A new opportunity for wealth creation through Web3 gaming:
Built on the blockchain architecture, these Web3 games reward or incentivize their participants for their time & are looked upon as the investment mechanisms by many users. There are a variety of rewards models like play-and-earn, rent-to-earn and play-to-earn.
To consider an example, a Web3 game called ‘Axie Infinity’ has represented a new and unique paradigm w.r.t. online gaming. Would you believe that, during the recent pandemic, it has offered a means for a few residents of Philippines who have lost their jobs to earn an income? A massive hype around these Web3 games has begun during the recent COVID-19 pandemic in 2020, when a game called Axie Infinity has launched its governance token ‘AXS’ onto the public exchanges. A huge rise in players has fueled demand, and thus the Axie Infinity’s protocol revenue has jumped an astonishing 12,047% in 3 months. In May 2020, the game’s revenue was about USD 3 million and by August of the same year, it has peaked at USD 364.4 million.
Let us have a look at 4 opportunities which may help generate wealth through Web3/NFT gaming.
1. Play-to-earn games –
There are around 1300 P2E games available currently for gamers (Source: Playtoearn.net). Games like Axie Infinity have seen a meteoric rise in the recent past. With this game, the participants can invest in “Axies”, an NFT (Non-Fungible Token) which the game can be played with. The Axies may appreciate in value and might be flipped for extra bucks. A few people have earned enough through this game, that the government of Philippines stated that the revenue earned through Web3 games would be subject to income tax (similar to that of tax levied on the regular income jobs) instead of capital gains tax. That’s the kind of impact that P2E games have been able to create so far.
According to the recent survey conducted by ‘Balthazar’ with 1100+ respondents based out of Philippines, 1 in 3 gamers are willing/ready to resign from their professional jobs to play NFT games full-time and earn, while doing side gigs.
2. Rent-to-earn –
GameFi projects like ‘Web3 Inu’ based out of UK have introduced Rent-to-earn model where the on-chain players can mint the NFTs and rent them to the off-chain players that might help them earn more or higher yields. Platforms like IQ protocol (iq.space) are providing a DeFi Solution for renting NFTs and Fungible Tokens which in beta stage as of now. ‘IQ Protocol’ enables the digital asset owners to earn passive income by safely lending their NFTs & Fungible Tokens. Renters on the other hand, can gain access to assets and their utility for a specified period of time.
So typically, if you don’t wish to play the game, you may still make some money from R2E model by owning the NFTs and renting them to the guilds. This is a relatively newer and evolving trend hitting the NFT space recently, but it’s showing some serious hype. Not many projects or guilds offer this kind of service, but just like the play-to-earn model, it might catch on soon, too.
3. Play-and-earn model –
While P2E is on the rise, Play-and-earn model has started making headlines after a project ‘GamerGains’ has recently announced that they have received USD 5.8 million in funding. GamerGains will help players earn crypto rewards through their gameplay without any digital wallet or previous Web3 gaming experience. The concept of playing favorite games (the traditional way on PC and gaming consoles) and earning crypto for the same is indeed interesting.
Xiro, a Web3 gaming project aiming to introduce Web3 world to the Web2 gamers while they can earn crypto by playing the games they already love on their mobile devices, eliminating the barriers of entry is another interesting project to look out for.
Play-and-earn might revolutionize the way gamers are playing the games while bringing decentralization and power to the players. This is a much-needed shift from the conventional Web2 games.
4. Invest in Web3 gaming projects –
If you don’t want to play the games and you also don’t wish to own game NFTs, there is one more opportunity you can explore. It is to invest in the gaming projects or guilds directly. You can do this in a few ways. Before a project’s token is listed on the public exchange, there is usually a pre-sale round on the Launchpads. This is when the public can have the opportunity to invest in the token at a pre-sale value, that is usually much lower when compared to the IEO (initial exchange offering). It’s highly competitive to get in; you may not be guaranteed a particular allocation, and there would also be limited allocation amounts, vesting periods.
Apart from this, you can also invest into these projects by buying tokens on a centralized exchange like Binance, Coinbase etc., or decentralized exchanges like Uniswap or Pancakeswap. Not all projects get listed on the centralized exchanges as it takes a lot of time to submit their projects, wait for exchange to audit and check if they are eligible to be listed in the exchange. So, projects release their tokens through decentralized exchanges like Pancakeswap initially. Tokens can be purchased in these DEXs.
NFT/Web3 gaming is on the rise, and it seems promising to create new wealth opportunities now and in the future. While we’re at a pivotal moment in time to see this new Web3 gaming industry flourish, there is definitely still more to come within the current suite of games, NFTs and platforms. There will be even more opportunity with the new projects that are in development and those that haven’t yet even begun. It’s a great time to watch this space and get involved. at Xiro, are aiming to bridge the gap between Web2 and Web3 for the gamers, while they can earn crypto by playing the games they already love, eliminating the barriers of entry. Are you a gamer? Follow us on Twitter and LinkedIn to stay updated about our project.
Disclaimer — This article doesn’t constitute any investment advice or suggestions and is only intended to provide knowledge. Invest in digital assets after thorough research, at your own risk.