While 2021 will be mainly remembered for the massive price hikes seen across crypto assets and NFTs, blockchain gaming has also seen rapidly expanding user adoption and has blossomed to take over 50% of all activity across the blockchain industry.
Most of these Web3 games use a play-for-profit (P2E) economic design where players are rewarded for their time, efforts, and in-game achievements. Combining basic gameplay with economic mechanics, most P2E Web3 games rely on rewarding players with in-game items in the form of NFTs or platform tokens.
However, this model has proven to be highly unsustainable in bear markets and has forced Web3 gamers to turn to a hybrid solution that includes both NFTs and fungible tokens (FTs). By providing better fluidity at the expense of fungible economies, this generation of Web3 games is now being replaced by a revolutionary economic design that can drive the P2E Web3 gaming sector towards better sustainability.
The challenges of the Play-to-Earn gaming space
NFT-only Web3 games, also known as Gen 0 due to their somewhat backward economics, are prone to issues with token liquidity, asset valuation, and low trade frequency. In such games, low NFT trading volumes restrict added value to the game’s economics, which negatively affects the market value of the original tokens even further. Combine this inherent design flaw with a crypto bear market, and it’s not hard to see why so many games perish in such scenarios.
In addition, many of these Gen 0 games are just tokenized versions of Web2 games, running off the blockchain but using crypto assets in an effort to attract Web3 users. As a result, most of these games don’t last beyond the first few months since their launch, leaving most of their users with NFTs that have no tangible value outside of the game. Therefore, the need for immersive games supported by robust economic designs is critical to the future sustainability of the blockchain gaming sector.
Moving away from NFT-driven economic models towards sustainability
The first step in this direction was the introduction of the next generation of Web3 games, those that use redeemable tokens representing items with higher trading volumes and NFTs for more valuable in-game items.
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A prime example of this is the Star Atlas platform, which gives users the opportunity to experience living in space and explore the future of reality aboard their own customizable spacecraft.
By offering redeemable tokens that have a limited lifetime and can be purchased using the original in-game token, such projects can generate much higher trading volumes and essentially maintain constant supply and demand metrics.
However, with Web3’s crypto farming game CropBytes announcing the imminent launch of a service economy feature, the space is poised to witness the next evolutionary phase that will present gamers with a truly self-propelled economic model.
Long-term construction with innovative economic models
By offering Web3 investors ways to participate in the Web3 gaming sector, CropBytes pioneered the concept of a service economy where players could earn income through the use of the assets of their investors or traders. Tagged as “get paid to play,” CropBytes on this new model will allow players to use their native CBX token to pay other users for services like growing crops or feeding farm animals on their behalf. Alternatively, they can also lend NFTs to other players for a fee.
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As players trade assets and collect in-game items that can be exchanged for CBX tokens, CropBytes is one step closer to unlocking the full potential of blockchain gaming and harnessing the power of cryptography to create a sustainable and balanced virtual economy.
Laying out a roadmap for the future of Web3 gaming
The introduction of service economy principles can help the Web3 gaming sector increase transaction volume and help generate the liquidity needed to create gaming economies that can survive crypto winters, like the one we are experiencing today.
CropBytes was among the first blockchain games to incorporate a service economy approach, and now the big names in the space are following suit. Axie Infinity recently launched the Axie Homeland Alpha Program, which allows players to farm and breed on their own Axie land, generating and spending resources in the game. Service economy concepts have become a core approach in the blockchain gaming ecosystem.
Moreover, introducing governance features would be the next natural progression for the space. However, this will first require existing players to develop large, fungible economies of service, thereby supporting them in maturing to a level where investors, token holders, and other stakeholders will govern the broader gaming ecosystem.
