No amount of money incentives lasts long if the actual gameplay lacksengagement and fun. The gaming content should tie intrinsically to earning mechanisms instead of feeling tacked on purely for money. Players will quickly lose interest otherwise.

Participant Incentives

The second pillar of a vibrant P2E economy is well calibrated incentives. Earning potential should map appropriately to difficulty, skill and effort required. Rewards must appear achievable enough to seem worth pursuing but still require substantive gaming time and mastery. excessively high or low incentives ruin engagement.

Token Economic Sustainability

The third critical pillar of P2E gaming tokens is long term economic sustainability. Even compelling gameplay and incentives cannot support a token if the underlying game economy falters due to imbalances. Factors like fixed token supplies, controlled minting, sufficient sinks, transaction fees and governance mechanisms that maintain stability over years are crucial.

Balancing all three pillars in harmony is the ultimate challenge P2E token designers face. Getting the formula right crafts magical gaming money amidst users. But sub-optimal configurations causes disenchanting collapses. Let’s examine popular play to earn tokens exhibiting thoughtful balancing across playability, incentives and sustainability.

Case Study 1: Axie Infinity (AXS)

The breakout P2E pioneer showing immense balancing prowess is monster battle game Axie Infinity from Vietnamese studio Sky Mavis. Players breed, battle and trade cute cartoon “Axies” to earn crypto income. In under 2 years Axie attracted a whopping 2.5 million daily players as per its Ronin sidechain data, making their AXS governance token highly valuable.

Playability

Axies combines gaming fun from classics like Pokemon and Tamagotchi with beautiful artwork and strategic battles. Hundreds of Axie types, each with varying stats and capabilities, offers tremendous variety for engagement. Highly tactical gameplay keeps players immersed in the vitally important fun factor.

Incentives

Money rewards come via SLP tokens for battling Axies as well as breeding new Axies. With over 2000 SLP potentially earnable monthly and exchange prices reaching 10 cents per SLP historically, top players earned several thousand dollars monthly playing Axie. Such outsized rewards incentivized massive participation.

Sustainability

Despite meteoric growth, several smart design decisions safeguard sustainability. First a Seasonal model with regular resets prevents gaming staleness. Second, SLP rewards scale down if token prices spike, preventing runaway inflation. Third, governing AXS tokens let players vote on monetary policies protecting health of the economy.

Judging from Axie adoption metrics, the trinity of play, incentives and sustainability fused beautifully creating a breakout phenomenon until recently. However, 2022 saw setbacks highlighting risks of narrow gaming focus and large incentive cuts. But lessons learned position it well for Web 3.0 gaming long term.

Case Study 2: Decentraland (MANA)

Beyond battle games, virtual worlds also make ideal sandboxes for P2E economies. That’s the premise behind blockchain powered virtual reality platform Decentraland where players develop virtual land and assets. Transactions and ownership use MANA tokens on Ethereum.

Playability

Letting users build entire mini worlds and games fuels tremendous engagement creativity. The only limits are user imagination. Attending concerts, social meetups, shopping zones, art corners provides endless gameplay avenues beyond typical questing.

Incentives

MANA earned by creating popular zones, assets or gameplay is exchangeable for cash. Top entrepreneurs in Decentraland monetized creations drawing crowds to their spaces. Owning virtual land early also proved hugely profitable as plots near popular spaces valuation skyrocketed. Such open ended earning potential incentivizes participation.

Sustainability

With finite land parcels selling for expanding MANA as demand rises, the economy remains sustainable. MANA spent on new lands and assets burns tokens keeping circulation optimal. As Decentraland expands universe depth, more gameplay opportunities sustain interest and token stability over long horizons.

Decentraland shows P2E models thrive not just in game confines but also virtual worlds. Next generation metaverse economies will likely build on such creative token designs.

Case Study 3: Coin Hunt World (CHW)

An ingenious example fusing real world mobility with P2E economics comes from innovative GPS powered crypto treasure hunt app Coin Hunt World. Players find vaults containing CHW tokens by physically walking around city blocks like a real life scavenger hunt.

Playability

Blending physical activity and mental strategy, the augmented reality game provides delightful gameplay melding digital assets with adventure in the actual world. Playing with friends adds fun social elements further engaging users.

Incentives

Players earn valuable CHW crypto discovering and unlocking vaults by actually covering ground. Coins can be compounded or used for in-app NFT purchases. Integrating such literal “earning feet” with sensory treasures makes for a highly rewarding experience.

Sustainability

While seemingly complex balancing real world movement with crypto payouts across geographies, a fixed daily minting schedule gives reliable but controlled token influx protecting sustainability. Local economies self adjust keeping earning progressive as adoption spreads virus across neighborhoods instead of destabilizing globally.

Coin Hunt World representsgeo-location crypto gameplay done right. Innovations like this highlight vast untapped design spaces still left for P2E to explore.

Evaluating Health of Play to Earn Token Economies

While we used specific examples above highlighting balanced and sustainable P2E tokens, many projects still struggle getting all ingredients right damaging viability. How can players broadly evaluate new token economies they may consider investing time into without getting caught in collapsing games?

Here are 5 key aspects to analyze closely judging long term sustainability:

Multi Year Development Runway

Long term P2E games require funding to keep content and features updated perpetually. Not having a multi-year runway to fund ongoing improvements undermines sustainability once initial hype fades. Corporate backing or well managed community treasuries help extent runway durability.

Feature Rich Roadmaps

Beyond funding, a vibrant roadmap detailing upcoming gameplay modes, narrative arcs, virtual goods integrations etc signals longevity intentions. Rich roadmaps suggest in-depth systems planning to sustain stickiness for years. Sparse unclear roadmaps should raise red flags.

Protocol Owned Liquidity Reserves

Token values fluctuating widely harms P2E stability quicky. Owned liquidity from platform treasuries helps smooth price impacts during volatility. User confidence improves if liquidity crunches minimizing market manipulation seem unlikely.

Study Token Circulation Schedules

Rapid unchecked token mints generate short hypergrowth spurts but crash hard subsequently. Analyze planned mint calendars — are new token unlocks gradual or sudden? Steady controlled minting sustains stability allowing adoption to catch up without harmful inflation.

Community Voting Transparency

Governance rights for players to collectively guide sustainability policies and dispute resolution instills confidence. Rules evolving transparently based on actual user input counters uncalibrated corporate game balancing detrimental to viability.

While many P2E contenders vie for glory now, gaming history suggests most fade quickly into obscurity unable to solve ecosystem puzzles. But analyzing aspects like above better forecasts who may stand tests of time and genuinely architect economic staying power benefiting players.

The Future of Play to Earn Gaming Tokens

Advances around machine learning generated game content, VR interfaces and spatial worldbuilding should dramatically enhance engagement and earning potential. Democratizing money making while retaining entertainment joy makes P2E gaming a profoundly empowering innovation.

Like any economic pioneers, early movers face high risks but reap outsized rewards if ecosystems blossom. For millions with few alternate progress avenues, reasonable gaming token opportunities bring hopes of better futures historically impossible before Web 3 invention.

Despite harsh winters hitting sentiment currently, long term outlooks for participatory incentive aligned metaverse economies still appear rosy. Play to earn gaming offers merely the first peek at coming decentralization of digital wealth creation spanning industries and human potential. When that genie escapes, no centralized force may contain its liberating might again.

Sources

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