The Emergence of In-Game Cryptocurrencies
Gaming

The Emergence of In-Game Cryptocurrencies

By Brennan | Crypto Investing | 29 Aug 2020


Nearly half of the world's population is set to be gamers by 2024, according to a report by ABI Research. Think of all the time, effort and energy expended by players worldwide in leveling up their characters, discovering items, and exploring new worlds. Imagine if that effort could be harnessed into a transparent and verifiable in-game currency. That's what several blockchain-based games are attempting to do with the launch of their own tokens. 

There are already some traditional games, such as Second Life, that have their own currencies, but the problem is that the control of the currency is ultimately in the hands of the developer, who has the ability alter the supply in an arbitrary manner. The benefit of launching a currency on an open and public blockchain is that the supply is transparent, and the balances of each account can be verified in a trustless manner.

There are several blockchain-based games that have already launched their own currencies. In this article, I'll cover some well-known ones including Decentraland's MANA, The Sandbox's SAND, and Axie Infinity's SLP token. Each of these currencies exist atop the Ethereum blockchain as ERC-20 tokens.

Decentraland (MANA)

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Decentraland was one of the first games to be released on Ethereum that allowed players to own the parcels of land that made up the entire map. Using the marketplace, parcels of land and "wearables" for in-game avatars can be bought and sold using the MANA token.

MANA was sold to investors during an Initial Coin Offering in 2017 that raised 26 million dollars. It now has a market cap of 144 million and is tradeable on several major cryptocurrency exchanges.

The Sandbox (SAND)

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Unlike Decentraland, The Sandbox is not an open world, but rather a map in which each plot has is its own contained area and the owners can create their own games.

The VoxEdit app allows players to create their own in-game items as Non-Fungible Tokens, and then sell them on the open market in exchange for the SAND token.

Axie Infinity (SLP)

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In Axie Infinity, players battle against each other to earn SLP tokens (Small Love Potions), which are required to breed new Axies in the game. 

They also have a currency called LUNA, which will be used for in-game purchases and fees. LUNA can be earned by having Axies harvest resources, defeat bosses, and win tournaments. 

As per a retweet on Axie's Twitter account, some players in the Philippines are earning upwards of $24 worth of SLP tokens per day by playing the game. This is more than a living wage is many countries:

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Scalability

All of the above mentioned in-game currencies are ERC-20 tokens sitting atop the Ethereum blockchain, which has recently suffered from slow transactions and high gas fees.

The developers of Decentraland and Axie Infinity are working on 2nd layer scalability solutions, so that their games can reach a wider audience and still remain responsive. Axie Infinity is planning to launch their own 2nd layer blockchain called "Ronin", and Decentraland has formed a partnership with 2nd layer blockchain project Matic.

Conclusion

As more of the world population enters into the gaming market, blockchain-based currencies are set to take off. By utilizing blockchain technology, developers will find new and innovative ways for players to capitalize on their skills and efforts. This industry is just in its infant stages, and has massive potential. 




Brennan
Brennan

Interested in computer science, economics, democracy and monetary theory. Supporter of projects that aim to bring more economic freedom to the world. Hoping to share knowledge that would help others navigate the crypto space.


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