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What are Play-to-Earn (P2E) games?

What are Play-to-Earn (P2E) games?

Sankrit K headshot

Written by Sankrit K

Brady Werkheiser headshot

Reviewed by Brady Werkheiser

Published on 2023-03-144 min read

Play-to-earn (P2E) crypto games are games built on the blockchain that allow players to earn built-in cryptocurrencies, NFTs, and other assets with real-world value via gameplay. These in-game digital assets can be sold on marketplaces and cryptocurrency exchanges for real currency. This article gives an overview of P2E games, detailing how they work, and what types of P2E games are most popular. 

What are Play-to-Earn (P2E) games?

P2E crypto games are blockchain-based games that deploy on-chain digital assets and allow players to earn cryptocurrencies, NFTs, and other assets as they advance.

The first P2E game to gain widespread attention was Cryptokitties, which emerged in 2017. But their roots can be traced further back, to 2014, when NFT trading card game Counterparty was created in partnership with Force of Will. Counterparty lacked attractive mechanics so didn’t garner much attention. When Cryptokitties debuted on the Ethereum blockchain, it propelled the P2E gaming model to a new level through composable features and better gameplay.

Since then, the P2E gaming market has continued to grow and evolve, with new games emerging and offering players more opportunities to earn cryptocurrency through gameplay. Some more recent popular P2E games include Alien Worlds, DeFi Land, and Decentraland.

How do Play-to-Earn crypto games work?

In play-to-earn crypto games, games reward players with on-chain digital assets which can be used to progress, exchanged between peers, or traded on decentralized exchanges. Some games also offer rewards in the form of cryptocurrencies such as Bitcoin, Ethereum, and various altcoins.

Game developers are free to design the in-game economy however they like and can set rules governing the distribution and transfer of assets among users. The use of non-fungible tokens (NFTs) adds collectability and novelty to a game, making it more attractive to gamers.

While features such as in-game currency and asset collection exist even in conventional free-to-play and pay-to-play games, these currencies and assets cannot be traded outside the game environment. Blockchain-based games provide a more immersive experience through complete ownership, provable scarcity, and provenance tracking of in-game assets.

Play-to-earn crypto games leverage the intrinsic characteristics of blockchains—decentralization, immutability, and transparency—to provide a unique gaming experience that is both trustless and rewarding with assets that have real-world value.

What are the most common types of P2E games?

Most P2E games fit into one of five broad categories: NFT games, DeFi games, Farming games, NFT trading card games, and AAA web3 games.

1. NFT Games

NFT games rely on cryptocurrencies and NFTs for their core gameplay. The most popular types of NFT games involve collecting virtual land and building items on top of it that are also NFTs, or combining multiple NFTs to minut unique NFTs. With the rise of composable NFTs, developers are able to create even more complex and engaging gameplay experiences.

One early and popular example of an NFT game is CryptoKitties, which allows players to buy, breed, and sell digital cats with unique characteristics. Each cat is represented by an NFT, the value of which can fluctuate depending on market demand.

Another NFT game is Decentraland, which is a virtual reality world where players can buy and develop virtual land, represented by NFTs, and build their own virtual experiences. Players can also buy and sell virtual items, such as clothing and accessories, all of which are also represented by NFTs.

2. DeFi Games

DeFi games are built on top of decentralized finance (DeFi) protocols, or allow players to interact in DeFi through a gamified experience. DeFi gaming also enables users to earn outsized yields by providing liquidity to the network and staking their cryptocurrencies.

One popular DeFi game is Pool Party, which allows users to join prize pools and win rewards based on the amount they put in. The game is based on the prize savings model, under which users put in money and gain entry into a prize pool which then pays out rewards to players. These rewards are randomized and a player may or may not receive a significant return—however, they are guaranteed to get the entry fee back.

3. Farming Games

Farming games are a relatively new category of P2E games that revolve around gathering resources, growing crops, and farming animals. They use blockchain tokens to track ownership and build in-game markets for players to buy and sell items.

One such farming game is DeFi Land, which allows users to own virtual land and build farms on it. Players can then harvest crops, raise animals, and produce goods. The goal of DeFi Land is to gamify all aspects of decentralized finance.

4. NFT Trading Card Games

Trading card games have long been popular but were not previously easily digitized due to the difficulty of verifying authenticity—a problem that is solved by blockchain technology and NFTs. The ownership, authenticity, and provenance of NFTs is completely transparent and tamper-proof.

One of the current most popular NFT-based trading card games is Splinterlands, in which players compete against each other strategically to win more cards. Cards won in Splinterlands can be traded on other DeFi marketplaces.

5. AAA Web3 Games

AAA web3 games are large, complex games that use blockchain technology to provide players with true ownership and interoperability of in-game items. These games are designed to give gamers a truly immersive experience like never seen before.

Most AAA web3 games incorporate many interactive elements within the metaverse along with AR/VR compatibility. They are also optimized for low latency and increased responsiveness.

Alien Worlds and Star Atlas are two popular AAA web3 games, available on Ethereum and Solana respectively.

Build with Alchemy

There are many gaming tools built on the blockchain that can help developers build a great P2E game, but to make a game that is adopted at scale, developers also need robust and reliable infrastructure. Interferences like node downtime or network congestion can greatly discourage users from playing the game. That's why web3 game creators, like the team behind the Smurfs' Game choose to work with Alchemy.

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