As we know, many P2E and blockchain games are on the market. The market is projected to reach an impressive $301.53B by 2030, meaning a CAGR of 68.3% from 2023 to 2030.
However, as many pop up on the market, as quickly as they fade within the dark forest of the internet, whereby consumers nowadays wouldn’t settle for less; thus, they look for authenticity, sustainability, and an overall mission and vision that align with their core values.
Therefore, now more than ever, the P2E industry must include utility crypto tokens to drive growth sustainably, with a twist of a snowball effect.
Today’s article discusses everything you need about the P2E and the crypto utility token dilemma.
What is P2E?
P2E is a type of crypto and blockchain gaming that rewards its players for their in-game efforts and achievements. Depending on the game and overall project, the rewards can be real-world assets, gaming assets, tokens, and more.
Due to its decentralization and immutability, the P2E Games are blockchain or Web3-based, thus flourishing and becoming the revolutionary frontier within the GameFi sector.
What Does it Have to Do With Utility Crypto Tokens?
Well, everything! As players strive to secure their in-game achievements, the game must equip their crypto with utility for sustainability and long-term success. That makes sense, right?
However, utility extends beyond cryptos and can be applied to Non-Fungible Tokens and DeFi.
Thus, P2E becomes more about the revenue potential and less about endless hours of grinding.
But What Is a Utility Token?
Utility crypto tokens are blockchain-based tokens with a specific use, meaning they aren’t a universal crypto financial tool. Thus, they aren’t subject to the same regulations as securities.
Crypto utility tokens are the backbone of P2E games. These digital assets have specific functions within the game’s ecosystem and drive player engagement.
Critical Aspects of Crypto Utility Tokens in P2E Games
1. In-Game Currency
The P2E crypto tokens can purchase items, characters, or upgrades within the game.
2. Governance
Often, players can use tokens to vote on game development decisions, giving them a say in the game’s future.
3. Rewards
When players and even developers think of P2E tokens, some of them only imagine the rewards earned by players for completing tasks, winning matches, or achieving milestones.
But here’s the catch with utility crypto tokens: if a project manages to move beyond this basic level and harnesses the power of the community, long-term success can only be achieved.
4. Staking
Players can lock up their tokens to earn rewards, contributing to the game’s economy.
5. NFT Creation or Minting
Some games even allow players to use tokens to create or mint NFTs, driving even more utility around its native token.
How Utility Crypto Tokens Drive P2E Economy
Player Incentives
When players can earn tokens for their in-game actions, they keep playing because they can use them to acquire valuable items or convert them to real-world currency.
For example, in the popular P2E game PawFury, players can earn the native $PAW tokens by battling the Pollution Monsters in PawFury. Then, the $PAW tokens can be used to purchase skins, weapons, power-ups, etc.
Game Economy Balance
The tokens’ supply and demand influence in-game prices and item values, creating a dynamic system where players’ actions can influence the game’s overall economy.
For example, if many players suddenly start selling their tokens, the value of the tokens could drop, making it more affordable for other players to purchase items. Still, it could discourage players from continuing to play if they feel their tokens aren’t worth much.
On the other hand, if there is a high demand for tokens and a limited supply, the value of the tokens could increase, incentivizing more players to start playing the game to earn tokens.
And this leads us to tokenomics, the lifeblood of P2E games.
A well-designed tokenomics model is essential for the long-term success of a P2E game. It ensures the token’s value proposition, incentivizes player participation, and maintains a healthy in-game economy.
By understanding a game’s tokenomics, players can make informed decisions about investing time and resources. Moreover, a robust tokenomics model can attract investors and foster a thriving community around the game.
Thus, the game’s developers must carefully consider the supply and demand of tokens to maintain a healthy in-game economy.
Community Building
Some P2E games allow players to vote on game development decisions using their tokens, giving players a sense of ownership and influence over the game’s future.
This way, the P2E game can help foster a strong community of players invested in its success.
For example, in PawFury, a participant might have to clean up an oil spill in the virtual world. After completing the task, a certain percentage of their in-game reward would go to a real-world organization focusing on cleaning oil spills. Pretty neat, right?
Final Thoughts
So, whenever you want to choose a P2E game, look at the utility crypto token and consider tokenomics, governance, staking options, and others. A well-structured token economy and a clear utility proposition can open doors to a long-term and successful P2E game.
This article was originally Posted on Coinpaper.com
