The facts about Play-To-Earn, the Crypto market’s mainstream in 2021

Hookrook

Published in

LFW Official

6 min readDec 23, 2021

Authors: Noisy Noah, Ken Lee, Xavier Taylor, Ken Huna, Thomas Lang(*)

LFW

Market milestones in the cryptocurrency sector

In 2021, we witnessed the cryptocurrency market’s awe-inspiring power. As a result of the stock market’s amazing rebound in 2020, investors have begun to focus on decentralized finance as a viable alternative for centralized finance. The acquisition of currencies with a long history, such as Bitcoin, Ethereum, and Dogecoin, marks the beginning of the uptrend. On all media platforms, the digital economy has miraculous growth. Many individual investors, retailers have been aware of it and have begun to invest in this market. This has paved the way for the non-stop development of decentralized finance-related platforms that participate in the Decentralized exchange (Uniswap for ERC tokens, Pancakeswap for BEP-20 tokens, Quickswap for Polygon token….), the Decentralized Launchpad (Polkastarter…), Yield Farming, and, of course, the Centralized exchange, which serves as a vital link between the two worlds of Decentralized finance and Centralized finance. The bridge is particularly crucial in that it connects the regular market with the cryptocurrency sector.

We can witness investment flow moving from coins to tokens and tokens moving from one network to another. In a non-creative fashion, Uniswap’s model of decentralizing exchanges was duplicated to serve other networks. Polkastarter’s Decentralize Launchpad approach was swiftly cloned to suit the demand of more and more projects, as Polkastarter only accepted ERC-20 tokens at the time. As the gas fee of ERC increases higher and higher, the shift to other chains is inevitable.

The ongoing development of decentralized finance, in which transactions are carried out nonstop with tokens, has tremendously aided in the establishment of the foundations of decentralized finance on various chains, ERC, BEP, HECO, AVALANCHE, NEAR…. It establishes an extremely crucial foundation for the new factor known as NFT, the Blockchain game, and beyond that, the Metaverse. This is a new factor that has repeatedly demonstrated that cryptocurrencies will play a critical function and are applicable everywhere. Going a step further, people are starting to see non-fungible tokens (NFT) as an asset.

The new factor, the reigning king of 2021

Since the early 2000s, owning in-game objects has been a long-held fantasy of many gamers. Every year, gamers all over the world must fork over significant sums of money in order to participate in games and purchase in-game goodies.

In reality, they do not possess the products for which they have paid.

NFT is a solution that has been used by pioneering game companies, and Crypto Kitties can be considered to be one of them. Investors began collecting the NFT cards and swapping them with the other. Sometimes they make benefits from trading the NFT cards. However, it wasn’t actually a game, and Axie Infinity was the one who launched the trend when investors began to invest in NFT virtual beasts. Through the utilization of a hardcore economic mechanism, collectors can not only exchange individual pets in the form of NFTs, but they can also utilize them to participate in games and earn SLP token which is needed for breading new pets. This resulted in a profit for the participants and heralded the beginning of a new era known as “Play to Earn” or “GameFi”. In the cryptocurrency market, you can now see the phrase “Do something” to Earn everywhere.

Detailed explanations of the Axie Infinity game’s mechanics are provided in the diagram below. We will not go into detail about them here; instead, we encourage you to discuss them in our forum.

Holders of NFTs worked together with other players to participate in games and share rewards, thanks to the help of the Guild. When Covid was in the middle of its pandemic period, this enabled people from a third country to earn money. It has provided income for many people who are unable to work because of the outbreak. All throughout the world, Axie Infinity has become a huge success case study. Many people believe that the success of Axie Infinity can be attributed to the model of “play to earn”.

This is true, but it isn’t nearly enough.

For Axie Infinity to achieve its current status and value, three criteria must be present:

Axie Infinity has satisfied the thirst of the crypto market as a result of the boom in the crypto market, which has been fueled by the rise of Decentralized Finance. The crypto market has been looking for a new factor at a time when the infrastructure for the DeFi market was nearly complete.
For many participants, the Play to Earn method gives reasonable profit; yet, across several media platforms talked about Play to Earn at the same time.
Second Layers, Ronin, is being developed by the Axie Infinity team, and it has the potential to become a major participant in the blockchain gaming business. ImmutableX, a second layer solution provider, just received $77.5 million through a successful fundraising campaign.

A slew of blockchain game projects have emerged since then, with most of them focusing more on the revenue, FOMO than on the overall quality of the game, fun people may have while playing it, for example.

Many projects also turned investors into moths, and when the liquidity pool had grown large enough, they withdrew liquidity. I’m not sure if people genuinely play to earn money or if they just join to lose! We ask ownself more winners or more losers when they join the circle.

Popular Play-to-Earn models

Multi-Token Model

More than two tokens can be utilized in this concept for a game. To begin playing the game, players must purchase the game’s main token. Developers and investors will benefit from steady price growth, especially in the early stages of a project when demand for the token is high. Game players are rewarded with the second token with an unlimited supply. For a certain length of time, the price of tokens will fall if supply exceeds demand, resulting in a game that players would spend a very very long time to achieve break-even.

Ponzi Model

Many blockchain games currently use this model, in which a single coin is utilized. The rules of the game are straightforward, the return on investment is quick, and the potential for profit is virtually limitless. Due to the fact that latecomers must always pay earlier-comers, the price rises when latecomers outnumber emissive tokens from the players. There are a lot of people participating in this approach because it’s simple to grasp and rewarding to do so. This trend can be depicted using the Ponzi scheme depicted below.

Which model is best for LFW? Keep an eye out for our near future post.

About Legend of Fantasy War

Legend of Fantasy War is a unique 3D turn-based role-playing online blockchain game. By blockchainizing in-game items, the game provides players ownership of in-game items by owning so-called Non-Fungible Token (NFT). With an engaging storyline, players can both entertain themselves and collect valuable items, even increase the value of items while playing games solo or with others. Thanks to the blockchain of items, owners of NFTs can sell, exchange, and auction transparently on the Legend of Fantasy War NFT marketplace. One of the strengths of the game is the nature of the community. Thus, the game offers a fantastic mechanism that the player and their friends can enjoy the rewards together forever. In short, the game is easy to play and collect valuable items.