Play-to-earn brings much-needed change to the gaming industry

Maciej Zieliński

29 Dec 2021
Play-to-earn brings much-needed change to the gaming industry

Play-to-earn may be the hottest word in the whole gaming industry. Check how you can join the trend that rocks players all around the globe!

Earing by playing games isn’t necessarily a new idea. Even 20 years ago best players of such games as Diablo II or Runescape were able to make money on selling digital assets they acquired during the game. Not to mention the professional players, who in the last decade became able to generate significant profits from their e-sport activity. 

Yet, through time many new restrictions emerged, making earning from playing more and more difficult for amateur players. Of course, solutions such as Steam marketplace are available. Yet, they are not free from burdensome limitations. For example, on Steam it’s not possible to withdraw money from your account. Other ways of trading in-game assets, which involved less popular or not adapted platforms, often fail when it comes to security. 

NFTs may give us a chance to change it. And everything indicates that players are interested. 

What does play-to-earn mean?

Essentially play-to-earn refer to earning real profits just by… playing. Simple, right? As we mentioned the core idea isn’t new. Yet, it is thanks to modern solutions such as NTF, that this phenomenon may be facilitated for the broader audience.

Currently, play-to-earn is most often used in the context of so-called crypto games. These gaming platforms allow their users to earn their native cryptocurrency during the game. For example, users can get tokens for winning fights or selling limited items. Eventually, those tokens can be exchanged for other cryptocurrencies or fiat money.

Why are investors interested in launching their own crypto games? With the growth of the game’s environment, the value of the game’s native currency increased as well. The more players game has, the more transactions are facilitated in-game, and eventually the higher demand for the currency is. 

Play-to-earn gaming and crypto games are two phenomenons highly connected with each other. Hence, to bring closer the first one, we will also discuss the second.

Crypto games

Crypto games are without a doubt the hottest trend in the Blockchain industry. Despite a modest start, crypto games slowly became one of the most revolutionizing factors in the modern gaming landscape. From CryptoKitties, through NBA Top Shot, to Axie Infinity - crypto games from simple collectible games have grown into revolutionary projects, which influence goes far beyond the gaming industry. How was it possible? All thanks to NFT tokens…

Yes, that’s right. You hear about NFT almost everywhere. Collins dictionary even named NFT the Word of the Year for 2021! But among all NFT’s implementations, one seems to be particularly exciting for blockchain entrepreneurs - games. Recent events, such as Immutable X’s ICO, show us how important this branch became for the whole industry. 

How NFTs may be used in video games? Below we briefly described that issue. 

What are NFTs?

NFTs - 2021 was definitely their year. Spectacular events, such as record-breaking art sales, incredibly expensive virtual land plots, or fashion icons launching their own NFT collections made headlines all across the globe. Here you can find more about particularly significant NFT projects from 2021. But besides a buzzword, what exactly are NFTs? 

NFT stands for non-fungible token. Non-fungibility means that every token in the system is unique. NFTs don’t have a common value and often do not allow for an equal exchange (NFT for NFT). Each token represents unique information of ownership or identity.  

Among various blockchain token types, we differentiate between fungible and non-fungible tokens. (You can read here more about token types) Examples of the first kind are Bitcoin or Ether. Fungible means that a single token is indistinguishable from others in the same ecosystem. Just like in regular currency. Thus, they can be used for payment transactions. 

Although NFT tokens became popular just recently, they’ve been with us for much longer. First, and still most popular NFT standard - ERC was created in 2016. Yet, for a long time, NFTs were left in the shadow of their fungible counterparts. This year delivered dozens of groundbreaking projects that changed this trend. 

NFT games 

NFT games are almost as old as NFTs themselves. After all their first commercial usage was a game: CryptoKitties. The game allows players to buy, collect, and sell virtual kitties, which are saved on blockchain as NFTs. Since the game’s debut in 2017, its creators - Dapper Labbs made over $40 million on it. 

CryptoKitties were the first game of this kind which started a whole new trend. Yet, the recent projects enabled us to unlock the true potential of NFT, which goes far beyond simple collectibles.

NFT and gaming assets 

Everywhere where users collect and trade virtual gaming assets, NFTs can highly improve their gaming experience. Essentially, they assure players about the authenticity and scarcity of gaming assets and allow them to keep full ownership of the purchased assets. 

As an example, let’s take multiplayer games like the aforementioned LOL or Fortnite. Possessed skins and champions are of great importance to the players. What if the players had complete control over the ownership rights to their game assets?

Play-to-earn gaming

Ok, all of that sounds tremendous. But what the whole industry is talking about are play-to-earn possibilities that NFTs bring. As creators of one of the top NFT games - God’s Unchained, say: “You don’t own assets if you can’t sell them”. This is the main idea behind the majority of NFT games right now. Their game itself is one of the projects that aim to enable players to earn on in-game assets saved as NFT. But how exactly do NFTs facilitate play-to-earn?

Let’s imagine an online card game where users unclocked new characters and equipment by participating in a quest and winning fights. What if they would like to sell their character? Many games of this type actually allowed players to do so. Yet, often it’s only possible in exchange for the game’s coins which don’t represent any real value. Furthermore, such coins are usually characterized by the same problem as any other in-game assets - players don’t possess any ownership rights to them.

As we mentioned before, NFTs are unique digital assets that represent encoded information about their identity and ownership. There is a thing with blockchain: changing such data requires consensus reached among every node. In practice, it means that NFTs can be considered as authenticity and ownership certificates of themselves. Moreover, every action involving NFT is extremely treatable and secured against fraud. 

Therefore, saving in-game assets as NFTs allowed players to possess ownership rights to them. Such assets can be traded on both internal and external marketplace. Sometimes for fiat currencies or popular cryptocurrencies, sometimes for the game’s native tokens, which then can be eventually exchanged for “real money”. This is how NFT may unlock true play-to-earn possibilities in numerous types of games. We listed just a few of them: 

Games’ native tokens are another phenomenon that deserves our attention. In contrast to the usual game’s coins, those tokens can be listed on external exchanges, and represent particular value even outside the game. Why? In case of their case, fungible tokens are used. Therefore, essentially we can speak about game-specific cryptocurrencies. What’s important for games’ creators, those tokens gain value, with the game ecosystem’s growth. 

Scarcity is nothing new for the gaming industry. Unique skins, armors, and other digital assets are commonly present in it almost from the begging. Through the years different markets have been created to facilitate users’ trade. Yet, there were always limitations. For example, usually direct exchanges to “real money” were impossible. NFT may change that for good. 

As we mentioned, gamming assets saved as NFT can be traded on both internal and external marketplace. The same goes to games’ native currencies. What’s important, this trade can be decentralized. 

It needs to be noted that behind video games stands an industry worth over $330 billion. Play-to-earn gaming my by a way to share part of this spectacular growth with players. 

The new generation of embed finance?

Although paying a real-life rant fee in game’s coins may sound absurd, it already happens. Axie Infinity is a blockchain game that enables players to earn native tokens by winning fights and selling avatars. Eventually, those tokens can be exchanged for other cryptocurrencies or fiat money on external exchanges. Therefore, without a doubt we can speak about the truly play-to-earn game.

Yet, what’s unique about Axis is the unpredicted implementation of the game’s native tokens that emerged in the Philippines, where the game has 40 % of its players. According to Sky Mavis for 25% of Axie's players, the game's wallet is the first financial service they’ve been able to access. Arianna Simpson, a partner at Andreessen Horowitz - one of Axie's main investors, claims that in some places in the Philippines people are even paying their rent with the game’s tokens.  

Most popular play-to-earn games

Play-to-earn games: Axie Infinity
Play-to-earn games: Axie Infinity

Axie Infinity

The public heard about Axie Infinity for the first time after the spectacular sale of a digital land plot. In February 2021, user Flying Falcon bought eight genesis plots worth approximately $1.5mln. This event may be considered a milestone for the NFT market. But what is so special about Axie Infinity?

Axie resembles Pokemon, but on a Blockchain. The core of the game is combat between cartoon characters - Axies. What differentiates Axies from Pokemons is the fact that they are NFTs stored on the game’s Blockchain. Essentially they are NFTs-based digital creatures.

To create new characters, players “breed” them using the game’s native token, which can be earned through the game or bought from an exchange. By selling Axies or winning fights, players earned the currencies. Then they can sell them on the open market, making a profit.

Currently, dedicated players earn as much as thousands of dollars a month playing Axie Infinity. 

Play-to-earn games: God's Unchained
Play-to-earn games: God's Unchained

God’s Unchained 

If you are up to date with the ICOs’ world, without a doubt, you’ve heard about Immutable X. Get to know the blockchain game created by its godfathers.

Gods Unchained is a trading card game that aims to give its players complete ownership over in-game items by using NFTs. Essentially its players collect digital playing card NFTs

Their motto is, “If you can’t sell your items, you don’t own them.” Thus the game allows users to sell their cards and other items for native GODS tokens, which can be exchanged for fiat money. 

It’s worth noting that God’s Unchained remains a free-to-play game. Cards can be unlocked simply by playing the game. Therefore Gods Unchained should be considered one of the truly play-to-earn games, which stands contrary to the standard model of gaming commerce.

Play-to-earn games: The Sandbox
Play-to-earn games: The Sandbox

The Sandbox

The Sandbox is one of the NFT-based games that created their own metaverses. To date, it is one of the most popular NFT games for creating and trading in-game assets.

Like Minecraft or Roblox, this NFT game is voxel-based and offers an excellent opportunity to free users’ creativity. The Sandbox provides them with tools for creating and animating NFT objects that can be used in-game or sold on designed markets. But that’s not all - on the platform, users can also develop and play their games. Since users are able to make real money on their creations, The Sandbox is another example of play to earn the game.

Does play-to-earn gamming predicts how metaverse will look like

It’s no secret that many NFT games describe themselves as blockchain-based metaverses. Just take Sandbox as an example. According to many similar models of transection that we can observe in NFT games will be also present in metaverses. Without a doubt, there are significant factors that make them suitable for that purpose. 

Business model for play-to-earn game
The business model for play-to-earn game

Implementing play-to-earn model

If you consider launching your own NFT game that will facilitate a play-to-earn model, you should be aware that its success requires skills and knowledge regarding both the technical and business sides of the Blockchain industry. That’s why many projects decide to hire an external blockchain company as a technological partner.

At Nextrope, we can call ourselves pioneers of Blockchain technology in CEE. We conducted one of the first tokenization in the world and since that we keep up to date with the industry. NFT games aren’t an exception. 

Do you want to know how Nextrope’s team can boost your NFT game on a new level? Feel free to contact our specialists who will gladly answer all your questions.

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The Economy of Aleph Zero (AZERO)

Karolina

22 Feb 2024
The Economy of Aleph Zero (AZERO)

The evolution of blockchain technology has brought forward numerous platforms aiming to solve various challenges in the digital world. Among these innovations, Aleph Zero stands out with its unique approach to creating an economically viable ecosystem through thoughtful tokenomics and incentives. This article delves into the economy of Aleph Zero, focusing on its native token, AZERO, to understand how it sustains growth, incentivizes participation, and ensures long-term viability.

MUST READ: "What is Aleph Zero"

Understanding AZERO Tokenomics

Key Metrics and Distribution

  • Ticker: AZERO
  • Type: Utility
  • Circulating Supply: 257,990,631
  • Total Supply: 354,678,137
  • % Staked: 71%
  • # of Wallets: 207,370
  • Inflation: 30,000,000 AZERO per year
  • Market Cap: $410,598,781

Allocation and Use Cases

  • Aleph Zero Foundation. 23% of the tokens are allocated for research, development, marketing, operations, ecosystem incentives, and other expenses.
  • Team Allocation. 10% of the tokens, with 80% locked for one year and vested over four years.
  • Funding Rounds. Details on the pre-seed, seed, Early Community round, public presale, and public sale distributions.
  • AZERO Utility. The AZERO coin powers the Aleph Zero ecosystem by being used for validator node staking, DEX swap fees, collateral for wrapped assets in Liminal, fees for asset-wrapping and bridging on Liminal, network fees, and governance voting processes.

The Role of Inflation in Aleph Zero's Ecosystem

Inflation is often viewed negatively in traditional economic contexts, associated with diminishing purchasing power and economic instability. However, in the realm of blockchain ecosystems like Aleph Zero, inflation serves as a pivotal mechanism for fostering sustainable growth, incentivizing network participation, and ensuring the long-term viability of the platform. This article explores the nuanced role of inflation within Aleph Zero's ecosystem, detailing its introduction, benefits, and governance.

Introduction of Inflation

Aleph Zero has introduced a systematic annual increase of 30 million AZERO tokens to its circulating supply, a decision rooted in the desire to sustain and nurture ecosystem growth. This inflationary mechanism is not merely a tool for increasing token supply but a strategic approach to enhancing the network's security, scalability, and development. By carefully calibrating the rate of inflation, Aleph Zero aims to balance the need for rewarding network participants with the imperative of maintaining the token's value over time.

Benefits of Inflation

The introduction of inflation within Aleph Zero's ecosystem serves multiple critical functions, each contributing to the platform's overarching goals:

  • Incentivizing Validators and Nominators. Validators and nominators play a crucial role in securing the Aleph Zero network through the proof-of-stake consensus mechanism. Inflation provides these participants with financial rewards for their efforts, encouraging continued engagement and investment in the network's health and security.
  • Funding Ecosystem Treasury. A portion of the newly minted AZERO tokens is allocated to the ecosystem treasury each year. These funds are instrumental in supporting ongoing development projects, marketing initiatives, operational expenses, and other activities that contribute to the ecosystem's growth and sustainability.
  • Supporting Long-Term Holding. By distributing inflation rewards primarily to those who stake their tokens, Aleph Zero encourages long-term holding over speculative trading. This strategy aims to reduce market volatility and foster a stable economic environment conducive to gradual growth.
https://youtu.be/y-FypMbm0BM

Inflation Mechanism and Governance

Validators and Nominators

At the heart of Aleph Zero's security and efficiency are its validators and nominators, who ensure the integrity of transactions and the network at large. Inflation directly supports these roles by compensating participants for their staked tokens and the risks associated with securing the network. This compensation not only rewards current participants but also attracts new validators and nominators, enhancing the network's decentralization and resilience.

Ecosystem Treasury

The ecosystem treasury represents a vital component of Aleph Zero's inflation strategy, receiving a dedicated portion of the annual inflation to fund various initiatives. These initiatives range from research and development to community engagement programs, all aimed at bolstering the ecosystem's health and competitiveness. The treasury's role is pivotal in allocating resources efficiently to areas that promise the most significant impact on Aleph Zero's growth and user adoption.

Decentralized Governance

A key aspect of Aleph Zero's inflationary policy is its commitment to decentralized governance. The platform envisions a future where token holders can vote on critical decisions, including adjustments to the inflation rate. This participatory approach ensures that the inflation mechanism remains responsive to the ecosystem's evolving needs, balancing the interests of various stakeholders to support the platform's long-term success.

MUST READ: "Aleph Zero vs Solana"

Regulatory Compliance and Market Presence

  • FINMA No-Action Letter: Aleph Zero’s compliance with Swiss law and the implications for its operation and token issuance.
  • Market and Wallets: Insights into Aleph Zero’s market presence, including exchanges and wallet statistics.

Key Takeaways

Conclusion

The economy of Aleph Zero showcases a thoughtful approach to creating a sustainable and growing blockchain ecosystem. Through strategic token allocation Aleph Zero is poised to contribute significantly to the blockchain landscape. As the platform evolves, its economic strategies will likely serve as a benchmark for future blockchain projects.

If you are interested in utilizing Aleph Zero, Solana or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

FAQ

How is the AZERO token distribution structured?

  • The distribution is designed to support the ecosystem's growth, with allocations for stakeholders and strategic initiatives.

What role does inflation play in the Aleph Zero ecosystem?

  • Inflation is used strategically to incentivize network participation and ensure sustainability.

What is the utility of AZERO tokens within the Aleph Zero ecosystem?

  • AZERO tokens power the Aleph Zero ecosystem (validator node staking, DEX swap fees, collateral for wrapped assets in Liminal, fees for asset-wrapping and bridging on Liminal, network fees, and governance voting processes).

How does Aleph Zero handle inflation and its impact on the ecosystem?

  • Aleph Zero introduces a systematic annual increase of 30 million AZERO tokens to encourage ecosystem growth, incentivize participation, fund the ecosystem treasury, and support long-term holding by distributing inflation rewards mainly to stakers, aiming to balance growth with token value maintenance.

Aleph Zero vs Solana: A Comparative Analysis

Karolina

22 Feb 2024
Aleph Zero vs Solana: A Comparative Analysis

Blockchain ensures unparalleled security, transparency, and efficiency across various sectors. Within this innovative landscape, Aleph Zero and Solana have carved their niches, emerging as leading blockchain platforms. This article delves into a comparative analysis 'Aleph Zero vs Solana', aiming to illuminate their distinct features, technological advancements, and potential applications.

Understanding the Basics

Aleph Zero

ALEPH ZERO WHITEPAPER

  • Brief History and Development: Originating from a vision to enhance privacy and scalability in blockchain, Aleph Zero quickly ascended as a notable contender. Its development team focused on creating a platform that merges traditional blockchain benefits with advanced privacy features.
  • Core Technology and Consensus Mechanism: At its core, Aleph Zero utilizes a Directed Acyclic Graph (DAG) combined with a unique consensus algorithm. This innovative approach not only ensures transactions are processed swiftly but also maintains high security and privacy standards.

Solana

SOLANA WHITEPAPER

  • Brief History and Development: Solana was born from the ambition to solve the blockchain trilemma: achieving scalability, security, and decentralization without compromise. Its rapid growth is attributed to its ability to cater to high-demand applications, from decentralized finance (DeFi) to non-fungible tokens (NFTs).
  • Core Technology and Consensus Mechanism: Solana introduces the Proof of History (PoH) consensus mechanism, a groundbreaking innovation that allows for timestamping transactions in a sequential manner. This, combined with its underlying blockchain structure, enables Solana to process transactions at lightning speeds, setting new standards for efficiency in the blockchain domain.

The journeys of Aleph Zero and Solana, though distinct, converge on a shared goal: to redefine the capabilities of blockchain technology. Through their innovative approaches to consensus mechanisms and core technologies, both platforms offer unique solutions to the challenges facing traditional and digital markets today. Their contributions to the blockchain landscape not only highlight their individual strengths but also underscore the diverse potential of blockchain technology as a whole.

MUST READ: "What is Aleph Zero - Key Features"

Key Features Comparison - Aleph Zero vs Solana

Scalability

  • Aleph Zero: Tackles scalability through its DAG-based consensus, allowing parallel transactions that increase scalability.
  • Solana: Achieves high scalability with its PoH consensus, efficiently handling thousands of transactions per second (TPS).

Transaction Speed and Throughput

  • Aleph Zero: Boasts fast transaction speeds due to its lightweight consensus mechanism, aiming for efficiency without sacrificing security.
  • Solana: Known for its exceptional speed, Solana processes up to 65,000 TPS, setting a benchmark in blockchain throughput.

Fees

  • Aleph Zero: Offers low transaction fees, making it attractive for both high-volume transactions and micro-transactions.
  • Solana: Despite its high throughput, Solana maintains competitively low fees, further enhancing its appeal for developers and users alike.

Smart Contracts and DApp Development

  • Aleph Zero: Supports smart contracts and DApp development, focusing on privacy and scalability within its ecosystem.
  • Solana: Provides robust support for DApps and smart contracts, powered by its high-speed blockchain, ideal for complex applications.
Aleph Zero vs Solana

Use Cases - Aleph Zero vs Solana

Aleph Zero

  • Best Suited For: Privacy-focused applications, financial services requiring high security, and scalable enterprise solutions.

Solana

  • Shines In: High-frequency trading platforms, decentralized finance (DeFi) applications, and NFT marketplaces demanding fast transactions.

Performance Analysis

Network Speed and Efficiency

  • Aleph Zero: Demonstrates efficiency with its innovative consensus, ensuring quick and secure transactions.
  • Solana: Outpaces many with its network speed, attributed to the PoH mechanism, ensuring both rapid and consistent transaction processing.

Scalability Solutions

  • Aleph Zero: Continuously explores advancements in DAG technology to enhance its scalability solutions.
  • Solana: Plans to further optimize its infrastructure, ensuring it remains scalable amidst growing demand.

Security Aspects

Consensus Mechanisms

  • Aleph Zero: Its unique consensus mechanism prioritizes security, aiming to prevent attacks while maintaining speed.
  • Solana: Solana's PoH consensus is designed with security in mind, preventing double-spending and ensuring transaction integrity.

Known Vulnerabilities and Responses

  • Aleph Zero: Responds to vulnerabilities with timely updates, emphasizing its commitment to security and privacy.
  • Solana: Has faced challenges, including network congestions and DDoS attacks, but has responded with enhancements to its network resilience.

Through this comparative analysis, it becomes evident that Aleph Zero and Solana each bring distinctive strengths to the blockchain arena. Their approaches to scalability, transaction speed, fees, and smart contract capabilities cater to different needs within the blockchain ecosystem. Moreover, their targeted use cases and ongoing efforts to enhance performance and security underscore the dynamic and evolving nature of blockchain technology.

Conclusion

In conclusion, the comparative analysis between Aleph Zero vs Solana reveals two highly innovative and efficient blockchain platforms, each with its unique strengths. Aleph Zero focuses on privacy and scalability, making it ideal for applications requiring robust security measures. Solana, on the other hand, excels in transaction speed and throughput, positioning it as a top choice for high-frequency trading and DeFi applications.

If you are interested in utilizing Aleph Zero, Solana or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

FAQ

What are the main differences between Aleph Zero and Solana's consensus mechanisms?

  • Aleph Zero uses a Directed Acyclic Graph (DAG) combined with a unique consensus algorithm for high security and privacy, while Solana employs Proof of History (PoH) for high-speed transaction processing.

How do Aleph Zero and Solana compare in terms of transaction speed and scalability?

  • Aleph Zero focuses on scalability with its DAG-based consensus allowing parallel transactions, while Solana is known for its exceptional speed, processing up to 65,000 transactions per second.

What are the targeted use cases for Aleph Zero and Solana?

  • Aleph Zero is best suited for privacy-focused applications and scalable enterprise solutions, whereas Solana excels in high-frequency trading platforms, decentralized finance (DeFi) applications, and NFT marketplaces.

How does the developer community size and support compare between Aleph Zero and Solana?

  • Readers might be curious about the size of the developer community, availability of development tools, and the level of support provided to developers in both ecosystems.

What are the environmental impacts of Aleph Zero vs. Solana?

  • Given increasing concerns about sustainability, potential users may question the energy consumption and environmental footprint of both blockchain platforms.