Play-to-earn games have become all the rage within the cryptocurrency sector. It has often provided users with an alternative source of income and fueling the NFT mania even further. This growth could be seen playing out at the peak of the coronavirus pandemic when many who lost their jobs, saw these games as means of survival.
This was especially true for Axie Infinity, which led to much of the exponential growth during this time in regions like Southeast Asia, specifically in the Philippines and Vietnam.
The co-founder of Yield Guild Games, which is a DAO investing in NFTs from games and virtual worlds like Axie Infinity to allow members to earn yield and participate in these games, believes blockchain-based games have the ability to revolutionize work through ownership of intellectual property and making people self-sovereign.
Gabby Dizon, who was speaking at a recent podcast, noted,
“If you can come and participate in a network or a DAO and earn ownership then it enables you to create a lot of value and participate in upside by doing something that only you uniquely can do and this enables you to do a lot of different things.”
He added,
“I think this is where people are going in the future where you’re really honing your unique creative talents and finding a way to not just get paid for them but also gain ownership of what you’re creating and the protocols that you’re interacting with.”
Axie Infinity, in general, has allowed many to “build a life for themselves” over the past year and has appreciated many folds in value. Since launching in March 2018, its total sales volume has crossed $3.7 billion and its NFT tokens used to buy in-game upgrades have also moved in tandem with its growth.
Touching upon where these tokens derive their value from, Dizon underscored certain factors that affect a blockchain game’s chances for success. The chain that they are built upon is of utmost importance according to him, as games require more throughput and thus require networks that are faster than the ever-congested Ethereum.
He further added that scarcity and aesthetics also play a huge role in driving a token’s economy, while utility takes the highest position of importance. He said,
“Utility is really important because it works within a greater ecosystem and what a virtual world or game economy does.”
However, the price of Axie Infinity’s Smooth Love Potion, which is an infinite supply reward token that allowed newcomers to earn value by playing, has been steadily dropping over the past few weeks. This is due to increased speculation on 24×7 exchanges that was fueled by the game’s growing popularity, according to Dizon, who noted,
“It was probably unsustainable because it was driven by speculation and what you want for a game reward token is to be driven more by internal game economy rather than external forces.”
A recent report by analytics firm Naavik had also highlighted Axie’s inflation problem, as players cash out their high rewards rather than funneling them back into the game economy. This is making entry points to the game highly inaccessible, possibly sending its economy into recession soon.
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