How the play-to-earn model is playing a key role in GameFi adoption
Blockchain technology has been around for more than a decade, and has disrupted practically every industry where technology is a fundamental driving factor.
However, defying logical expectations, the gaming industry has been slow towards the adoption of the cutting-edge technology for a variety of reasons.
Notably, the legacy gaming titles, especially Triple-A (or AAA games) games were very reluctant to the acceptance of blockchain technology, siting massive barriers to entry as a major hindrance for adoption. The reason for this, however, cannot be far-fetched and, for what it is worth, the Triple-A game publishers may be very accurate with their fears.
Fundamentally, if legacy blockchain technology like Ethereum is embraced by existing game publishers, it has the potential to cause a great deal of discomfort for existing users.
This discomfort, sadly, may arise from specific setbacks attributed to the blockchain technology including high transaction fees, slow throughput speed, and price volatility. Moreover, these setbacks have the potential to disrupt the otherwise flawless gaming experience that consumers are presently enjoying.
While the majority of these setbacks associated to legacy blockchain networks have been fixed with new upgrades such as Ethereum 2.0 for instance, the adoption of the technology is taking off rather slowly among legacy gaming titles.
The rise of GameFi and the role of ‘play-to-earn’
While blockchain and crypto adoption didn’t take off quickly among legacy game publishers, some blockchain developers thought of ways to create a new market that merges the gaming and finance industry together, thereby birthing the now emerging GameFi industry.
GameFi started out as an alternative to the proposed blockchain game for legacy gaming titles. Specifically, GameFi introduced another dimension to gaming technology by combining non-fungible tokens (NFTs) and decentralised finance (DeFi) with blockchain-based games.
Notably, by integrating NFTs, players are able to claim ownership of in-game items beyond the gaming world. On the other hand, DeFi enables the ease of transaction within the gaming network as well as offers economic incentives to players.
Furthermore, unlike legacy gaming titles, GameFi enables players to participate in game-related activities such as winning battles, building castles, or mining precious resources, among other gaming activities. These players are subsequently rewarded with a native token upon the completion of a task, or after securing victory against their peers. That said, what is the role of play-to-earn in GameFi?
The role of play-to-earn in GameFi
In addition to what has already been discussed, play-to-earn (P2E) in GameFi refers to a gaming model in which players are incentivised for their time and skills. P2E also refers to GameFi’s economy, as well as the use of a native token to reward players for participating in and accomplishing certain challenges, missions, or battles, depending on the gaming dApp.
The P2E economy also implies that each GameFi project is equipped with a decentralised marketplace that facilitates trading activities among players. Here, players can exchange or trade their native token for other crypto asset, or decide to invest in yield farming where they can lend, or stake cryptocurrency in exchange for interest and other rewards at the end of a period.
That said, by implementing the P2E model, players are not only interested in actively participating in the gaming network, they also tend to develop a sense of belonging. In contrast, legacy gaming titles do not offer any genuine economic value or incentives.
To put things in perspective, some legacy gaming titles are free-to-play, while others require a one-time purchase. Some titles, on the other hand, require in-app purchases, making legacy gaming purely a creator’s economy.
On the other hand, GameFi, with the integration of P2E provides a level-ground for creator-consumer economy, implying a win-win situation both for creators and players. More so, by providing genuine incentives for players, P2E plays a very instrumental role in the overall GameFi adoption.
Ultimately, GameFi is positioned to disrupt the existing gaming industry, while the integration of the P2E business model will help it gain mainstream adoption.
