The global blockchain technology market reached $5.9 billion in 2021 and is expected to grow at a compound annual growth rate of 85.9% through 2030. This growth rate can be attributed to several factors, including rising interest in DeFi (decentralized finance) and non-fungible tokens (NFTs). Despite the positive forecast, these verticals still have a lot to accomplish.
It can be fun to make a real impact in the global blockchain ecosystem – and that’s exactly what the play-to-earn (P2E) paradigm is bringing to players around the world.
In fact, 18% of global NFT players between the ages of 18 and 34 have already experienced P2E gaming. In addition to India and Brazil, regions in Southeast Asia have the highest participation rates.
The impact of DeFi and NFTs on P2E.
The emerging field driven by DeFi and NFT technologies is improving attractive incentives for the GameFi ecosystem. For example, players can earn token rewards by completing missions in a game. In most cases, the earned tokens can be exchanged for local currencies or other digital assets.
DEXs, the pinnacle of DeFi’s core offering, are a popular avenue for token exchange. NFT marketplaces have also gained popularity as an integral part of GameFi.
However, as fun as it may sound, many P2E games present high barriers to entry for newcomers. For example, many GameFi platforms require users to purchase NFTs before they begin.
These can be characters, weapons, or a treasure pack. One popular game required players to front $1,100 just to get started. – a substantial sum, well above the expected budget of most gamers.
Lower barriers to entry through NFT rentals
Fortunately, innovations around the merging of DeFi and NFTs are leading to new ideas that can make P2E more accessible. For example, smart-contract-based rental and lending protocols allow players to acquire the NFTs they need on an affordable budget.
Players can borrow in-game assets for a small fee without having to provide risky collateral to lenders. Instead of buying expensive NFTs upfront, users now have the option to try out games by borrowing digital goods. If the player decides to stick with it, they can buy the NFT they value and continue having fun.
At the same time, players who lend their NFTs can earn passive income without the risk of default. This is made possible by the concept of forfeitable NFTs. It eliminates the risk of borrower default, as the lent NFT is in effect an expiring version of the actual NFT.
After a certain period, the rented NFT is automatically returned to the lender via trustless smart contracts. This allows players to try out a new P2E game for, say, two weeks. – Where the rented NFTs are seamlessly returned to the lender. This makes P2E gaming much more attractive and perhaps more economically sustainable.
Promoting an inclusive P2E ecosystem with guilds.
In addition to the technology-based approach of NFT rentals, the industry is also exploring other models to help newcomers enter the P2E space. One example – community-centric gaming guilds provide resources to players, also called scholars, who share revenue with the guilds.
Like traditional scholarships, initial resources and support are provided to the player. Guilds often provide the game resources, tools, and training that players need to start making money. The reward split varies between guilds. A 70/30 split is typical, where the player keeps most of the earnings.
Scholarships for newcomers to the P2E landscape can change the game in many ways. For example, fellows from any region and financial background can start earning money immediately to level the competitive playing field. Earned tokens or NFTs can be exchanged directly for other digital assets on Web 3.0 marketplaces or even fiat currency.
Guilds also give back by supporting various initiatives, such as developer fund programs. These initiatives allow developers to create more innovative solutions, including games that do not require upfront investment. Such developments have led to several GameFi variants, including play-and-earn and free-to-play models.
Disruption through innovation
This dynamic has led to a boom among young to middle-aged gamers. There are instances of a gamer earning three times their normal day job.
The fundamentals of DeFi and NFTs have revealed a new growth potential for the blockchain gaming industry. New NFT rental opportunities coupled with community guilds are encouraging newcomers to participate with less friction. The ball is now in the industry’s court to innovate further and bring millions of new users into the GameFi space.
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