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Sustainable GameFi: To Play or To Earn?

2021.12.16  •  11 min read
Blog post image.

This article is published and written by Alvin Kan and Lee Zhu from the BNB Chain Core team. Opinions and views expressed in this article do not necessarily represent the views of other authors and members of the BNB Chain Core team.


Blockchain games are a concept that already appeared in the past but caught the wider public's attention just this year. It has become one of the biggest crypto trends and attracted millions of new users to cryptocurrencies flocking to try one of the dozens of games.

Blockchain games come in the same genres and game styles as mainstream games. Turn-based strategies, farming simulators, Battle Royale, or sports games, and you can find them on almost every network, including Bitcoin's Lightning Network.

Blockchain users per category across all tracked blockchains. Source: DappRadar

Most existing blockchain games are entirely built on blockchain, with every in-game interaction as a transaction. This is the prevailing infrastructure model, clearly visible over the past weeks when gaming reached its latest traffic all-time high.

Still, some games utilize blockchain only in specific parts of the in-game environment, with in-game interactions occurring outside of the blockchain. To illustrate such a game, imagine FIFA22 with NFT player cards and a blockchain marketplace to trade them.

The most popular type of blockchain games is GameFi, a unique merger of Gaming and Decentralized Finance that allows players to have fun while earning valuable rewards in the form of tokens, NFTs, or other digital assets - Play to Earn. GameFi projects are specific in that the player's primary goal is to earn.

Arguably, this was made possible by the emergence of new Layer 2 blockchains and high-performance Layer 1 blockchains that provide the necessary infrastructure to support blockchain gaming - fast transactions with low costs to achieve satisfactory gameplay and user experience.

The idea to combine blockchain and games is logical at its core; gamers are tech-savvy, familiar with digital currencies, and understand the value of in-game assets such as characters, collectibles, or skins.

According to, there are currently over 210 games running on BNB Chain, serving on average 890k* players every day. On BNB Chain alone, the market cap of the top 10 games stands at almost $1bn.

*assuming 10% overlap between players between games, across the last rolling 28 day period

BNB Chain is becoming one of the best blockchains to pilot and validate the new business models of GameFi. However, quite a few Games can stand out here to continuously attract users and maintain steady economics.

In the blog, we shared several key observations and suggestions on Tokenomics and Gameplay perspectives to build a more sustainable GameFi project.

Tokenomics in GameFi

Blockchain allows games to create their own micro-economies based on tokens. The game can use these tokens as an in-game currency like Warcraft's Gold or Runescape's GPs, as in-game energy for fighting or casting spells, or as payment currency on their marketplace. The possibilities are unlimited and allow a diversity of economic models.

Token economics, or tokenomics, is the science of token economy. It observes and analyses a collection of factors that affect the supply and demand characteristics of tokens and their value and utility and aims to design a sustainable, fair, and attractive token economy.

With some games, tokenomics don't play a significant role or any (if they don't have a token), but for GameFi, good tokenomics are critical to a game's success.

In addition, GameFi makes tokenomics one step more complicated by adding the game model with a circular and self-sustainable economy.

Multi vs. Single-token Economics

Single-token economics can be understood as using one token for everything - governance, in-game token & currency, etc. The paradox with single-token economics is that players must spend the same token they want to earn by playing the game. If the token price is too high, players might be hesitant to spend; if the price is too low, the players lose interest in playing.

More projects started building their tokenomics on dual or multi-token for this and other reasons. In the case of dual-token economies, the primary token would usually be a governance token and the secondary token in-game. The secondary token may not even need to be on the blockchain (i.e., virtual currency).

If only the primary token is traded on exchanges and valued in fiat, we can reduce the influence of the secondary market on the in-game token and the game itself. If implemented correctly, the dual-token model can allow the players to play the game unaffected by primary token prices and fluctuations.

Multi-token economies also provide opportunities to support different types of in-game interactions such as infra-token conversions, token mixing for character progress or crafting, etc.

Based on our observation, either multi-token or single-token can build a sustainable tokenomics. The key factors are still the token distribution and its utility.

Fixed vs Oracle (Variable) Pricing System

Blockchain Oracles are nodes that provide blockchain with data from external systems, allowing smart contracts to execute based on inputs and outputs from the real world, off-chain.

In GameFi, they can be used to, in some sense, peg in-game transactions to a token's fiat price. This means that the token cost of in-game interactions will fluctuate according to the token's USD price.

Oracle pricing system helps to keep entry costs low and fixed because it's pegged to a FIAT value, but it affects gameplay during periods of volatility due to reward pay-outs (in-game tokens) being pegged to FIAT value too.

If a fixed pricing system is used, it is easier to estimate the rewards for players, but it could price new players out if the price spikes up.

Notably, a couple of high-profile collapses in GameFi have relied on Oracle Pricing. However, the GameFi landscape is maturing, and it remains to be seen which pricing system is more suitable for games.

Key Consideration in Tokenomics Design

Token Distribution

The token distribution must be at the absolute core of every sustainable and fair tokenomics model. Token distribution is how games distribute their tokens between different stakeholders - team salary, public and private investors, operating expenses, and players.

As the two distribution charts above illustrate, there's a clear distinction between profit and community-oriented distribution models. Game A allocated the majority of tokens to Team and Sale, while Game B allocated 50% of their tokens to players' Rewards Pool.

It should be noted that poorly structured or unfair token distribution might cause irreversible damage and collapse the whole project while hurting the players and the community. Once tokens are distributed, it's complicated to change the tokenomics without adverse consequences or affecting the community.

Rule#1: Having a fairer distribution that leans towards the community tends to get more support and loyalty. Community is everything - without a strong community, the game cannot succeed.

Token Value/Utility

Rule#2: The value of a token can be affected by numerous factors, but the primary driver of token value should be its utility.

The token utility can be achieved through variable gameplay to ensure that the token comes with a wide range of use cases, either in the game or outside of it. In-game tokens can work like health or energy, enable character progression, work as in-game currency, or allow to be swapped for other tokens or NFTs.

Most games already have multiple utilities for game tokens. But the difference is this: how strong is the use case to entice players to hold, buy or spend the token. Some examples of stronger use cases include enabling token staking to earn NFT rewards or integration of tokens into a partner game or a broader metaverse.

The utility can be added over time in creative ways. We have seen multiple projects evolving their game to add more use cases to make tokenomics more sustainable.

Vesting Periods

A vesting period is like a time-lock for tokens. Vesting periods are commonly used in private sales and investments.

Vesting Periods should be appropriate to the project's roadmap, its sustainability, and the team's right for reward. Short vesting periods might reflect lesser confidence in the project. In worst cases, this might result in exits or mass selloffs that can trigger market panic and result in a downward spiral to failure.

Rule#3: Having a longer vesting period for project team members and investors aligns the interest with that of players. We typically see a 1 year cliffing period and 2-4 years vesting period for GameFi projects.

Token selling by the project team is often frowned upon, and it is good practice for project teams to figure out trading modes (e.g., OTC) with partners like DAOs, big players, or guilds to cash out.

Gameplay & Player Experience

Gameplay & player experience decide the long-term success of the game. No matter how good your tokenomics model is, if the gameplay gets repetitive and the player experience is mediocre, the game will either fail or become a tedious grind.

Focus On the Game with Good Lore

Rule #4: Blockchain games should be fun and interactive and not just attract players with the vision of earnings.

If earnings are the primary reason to play the game, its future might become easily reliant on a need for more and more players to play to sustain the tokenomics. This can result in a catastrophic spiral when the new player acquisition slows and eventually stops.

The most-loved games are not the ones with the best rewards or fiercest competitive matchmaking, but the ones with great lore. Good lore writing is essential to engage players and make the game fun. The lore of a game is its backstory. The game design, music, and other elements should form the principal narrative and click together.

These elements should be used to create good lore that adds depth and richness to the game, expanding its story outside the main plot and allowing the players to better understand and connect with the game and its protagonists.

Free to Play vs. Pay to Play

Some projects have added the Free to Play model to their Pay to Play game to attract new players who might be interested in playing the game but don't want to spend just to try it. Players can start for free and then decide if they wish to continue playing Free to Play but with no opportunity to earn rewards or switch to Pay to Play to start earning. There's also a model that makes a compromise, called Free to Earn, where players can play the game for free but their earning potential is limited.

Rule #5: Projects with the Free to Play model show their team's confidence that the gameplay is attractive enough to gain new players without the earnings element. This is critical for the massive adoption.

One of the BNB Chain games with both Free to Earn and Pay to Play designs integrated is Thetan Arena. Thetan Arena has over 1.2 million daily active players, with more than half of them playing the free model.

Partnering with guilds

Guilds are communities of players that play together and help each other grow by sharing NFTs, knowledge, and other tips.

Partnering with guilds will provide access to a large number of players and draw confidence in the game. This will also help games to get a good takeoff and access new demographics.

Some of the active guilds such as Avocado Guild Games, GuildFi or Crypto Gaming United cover thousands of players, but there are many other gaming guilds.


Developing games is hard; developing successful games is a few levels harder. If we look at the mainstream gaming industry, there are hundreds of games released every year, with just a few becoming successful titles. According to, the video game industry is valued at $85 billion just in the US. However, most of the profits end up in the pockets of a few ultra-successful game titles. Only 4% of all games that go into production will ever see profit, and almost 80% of published games become forgotten and net a loss.

The gaming industry started in the 70s and has traveled a long way since then, and while GameFi builds on technology and knowledge gained from these 5 decades of innovation, it is still exploring a new frontier.

Blockchain gaming is currently in its infancy, and it will take a few more years before we'll have a chance to experience AA game title gameplay and experience on a blockchain. We should keep this in mind both as players and developers and acknowledge that there will be failures and mistakes on the way forward.

Based on the points shared above, it's safe to conclude that blockchain games, as the name says, should be focused primarily on the game element first and the DeFi element second.

The reason players enjoy a game and keep coming back should be the game itself. Think of games like World of Warcraft, Diablo, Mario, and many other games that are loved and enjoyed by whole generations worldwide. They had no earning factor, yet players invested hundreds and thousands of hours into playing them.

Successful blockchain games, especially GameFi, must provide a robust and attractive player experience to keep the community engaged and coming back. The in-game economy should be built to support this player experience and remain sustainable. In a sense, the economy should support the game, not vice versa.

DeFi functionality adds a unique proposition to the gaming industry, allowing players to monetize their efforts and time spent within the game and turn them into assets with value. This provides players with extra reasons to play the game and stay engaged while having fun. It also allows game developers to explore new possibilities in monetizing their games and obtaining funding.

In the end, the community is everything. If game developers want to build successful games, they must focus on building a stable and supportive community. Players tend more to play games where they can become a part of a dedicated community and, in addition to the game experience, have a positive social experience as well.

To end this, we'll leave you with one question.

To Play or To Earn?

Case Study - Axie Infinity

Axie Infinity is a Pokémon-inspired digital pet universe where anyone can earn tokens through skilled gameplay and contributions to the ecosystem. Players can battle, collect, raise, and build a land-based kingdom for their pets (known as Axies). Currently, players can start the game by purchasing Axies from other players on the Marketplace. All in-game assets and Axie-related data can be accessed by 3rd parties, allowing community developers to build their tools and experiences in the Axie Infinity universe. The project team aims to build a platform that encompasses the characteristics of a social network and jobs platform by creating a strong community and play-to-earn opportunities.

The game uses two tokens - $AXS and $SLP.

1. Axie Infinity Shards ($AXS)

  • Players are able to stake their token into the game in exchange for weekly rewards which are subjected to a vesting period. Staking also grants the players increased in-game rewards.
  • $AXS is also accepted as currency within the NFT marketplace, and for certain official sales and auctions, you may need to hold a certain amount of $AXS tokens
  • $AXS will be utilized in the governance system Axie Infinity is building

2. Smooth Love Potion

  • $SLP Tokens are earned in-game and required to breed new Axies to participate in official events and competitions
  • $SLP Tokens are burnt every time an Axie is minted, and each Axie needs more SLP each time it breeds
  • The value of $SLP is tied to the in-game sentiments of breeding Axies; the value of $SLP rises when there is more breeding.
  • $SLP token is the secondary token issued when the project team realized Axie Infinity isn't sustainable with just the $AXS token

Ownership Economy

  • All the fees and revenue generated by Axie Infinity are placed in the Community Treasury, which is governed by AXS holders. The AXS token provides a stake in the Axie universe (like company shares). It will allow players to share the economic success of the game.

Notable Success Factors

  • Network effects: Scholarships (which sponsor new players by lending them in-game assets) have been critical to ensuring strong adoption rates. This has also led to strong communities supporting and playing the game, which accelerated the network effect.
  • Owning in-game items: Since players own in-game items, it means they can sell their game assets to others and take pride in owning part of the game they love. Such P2P marketplace concept is different from traditional games where players make centralized in-game purchases that are not resellable.

Key Risk

  • Reliance on continual demand from new players: This is a key risk for most Play-to-Earn games today, where sustainability depends on the growth of new players.


Axie Infinity never stopped innovating. As the game took off, the team quickly realized that the single token economy was not working. They quickly adapted the $SLP token and thought of creative ways to increase the utility of the tokens. The continual adaptations and innovations (along with a good roadmap) are often a key reason for the longer sustainability of games.


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