How to create NFT games? – A practical guide

Maciej Zieliński

17 May 2022
How to create NFT games? – A practical guide

NFT games are entertainment products that are based on blockchain technology and tokens. More and more entities use NFT to monetize their ventures in the gaming industry. This allows players to create, sell, or buy tokens of any game-related object while providing financial support to the game's developer. How does it work in practice? How to create an NFT game? We're writing about it below!

Who profits from NFT games?

With NFT, creators can tokenize and sell skins, artifacts, armor, weapons, etc. in a given form. NFT can be used not only by developers, but also by players. For example, they have the ability to sell NFT in-game to other collectors and players, thus earning money and cryptocurrency.

How to start making an NFT game?

In order to design and utilize NFT in-game, developers create smart contacts that automate the use of tokens. An example of this is the most popular blockchain game – CryptoKitties, where several smart contracts create a structure for the entire game! As for smart contracts, a good example is GeneScience, which defines a random mechanic in order to generate new cats. In addition to smart contracts, there are other things to consider when creating an NFT game.


NFT game model

There are currently two most popular forms of NFT games:

  1. P2E (play to earn) - gameplay will only start when you purchase the NFT token. This does not change the fact that in the future there will be an opportunity to treat the game as a potential investment.
  2. F2P (free to play) - it's a unique form of entertainment that cuts down on initial costs. You can play it immediately, free of charge. When you create a game in this respect, you may find that potential revenue is lower than P2E. Such games do not have NFT in useable form. Older players teach younger players in order to participate in later profits.

NFT game genre

Select the genre of game that will be targeted at potential users. Keep in mind that an NFT game is very similar to a classic game. The difference will only be the monetization of your product. A number of genres are therefore available for selection:

  • adventure games,
  • RPG’s,
  • story driven games,
  • card games,
  • strategy games,
  • war games and many more.

After choosing a genre, analyze the competition. It may be worthwhile to check out similar games using blockchain technology. Don't copy games that have not been successful. Some choose a solution that takes advantage of the best and most interesting features from the competition’s projects. All information regarding the game should be written down and recorded in the game's design document. This will help you avoid the issue of your team not understanding your vision of the project. Designing proper and transparent stages of game development, including levels, conditions of promotion and monetization, will help to avoid misunderstandings. When you achieve this, move on to designing the visuals.

Application availability

Applications built on blockchain technology have their own dApps name, meaning they are decentralized. This is important because the main code and data of the decentralized application are stored in a peer-to-peer blockchain. This is the opposite of a client-server application where information resides on servers that are easy to hack. Emphasis should be placed on decentralization, as every cryptocurrency is decentralized. In addition, decentralized applications are open source.

Mobile app vs Web browser

Another element to consider is how your customers will use the game. Reactions can be based on a web browser or a mobile application. Both forms are attractive for NFT implementation. The web application is widespread and can be started from almost any device. The mobile app will certainly work better on smartphones and offers many unique features.

Mobile applications – division

Mobile applications can be divided into native and cross-platform forms.

  1. Native form – applications are created for a specific operating system and provide access to a variety of smartphone features: camera, contact list, GPS, and more.
  2. Cross-platform form – Cross-platform options will not have access to smartphone features, but they are much easier, faster, and less expensive to create. This is because you need only one solution that will work on all operating systems.

Whichever feature you choose, consider whether your game can be used on a smartphone. Moreover, AppStore has a number of requirements and restrictions for gaming apps. There is also the hybrid application, which is both a mobile and web application.

Selection of technologies for NFT games

Encorporating NFT into video games is best done using open source. One of the most popular ecosystems for making games with NFT is the dApp "Truffle Suite". It is the best place to develop smart contracts. Truffle Suite is used by entities such as Microsoft, Amazon or VMWare. This solution provides blockchain developers with a standard and schematic environment to test potential smart contracts in gaming. As for the best blockchain to build an NFT game on – that would be Ethereum. It's the most popular platform for creating and running NFT – also in gaming, where it enjoys the greatest popularity.

This image has an empty alt attribute; its file name is gaming-4970616_1920-1-1024x683.jpg

Truffle Suite is comprised of three different elements:

  • Truffle – is an environment for developers who use Ethereum as a basis for creating NFT and implementing and using smart contracts.
  • Ganache – is a tool that allows you to configure the local Ethereum blockchain. This ensures that decentralized applications can be deployed, developed and tested in a secure location.
  • Drizzle – is a set of front-end libraries designed to develop and create a transparent interface.


This element can be created using Javascript. You will need the right Framework, which will guarantee a set of specific software solutions. This will give us the design, logic and basic functions of the game. In addition, some tasks allow the creator of an NFT game to add their own code to a package created in a Framework. The Front-end can be hosted on Netlify, one of the best platforms for web creation. It's a great solution for small groups making NFT games that don't have the ability to build an infrastructure for their plans by themselves.

Wallet and payments

Let us remember that ordinary money is handled differently than cryptocurrencies. A cryptocurrency is stored in a virtual wallet based on blockchain technology. The crypto portfolio is a space that allows you to store your crypto or NFT without third party intervention. Let us remember that when creating NFT games, we need to guarantee a high level of security for wallets. The best way to choose the appropriate method of storing capital is to go to the web page of the cryptocurrency that interests us, and then check the recommended wallets for storing it.

Each wallet must meet the following requirements:

  • needs to have private and public keys;
  • needs to have several levels of security.

If these conditions are met cumulatively, then everything is done properly.

Smart contracts

Thanks to blockchain technology smart contracts, we have access to programs that run based on fulfilling certain contract terms. Users who want to access the NFT as part of a computer game must follow this procedure:

  1. The Frontend receives the user address from the crypto portfolio.
  2. The Frontend sends the user address to the smart contract.
  3. The smart contract provides the user with a NFT address.

The creation of smart contracts begins by checking the official Ethereum blockchain library, Web3. This allows us to abstract from the internal mechanics of Ethereum and work with networks and intelligent contracts as if they were normal JavaScript objects.

Testing an NFT game

To test an NFT game, it's a good idea to use a particular blockchain for that purpose. For example, Rinkeby. There are several ways to test NFT games, which are as follows:

  • Functionality testing – this is a test to check the overall performance of the game, data transfer, block size etc.
  • Security testing – this is a mandatory test that helps us determine if the blockchain system is in danger of being hacked.
  • Interface testing – when creating an NFT game, keep in mind that you need to make sure that the workflow and functionality work properly.
  • Integration testing – this is the bridge between different programming components.
  • API testing – This checks the software components' communication with the external API, so we can be sure that requests and responses are processed automatically in the proper way.


Seeing the above requirements you should be aware that creating an NFT game requires a lot of knowledge and dedication. You can create it in various forms. Make sure not to make the gameplay entirely based on monetization. In addition, consider whether the NFT are attractive enough (and the game itself as well) to incentivize players to invest in NFT for the so-called “skins” or other elements of a virtual character. Whether you choose a browser, mobile or hybrid model, it's important to keep in mind that NFT can generate high revenue, but it can also leave a negative impression on players if it is purely finance-focused.


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Applying Game Theory in Token Design

Kajetan Olas

16 Apr 2024
Applying Game Theory in Token Design

Blockchain technology allows for aligning incentives among network participants by rewarding desired behaviors with tokens.
But there is more to it than simply fostering cooperation. Game theory allows for designing incentive-machines that can't be turned-off and resemble artificial life.

Emergent Optimization

Game theory provides a robust framework for analyzing strategic interactions with mathematical models, which is particularly useful in blockchain environments where multiple stakeholders interact within a set of predefined rules. By applying this framework to token systems, developers can design systems that influence the emergent behaviors of network participants. This ensures the stability and effectiveness of the ecosystem.

Bonding Curves

Bonding curves are tool used in token design to manage the relationship between price and token supply predictably. Essentially, a bonding curve is a mathematical curve that defines the price of a token based on its supply. The more tokens that are bought, the higher the price climbs, and vice versa. This model incentivizes early adoption and can help stabilize a token’s economy over time.

For example, a bonding curve could be designed to slow down price increases after certain milestones are reached, thus preventing speculative bubbles and encouraging steadier, more organic growth.

The Case of Bitcoin

Bitcoin’s design incorporates game theory, most notably through its consensus mechanism of proof-of-work (PoW). Its reward function optimizes for security (hashrate) by optimizing for maximum electricity usage. Therefore, optimizing for its legitimate goal of being secure also inadvertently optimizes for corrupting natural environment. Another emergent outcome of PoW is the creation of mining pools, that increase centralization.

The Paperclip Maximizer and the dangers of blockchain economy

What’s the connection between AI from the story and decentralized economies? Blockchain-based incentive systems also can’t be turned off. This means that if we design an incentive system that optimizes towards a wrong objective, we might be unable to change it. Bitcoin critics argue that the PoW consensus mechanism optimizes toward destroying planet Earth.

Layer 2 Solutions

Layer 2 solutions are built on the understanding that the security provided by this core kernel of certainty can be used as an anchor. This anchor then supports additional economic mechanisms that operate off the blockchain, extending the utility of public blockchains like Ethereum. These mechanisms include state channels, sidechains, or plasma, each offering a way to conduct transactions off-chain while still being able to refer back to the anchored security of the main chain if necessary.

Conceptual Example of State Channels

State channels allow participants to perform numerous transactions off-chain, with the blockchain serving as a backstop in case of disputes or malfeasance.

Consider two players, Alice and Bob, who want to play a game of tic-tac-toe with stakes in Ethereum. The naive approach would be to interact directly with a smart contract for every move, which would be slow and costly. Instead, they can use a state channel for their game.

  1. Opening the Channel: They start by deploying a "Judge" smart contract on Ethereum, which holds the 1 ETH wager. The contract knows the rules of the game and the identities of the players.
  2. Playing the Game: Alice and Bob play the game off-chain by signing each move as transactions, which are exchanged directly between them but not broadcast to the blockchain. Each transaction includes a nonce to ensure moves are kept in order.
  3. Closing the Channel: When the game ends, the final state (i.e., the sequence of moves) is sent to the Judge contract, which pays out the wager to the winner after confirming both parties agree on the outcome.

A threat stronger than the execution

If Bob tries to cheat by submitting an old state where he was winning, Alice can challenge this during a dispute period by submitting a newer signed state. The Judge contract can verify the authenticity and order of these states due to the nonces, ensuring the integrity of the game. Thus, the mere threat of execution (submitting the state to the blockchain and having the fraud exposed) secures the off-chain interactions.

Game Theory in Practice

Understanding the application of game theory within blockchain and token ecosystems requires a structured approach to analyzing how stakeholders interact, defining possible actions they can take, and understanding the causal relationships within the system. This structured analysis helps in creating effective strategies that ensure the system operates as intended.

Stakeholder Analysis

Identifying Stakeholders

The first step in applying game theory effectively is identifying all relevant stakeholders within the ecosystem. This includes direct participants such as users, miners, and developers but also external entities like regulators, potential attackers, and partner organizations. Understanding who the stakeholders are and what their interests and capabilities are is crucial for predicting how they might interact within the system.

Stakeholders in blockchain development for systems engineering

Assessing Incentives and Capabilities

Each stakeholder has different motivations and resources at their disposal. For instance, miners are motivated by block rewards and transaction fees, while users seek fast, secure, and cheap transactions. Clearly defining these incentives helps in predicting how changes to the system’s rules and parameters might influence their behaviors.

Defining Action Space

Possible Actions

The action space encompasses all possible decisions or strategies stakeholders can employ in response to the ecosystem's dynamics. For example, a miner might choose to increase computational power, a user might decide to hold or sell tokens, and a developer might propose changes to the protocol.

Artonomus, Github

Constraints and Opportunities

Understanding the constraints (such as economic costs, technological limitations, and regulatory frameworks) and opportunities (such as new technological advancements or changes in market demand) within which these actions take place is vital. This helps in modeling potential strategies stakeholders might adopt.

Artonomus, Github

Causal Relationships Diagram

Mapping Interactions

Creating a diagram that represents the causal relationships between different actions and outcomes within the ecosystem can illuminate how complex interactions unfold. This diagram helps in identifying which variables influence others and how they do so, making it easier to predict the outcomes of certain actions.

Artonomus, Github

Analyzing Impact

By examining the causal relationships, developers and system designers can identify critical leverage points where small changes could have significant impacts. This analysis is crucial for enhancing system stability and ensuring its efficiency.

Feedback Loops

Understanding feedback loops within a blockchain ecosystem is critical as they can significantly amplify or mitigate the effects of changes within the system. These loops can reinforce or counteract trends, leading to rapid growth or decline.

Reinforcing Loops

Reinforcing loops are feedback mechanisms that amplify the effects of a trend or action. For example, increased adoption of a blockchain platform can lead to more developers creating applications on it, which in turn leads to further adoption. This positive feedback loop can drive rapid growth and success.

Death Spiral

Conversely, a death spiral is a type of reinforcing loop that leads to negative outcomes. An example might be the increasing cost of transaction fees leading to decreased usage of the blockchain, which reduces the incentive for miners to secure the network, further decreasing system performance and user adoption. Identifying potential death spirals early is crucial for maintaining the ecosystem's health.

The Death Spiral: How Terra's Algorithmic Stablecoin Came Crashing Down
the-death-spiral-how-terras-algorithmic-stablecoin-came-crashing-down/, Forbes


The fundamental advantage of token-based systems is being able to reward desired behavior. To capitalize on that possibility, token engineers put careful attention into optimization and designing incentives for long-term growth.


  1. What does game theory contribute to blockchain token design?
    • Game theory optimizes blockchain ecosystems by structuring incentives that reward desired behavior.
  2. How do bonding curves apply game theory to improve token economics?
    • Bonding curves set token pricing that adjusts with supply changes, strategically incentivizing early purchases and penalizing speculation.
  3. What benefits do Layer 2 solutions provide in the context of game theory?
    • Layer 2 solutions leverage game theory, by creating systems where the threat of reporting fraudulent behavior ensures honest participation.

Token Engineering Process

Kajetan Olas

13 Apr 2024
Token Engineering Process

Token Engineering is an emerging field that addresses the systematic design and engineering of blockchain-based tokens. It applies rigorous mathematical methods from the Complex Systems Engineering discipline to tokenomics design.

In this article, we will walk through the Token Engineering Process and break it down into three key stages. Discovery Phase, Design Phase, and Deployment Phase.

Discovery Phase of Token Engineering Process

The first stage of the token engineering process is the Discovery Phase. It focuses on constructing high-level business plans, defining objectives, and identifying problems to be solved. That phase is also the time when token engineers first define key stakeholders in the project.

Defining the Problem

This may seem counterintuitive. Why would we start with the problem when designing tokenomics? Shouldn’t we start with more down-to-earth matters like token supply? The answer is No. Tokens are a medium for creating and exchanging value within a project’s ecosystem. Since crypto projects draw their value from solving problems that can’t be solved through TradFi mechanisms, their tokenomics should reflect that. 

The industry standard, developed by McKinsey & Co. and adapted to token engineering purposes by Outlier Ventures, is structuring the problem through a logic tree, following MECE.
MECE stands for Mutually Exclusive, Collectively Exhaustive. Mutually Exclusive means that problems in the tree should not overlap. Collectively Exhaustive means that the tree should cover all issues.

In practice, the “Problem” should be replaced by a whole problem statement worksheet. The same will hold for some of the boxes.
A commonly used tool for designing these kinds of diagrams is the Miro whiteboard.

Identifying Stakeholders and Value Flows in Token Engineering

This part is about identifying all relevant actors in the ecosystem and how value flows between them. To illustrate what we mean let’s consider an example of NFT marketplace. In its case, relevant actors might be sellers, buyers, NFT creators, and a marketplace owner. Possible value flow when conducting a transaction might be: buyer gets rid of his tokens, seller gets some of them, marketplace owner gets some of them as fees, and NFT creators get some of them as royalties.

Incentive Mechanisms Canvas

The last part of what we consider to be in the Discovery Phase is filling the Incentive Mechanisms Canvas. After successfully identifying value flows in the previous stage, token engineers search for frictions to desired behaviors and point out the undesired behaviors. For example, friction to activity on an NFT marketplace might be respecting royalty fees by marketplace owners since it reduces value flowing to the seller.


Design Phase of Token Engineering Process

The second stage of the Token Engineering Process is the Design Phase in which you make use of high-level descriptions from the previous step to come up with a specific design of the project. This will include everything that can be usually found in crypto whitepapers (e.g. governance mechanisms, incentive mechanisms, token supply, etc). After finishing the design, token engineers should represent the whole value flow and transactional logic on detailed visual diagrams. These diagrams will be a basis for creating mathematical models in the Deployment Phase. 

Token Engineering Artonomous Design Diagram
Artonomous design diagram, source: Artonomous GitHub

Objective Function

Every crypto project has some objective. The objective can consist of many goals, such as decentralization or token price. The objective function is a mathematical function assigning weights to different factors that influence the main objective in the order of their importance. This function will be a reference for machine learning algorithms in the next steps. They will try to find quantitative parameters (e.g. network fees) that maximize the output of this function.
Modified Metcalfe’s Law can serve as an inspiration during that step. It’s a framework for valuing crypto projects, but we believe that after adjustments it can also be used in this context.

Deployment Phase of Token Engineering Process

The Deployment Phase is final, but also the most demanding step in the process. It involves the implementation of machine learning algorithms that test our assumptions and optimize quantitative parameters. Token Engineering draws from Nassim Taleb’s concept of Antifragility and extensively uses feedback loops to make a system that gains from arising shocks.

Agent-based Modelling 

In agent-based modeling, we describe a set of behaviors and goals displayed by each agent participating in the system (this is why previous steps focused so much on describing stakeholders). Each agent is controlled by an autonomous AI and continuously optimizes his strategy. He learns from his experience and can mimic the behavior of other agents if he finds it effective (Reinforced Learning). This approach allows for mimicking real users, who adapt their strategies with time. An example adaptive agent would be a cryptocurrency trader, who changes his trading strategy in response to experiencing a loss of money.

Monte Carlo Simulations

Token Engineers use the Monte Carlo method to simulate the consequences of various possible interactions while taking into account the probability of their occurrence. By running a large number of simulations it’s possible to stress-test the project in multiple scenarios and identify emergent risks.

Testnet Deployment

If possible, it's highly beneficial for projects to extend the testing phase even further by letting real users use the network. Idea is the same as in agent-based testing - continuous optimization based on provided metrics. Furthermore, in case the project considers airdropping its tokens, giving them to early users is a great strategy. Even though part of the activity will be disingenuine and airdrop-oriented, such strategy still works better than most.

Time Duration

Token engineering process may take from as little as 2 weeks to as much as 5 months. It depends on the project category (Layer 1 protocol will require more time, than a simple DApp), and security requirements. For example, a bank issuing its digital token will have a very low risk tolerance.

Required Skills for Token Engineering

Token engineering is a multidisciplinary field and requires a great amount of specialized knowledge. Key knowledge areas are:

  • Systems Engineering
  • Machine Learning
  • Market Research
  • Capital Markets
  • Current trends in Web3
  • Blockchain Engineering
  • Statistics


The token engineering process consists of 3 steps: Discovery Phase, Design Phase, and Deployment Phase. It’s utilized mostly by established blockchain projects, and financial institutions like the International Monetary Fund. Even though it’s a very resource-consuming process, we believe it’s worth it. Projects that went through scrupulous design and testing before launch are much more likely to receive VC funding and be in the 10% of crypto projects that survive the bear market. Going through that process also has a symbolic meaning - it shows that the project is long-term oriented.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.


What does token engineering process look like?

  • Token engineering process is conducted in a 3-step methodical fashion. This includes Discovery Phase, Design Phase, and Deployment Phase. Each of these stages should be tailored to the specific needs of a project.

Is token engineering meant only for big projects?

  • We recommend that even small projects go through a simplified design and optimization process. This increases community's trust and makes sure that the tokenomics doesn't have any obvious flaws.

How long does the token engineering process take?

  • It depends on the project and may range from 2 weeks to 5 months.