Building Sustainable Web3 Games with Owned Liquidity & Tokenized Assets

Part of the magic of Web3 gaming is the ability for players to cash out their in-game work. So far, though, most play-to-earn games rely on attracting new players to make this possible.

The most famous example is Axie Infinity. In order to play, prospective gamers have to buy or rent an Axie from an existing player. The game economy works because new players buy Axies from old players in hopes of reselling those Axies to newer players who join after them. 

This might seem like a good idea on the surface, but it’s not a very sustainable dynamic. For one, it favors investors not gamers. Breeding isn’t a very fun game, but it’s where most of the revenue (and incentive) for Axie players comes from. For another, it builds the in-game economy on a very shaky foundation. Once the flow of new players stops, the demand for new characters stops, the demand for breeding stops, and the demand for the token that facilitates breeding stops. The whole thing collapses. No bueno.

So the question for crypto gaming is: how to create a game that is fun to play, rewards gamers for their hard work, and generates enough revenue to fund continued development? 

Ideally, the primary revenue driver should be in-game activity amongst existing players. Not selling new characters to new players, since then the health of the game depends on attracting greater and greater numbers of players.

One elegant method is through the combination of tokenized game assets and protocol owned liquidity. This is what we’ve started doing with Crypto Raiders, and so far it’s working quite well.

Tokenized Game Assets

Tokenized game assets are the first important innovation for Web3 gaming. When someone plays Crypto Raiders, they own their Raiders as NFTs, and they can sell those Raiders on the market at any time. If they level them up, and get good gear then those Raiders become more valuable.  A leveled, geared up character often sells for 3-4x the price of a new recruit.