Leily R.
Leily R.
Nov 22, 2021

Things To Check Before Investing In A Gaming Crypto

tl;drWe are at the very early stages of crypto games, and currently, most crypto games follow a P2E model. The assets you earn with this model have real-life value and utility. As the crypto space grows, the games evolve and P2E will not be as relevant as it is today. The main issues with this model are that some players try to game with bots and duplicate accounts, and there's a massive gap between the number of people who play the game and investors who hold or trade the token alone.
Things To Check Before Investing In A Gaming Crypto
Things To Check Before Investing In A Gaming Crypto
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Introduction

Many assume that NFTs and gaming cryptocurrencies will be the primary key to benefit most from the Metaverse. They’re not wrong though; the current market capitalization of the Metaverse is $25,299,402,535, only less than one percent of the market capitalization of the entire cryptocurrency.

Current Stage of Gaming Tokens

We are at the very early stages of crypto games, similar to the 2000's gaming stage. Most crypto games follow a P2E (play-to-earn) model; you play and earn in-game assets. But with crypto P2Es, the assets have real-life value. Since we are at the very beginning of crypto gaming, the current games are simplistic; all you have to do is win a battle, breed a creature, mine material, etc., and by doing these tasks. The tokens can be converted to fiat currency or be used for purchasing other in-game assets. Axie Infinity is a good example of this model.

Axie Infinity

Axie Infinity is currently one of the largest gaming cryptos. However, you will need at least three Axies to join the game itself. Each Axie is an NFT that can be used to play the game or be bought or sold across exchanges outside the game. Depending on their abilities, these Axies can range in price anywhere from 0.035 ETH (around $150) up to 300 ETH (around $1.2 million), the most expensive Axie ever sold in late 2020. The amount of time it takes to profit from the investment could take longer than expected.

How to Make Money From Crypto Games

The key to making money from P2E games is to be early on the project and invest more significant amounts. As the crypto space grows, the games will evolve, and the P2E model will not be as relevant as today since new models will be introduced to the environment. The problem with these games is some players try to game with bots and duplicate accounts.

There's a long way to go before the true power of Metaverse is realized, and gaming cryptos unleash their full potential. The game mechanics are not that advanced yet, and the number of things you can do in the game is limited for now. There is a lot of room for growth in the industry, and much VC money is put in the space.

Mismatch Between Gamers and Holders

A less-known but impactful issue is a massive gap between the number of people who play the game and investors who hold or trade the token alone. Even though most of the crypto community is hyped over the games, in a lot of cases, there are a large number of speculators on the token alone, and there aren't many players compared to them. This gives an illusion of the game having a better performance than it has.

In the case of Decentraland, the number of users playing the game is around 1000 users. This isn't a massive amount of users compared to MANA holders (147,220 wallets at the time of writing). This is because people are buying the token for investment purposes, not for in-game utility. This is an essential factor you should check before entering a gaming crypto network. It tells you how valuable the token will be in the future and shows the quality of the ecosystem.

Games Shouldn’t Be Boring

Games need to be fun, and this universal rule isn't any different in crypto games. Crypto games can become mainstream because they become somewhere that makes players want to spend a lot of their time. The more the game keeps the player involved, the better the monetization will be. If the product is good enough, there's a high chance the game will go mainstream and flourish the Metaverse. 

Social Media Platforms are Your Tools

Before entering a crypto game, always check different social media platforms like Reddit and Twitter. Keep an eye on the project for a while; hear what people say about the game, ask away, interact with the community. This way, you can get the information you need before making investment decisions. You will also be updated frequently about the changes to the platform and how it is performing so far. 

Popular Gaming Projects With High Potential

These are some of the interesting gaming projects worth checking out. We have an individual blog post on each of them so that you can check them out for more details on each game.

Decentraland

Decentraland is one of the first virtual worlds in the crypto ecosystem. You can purchase virtual lands and places like casinos using NFTs. MANA is Decentraland's native cryptocurrency, and MANA holders can gamble and even work for casinos in return for more MANA. You can also buy Different accessories to customize your character. We have an entire article on Decentraland; you can check it for more information on the game.

Sandbox

Sandbox is very similar to Decentraland, but it is a game that was launched back in 2012 for tablets and mobile devices and had roughly 1 million active users from 2012 to 2016. It is a virtual world where you can build NFTs and sell them within the in-game marketplace. You can also create minigames and purchase in-game assets using the network's native token SAND.

Enjin

Enjin is a gaming cryptocurrency that allows game developers to create NFT gaming items and assign value to digital assets. The digital items have real-world utility as well. In 2020, it was announced that Minecraft servers and Enjin would have an integration that allows players to create Minecraft servers that can deliver Ethereum-based assets. It is called the EnjinCraft plugin, and with this plugin, Minecraft supports cryptocurrencies. You can check our article for more details on ENJIN.

We're not financial advisors and the content we're providing on Cryptologi.st is for educational purposes only. We believe that awareness is the key to successful investments, so we have gathered all the information you need in one place.

To learn more about different crypto and blockchain projects, check out our website.

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