Play-to-Earn (P2E)

What Is Play-To-Earn (P2E)?

Play-to-earn (P2E) games built on blockchain technology have emerged from the decentralized finance (DeFi) trend in recent years. They promise to revolutionize the gaming industry by allowing creators and players to monetize their gameplay in new ways.


Play-to-earn games reward players with cryptocurrencies and offer new ways of giving them ownership of in-game items using non-fungible tokens (NFTs), which function in an interconnected digital economy that converts into real-world value. These games feature different modes where players can earn or trade in-game rewards and collectibles for money.

Players in some countries have been able to earn enough money to make a real living. However, high volatility in cryptocurrency prices means this is not always sustainable.

How Does Play-To-Earn Work?

Traditional games operate a pay-to-play model, where players buy a physical or online game to be able to play it. Some games require players to pay additional fees for in-game items or access to extra levels.

In play-to-earn games, players earn real-world value or financial rewards through gameplay. Here is how it works:

  • Players engage in P2E games, which often incorporate blockchain technology and cryptocurrencies.
  • By completing in-game tasks and challenges or achieving certain milestones, players earn in-game assets, such as NFTs and coins or tokens that are native to the game, or existing cryptocurrencies, such as Ether (ETH). These digital rewards hold real-world value and can be traded, sold, or converted into fiat money.
  • Players can sell in-game assets directly or exchange them for cryptocurrencies on internal or external marketplaces.
  • Cryptocurrencies earned can be transferred to cryptocurrency exchanges and traded for other cryptocurrencies or converted into fiat currencies.
  • Some P2E games also allow players to stake their in-game assets or participate in decentralized finance (DeFi) mechanisms to earn additional rewards.

Remember, the specifics of how each P2E game operates may vary, but the underlying concept revolves around players earning real-world value through their in-game achievements.

This model is enabled by blockchain technology, which provides a secure, decentralized ledger to track and validate the ownership and value of the cryptocurrencies and in-game assets that players earn.

P2E games are expanding crypto adoption to a new audience of gamers
Aleksander Leonard Larsen, a co-founder of the popular P2E game Axie Infinity, said in 2021 that around half of its active players had never used a cryptocurrency application before.

What Role Do NFTs Have in Play-To-Earn Games?

Cryptographically unique tokens, known as NFTs, play a central role in how play-to-earn games work. NFTs are created by smart contracts that execute on a blockchain and establish the rules for the way digital assets operate. Blockchain-based games use NFTs to create unique in-game characteristics and items, from avatars and digital pets to virtual clothing, tools, weapons, and plots of virtual land.

The immutable nature of NFTs enables game creators to establish the uniqueness and rarity of each item or characteristic, which defines their market value. Once they buy or earn these NFTs, players have exclusive ownership rights, and they can sell or trade them in or across games.

The more gamers that join a play-to-earn game, the more these digital assets gain value as demand increases.

Play-To-Earn Marketplaces

In the traditional gaming industry model, a centralized publishing studio owns the game, access to it, and its development. The value of in-game assets is determined and captured by the publisher.

Conversely, P2E games typically operate an internal marketplace where players can trade their NFTs and cryptocurrencies with other players, and each transaction is recorded on the game’s underlying blockchain. Players can often trade them on external marketplaces as well, where their value is determined by broader market dynamics.

P2E marketplaces open up the games to robust community-based economies, increasing player control and creating a level playing field for stakeholders. The focus is not only on the gamer’s ability to earn rewards from gameplay but on player autonomy and verifiable asset ownership.

As NFTs can be used to verify the ownership of the items they represent, they are attractive to traders as an instrument to buy and sell to generate profits from fluctuations in their value rather than just as an asset used to play games. This has driven massive volatility in the cryptocurrencies and NFTs associated with P2E games as they have increased in popularity.

Potential Benefits and Challenges of P2E

Benefits Challenges
Opportunities to monetize gaming skills. Potential for regulation to disrupt blockchain and cryptocurrency operations.
Players create value for themselves as well as the game. Prevalence of scams and unsustainable in-game economies.
Ability to invest in virtual assets. Potential exploitation of players and developers placing limitations on earnings.
Tamper-proof blockchains reduce the risk of losing in-game collectibles. High cost of entry as the value of NFTs needed to enter games rises.
New gaming functionality enabled by NFTs running on blockchains. Scalability issues when game popularity grows rapidly.
Creation of new gaming communities and player-owned guilds. Loss of enjoyment in gameplay from striving to make money.

Examples of Play-To-Earn Games

There is a wide variety of play-to-earn crypto games, from adventure to card-based strategy, farming, role-playing, and racing. 

Some of the popular play-to-earn game examples include: 

  • Axie Infinity: A virtual world where players collect, breed, and battle Pokemon-like NFT-based creatures known as Axies.
  • BinaryX: A blockchain gaming platform developing strategy games such as CyberChess and Cyber Arena.
  • Galactic Arena: An online battleground that allows players to import their NFT characters from other games to join real-time player vs player (PVP) battles and place wagers on the outcome.
  • The Sandbox: A virtual world/metaverse where players can create, own, and monetize gaming experiences using its game maker, 3D NFT editor, and marketplace.   
  • DeFi Kingdoms: A cross-chain fantasy role-playing game (RPG) with tokenized resources and NFTs integrated with DeFi protocols. Quests and duels give players opportunities to earn in-game tokens and prizes.
  • Planet IX: A sci-fi metaverse-based strategy game in which players acquire and cultivate NFT parcels of land to restore a fallen planet. Players can form territories, develop new technology, raid other players, and gain ownership of in-game corporations.
  • MOBOX NFT Farmer: A gaming infrastructure that identifies the best player yield techniques and provides players with NFTs that they can use in all of its ecosystem’s games.
  • Arc8 by GAMEE: An arcade gaming platform. Players earn tokens by beating their opponents in multiple skill-based video games.
  • Treasure DAO: A decentralized NFT gaming ecosystem designed to connect metaverse projects.
  • Tamadoge: A blockchain project inspired by the 90s Tamagotchi, which offers a few P2E games with users playing using their Tamadoge NFTs and the native currency of the Tamaverse, the TAMA token.

The concept of the metaverse has exploded in popularity alongside play-to-earn games, as many of the most popular games are based on exploring shared virtual worlds. Users can interact in the metaverse with their NFTs as avatars, land parcels, and objects, and they can participate in PVP games in virtual spaces.

Cryptocurrencies are often highly volatile and can be susceptible to market manipulation, and face regulatory uncertainties. As such, it’s important to conduct due diligence when trading or investing in P2E coins and only invest what you can afford to lose.


Related Terms

Latest Blockchain Terms

Related Reading

Nicole Willing

Nicole Willing has two decades of experience in writing and editing content on technology and finance. She has developed expertise in covering commodity, equity, and cryptocurrency markets, as well as the latest trends across the technology sector, from semiconductors to electric vehicles. Her background in reporting on developments in telecom networking equipment and services and industrial metals production gives her a unique perspective on the convergence of Internet-of-Things technologies and manufacturing.