Play-to-Earn (P2E) is a blockchain gaming model where players earn real-world economic value in the form of cryptocurrency tokens or NFTs through in-game activities, achievements, and competition. Unlike traditional games, where in-game assets have no external value, P2E games use blockchain technology to create true digital ownership: players own their in-game items as NFTs, and earned tokens can be traded on open markets for cryptocurrency or fiat. Axie Infinity (AXS/SLP on Ethereum/Ronin) popularized the concept in 2021, briefly becoming a primary income source for players in Southeast Asia and Latin America. The P2E model faces sustainability challenges, as tokenomics often rely on constant new player growth, creating economic models that collapse when user acquisition slows.
Origin & History
| Date | Event |
|---|---|
| 2017 | CryptoKitties introduces NFT game items with external value; proto-P2E |
| Feb 2018 | Axie Infinity launches on Ethereum; initially a niche crypto game |
| 2020 | COVID-19 lockdowns and scholarship programs begin driving Axie adoption in the Philippines |
| Feb 2021 | Axie Infinity migrates to Ronin sidechain; gas fees drop dramatically from peak Ethereum conditions |
| Nov 2021 | Axie Infinity reaches peak of approximately 2.8 million daily active users; surpasses OpenSea in NFT trading volume |
| Oct 2021 | Axie Infinity raises $152M at $3B valuation; Sky Mavis becomes first crypto gaming unicorn |
| Mar 23, 2022 | Ronin bridge hacked: $625M stolen, later attributed to North Korea’s Lazarus Group |
| 2022 | SLP token collapses; Axie earnings drop from roughly $50/day to cents; mass player exodus |
| 2022-2023 | GameFi broadly contracts; hundreds of P2E projects fail |
| 2023-2024 | P2E evolves toward “Play-and-Earn” with better tokenomics; AAA blockchain games emerge |
How It Works
Traditional Game Model:
Player spends money, game company profits, and players receive entertainment only.
P2E Game Model:
New players purchase Axies (NFTs) to enter, play and battle to earn SLP tokens, then either sell SLP on the open market for income or breed new Axies by burning SLP and AXS. Bred Axies can be sold as new NFT assets.
Scholarship System:
Scholars who cannot afford entry NFTs play under a guild or manager who owns the Axies. Scholars earn SLP and split it with the guild, typically 60/40 or 70/30. This model was particularly popular in the Philippines during 2021 when SLP earnings exceeded the local minimum wage.
Game Comparison:
| Game | Token | Chain | Peak Players | 2023 Status |
|---|---|---|---|---|
| Axie Infinity | AXS/SLP | Ronin/ETH | ~2.8M DAU | Greatly reduced |
| The Sandbox | SAND | Ethereum/Polygon | ~600K | Smaller, rebuilding |
| Decentraland | MANA | Ethereum | Low (disputed) | Near-defunct by on-chain metrics |
| Gods Unchained | GODS | Immutable X | ~100K | Active |
| Splinterlands | SPT/DEC | Hive/WAX | ~500K | Active |
In Simple Terms
Own what you earn: P2E gives players true ownership of in-game items as NFTs. Unlike traditional games where a developer can revoke your items, blockchain-based assets are yours regardless of game server status.
Tokens have real value: In-game currencies (SLP, SAND, GODS) trade on external exchanges. Players can convert gameplay time into real economic value, a fundamental shift from traditional gaming.
Scholarship model: Many P2E games require an initial NFT investment. Scholarship programs let players without capital borrow NFTs from guilds (investors), splitting earnings.
Unsustainable tokenomics: The core challenge is that if tokens primarily come from gameplay (minting) but only leave through trading, new players must constantly buy tokens for existing players to profit. When growth stalls, tokens inflate and collapse.
Evolution to sustainable models: “Play-and-Earn” or “play-first” models try to solve this by prioritizing gameplay quality and building in genuine token utility, reducing reliance on constant user acquisition.
Real-World Examples
| Scenario | Implementation | Outcome |
|---|---|---|
| Philippines Axie income | Player earns approximately $50/day in SLP during the 2021 peak | Supplements or replaces minimum wage income; COVID income alternative |
| Axie scholarship | Guild lends Axies to scholar; splits 70/30 SLP earnings | Scalable income source; YGG guild earns millions managing thousands of scholars |
| Ronin hack (Mar 23, 2022) | North Korean hackers steal $625M in ETH and USDC from the Ronin bridge | Catastrophic trust damage; SLP/AXS crash; most players exit |
| Decentraland metaverse reality | $1.3B market cap; virtual land sells for $900K | Very few daily active users by 2023 based on on-chain data; significant market cap vs. usage disconnect |
Advantages
| Advantage | Description |
|---|---|
| True digital ownership | Players own assets via NFTs; not deletable by the game company |
| Economic opportunity | Enabled meaningful income in developing countries during the peak |
| New game monetization model | Alternative to freemium/pay-to-win; players capture value |
| Interoperability potential | NFT items are theoretically usable across multiple games |
| Community governance | Token holders can participate in game development decisions |
Disadvantages & Risks
| Disadvantage | Description |
|---|---|
| Unsustainable tokenomics | Most P2E models require endless new players to sustain earnings |
| Play quality sacrificed | Emphasis on earning often compromises game design and fun |
| Token volatility | Earnings are highly dependent on token price; they can collapse to near-zero |
| Security risks | Game-specific bridges and chains introduce unique hack vectors (Ronin) |
| Regulatory uncertainty | P2E tokens may be classified as gambling or securities in some jurisdictions |
Risk Management Tips:
- Evaluate P2E games on gameplay quality first; sustainable projects must be fun independent of earning potential
- Calculate the break-even period at current and 50% lower token prices before investing in NFTs
- Avoid games with purely inflationary tokenomics; look for meaningful token sinks and deflationary mechanics
- Treat P2E NFTs as speculative, highly illiquid assets; do not invest amounts you cannot afford to lose
FAQ
Q: Is Play-to-Earn still viable in 2025?
A: The pure P2E model (play primarily to earn income) has largely collapsed. Survivors focus on genuine gameplay with earning as a secondary benefit. AAA-quality blockchain games with sustainable tokenomics represent the evolution of the model.
Q: What happened to Axie Infinity?
A: Multiple factors converged: SLP inflation from uncapped minting exceeded demand, crashing the token; the $625M Ronin bridge hack on March 23, 2022 destroyed trust; and the scholarship model collapsed when earnings fell below minimum wage in target markets. Axie pivoted to Axie Infinity Origins with new mechanics, though its player base remains a fraction of its 2021 peak.
Q: What is a guild in P2E gaming?
A: A guild (like Yield Guild Games) is an organization that acquires P2E NFTs and lends them to players (scholars) who cannot afford the entry cost. Scholars split earnings with the guild, typically 70/30 or 60/40. Guilds scale this model across thousands of scholars simultaneously.
Q: What is the “scholarship” model in P2E?
A: Scholarship programs emerged in Axie Infinity when entry NFTs cost $300 to $1,000 or more. Guilds lend these NFTs to aspiring players; scholars earn in-game tokens, keeping 60 to 70% while the guild takes the remainder. At peak, YGG and other guilds had thousands of active scholars.
Q: How is “Play-and-Earn” different from “Play-to-Earn”?
A: “Play-and-Earn” emphasizes that the game should be fun and engaging first, with earning as a secondary benefit. “Play-to-Earn” implied that earning was the primary motivation. The terminology shift reflects lessons learned from the collapse of purely earnings-driven game economies.
Related Terms
GameFi, Move-to-Earn (M2E), NFT (Non-Fungible Token), Axie Infinity, Yield Guild Games (YGG), Tokenomics
UPay Tip: The lesson from Axie Infinity’s collapse is that any game where “earning” is the primary reason to play will fail when token prices drop. Sustainable blockchain games must be fun enough that players continue playing even when earnings are zero, just as billions play traditional games without any financial incentive.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
