Crypto gaming is one of the most contested and evolving sectors in Web3. Since Axie Infinity’s 2021 boom (and subsequent crash), the industry has undergone significant soul-searching about what “blockchain gaming” should actually be. The first wave was predominantly “play-to-earn” (P2E) — games designed around earning crypto tokens, often with weak game design but strong financial incentives. The critiques were harsh: these were Ponzi schemes in game clothing. The second wave has attempted to learn from these failures — emphasizing actual gameplay, sustainability, and giving players ownership of assets without making asset price speculation the point of the game. A third frontier is “fully on-chain games” (FOCGs) — where all game logic runs on blockchain smart contracts, creating “autonomous worlds” that no company can shut down.
Play-to-Earn (P2E) — The First Wave (2020-2022)
The following sections cover this in detail.
Axie Infinity and the Template
- Players breed, battle, and trade Axie NFTs
- Playing earns SLP (Smooth Love Potion) tokens
- SLP was tradeable for real money
- Peak: 2.5M daily active players, $800M+ monthly revenue (October 2021)
Economic model: Players invest in Axies (NFTs), earn SLP, sell SLP, earn more than investment cost. Scholarship model: investors owned Axies, “scholars” played them for a percentage of earnings.
Why it worked (temporarily): New player influx > SLP inflation rate. As long as more players joined, buying SLP to get started, existing players could earn.
Why it collapsed:
- Growth slowed → SLP supply exceeded demand → SLP price crashed
- Earning $0.003/SLP × 100 SLP/day = $0.30/day after months earning $10/day
- Players left → price crashed further → Ponzi dynamics
Pattern: Play-to-earn games with inflationary token economies without sustainable demand all follow the same collapse pattern. Dozens of games followed Axie’s model and all failed similarly.
Key P2E Failures
- StepN (GMT): Move-to-earn; similar boom-bust
- Gods Unchained: More game-focused but still P2E influenced
- The Sandbox/Decentraland: Virtual world land prices collapsed
- Alien Worlds: WAX-based mining game; minimal actual gameplay
Gaming Layer 2 Chains
Purpose-built infrastructure for blockchain gaming:
Immutable X / Immutable zkEVM
- No gas fees for users (gas-free NFT minting and trading)
- Fast transactions (2,000+ TPS)
- Partnership with Polygon for immutable zkEVM
- Notable games: Gods Unchained, Illuvium, Guild of Guardians
Ronin Network
- Expanded post-Axie to multi-game ecosystem (Pixels had 1M+ daily)
- PoS validators, EVM compatible
Arbitrum Nova
- Trade-off: cheaper than Arbitrum One, weaker data availability guarantees
- Suitable for gaming where not every state needs Ethereum-level security
WAX (Worldwide Asset eXchange)
- Energy-efficient PoA consensus
- Alien Worlds, Splinterlands
Fully On-Chain Games (FOCGs)
The frontier of “autonomous worlds”:
Core Concept
- No server that can be shut down
- No company that can change rules
- The game continues as long as the blockchain exists
- Players own the entire game state
Examples
Dark Forest:
- Fully on-chain strategy/space exploration game
- Uses ZK proofs for “fog of war” (hidden information on a public blockchain)
- Move computation verified without revealing positions
- No “owner” — game is a set of contracts on Gnosis Chain
Argus / MUD (Framework for FOCGs):
- MUD (Multi-User Dungeon) framework by Lattice
- Enables building entity-component-system architecture games fully on-chain
- Used by OPCraft (Minecraft on Ethereum), other experiments
Pixels (semi-FOCG):
- Farming game on Ronin — significant state on-chain
- 1M+ daily active players in 2024 peak
- More “meaningful” gameplay than pure P2E
Limitations of FOCGs:
- High gas costs for every game state update
- Slow block times create latency (no real-time action games)
- Currently limited to turn-based, strategy, or asynchronous games
- ZK proofs relax some constraints (private information on public chain)
The NFT Asset Ownership Model
The blockchain gaming proposition beyond P2E:
Traditional games: You spend $400 in Fortnite skins. Epic Games owns them. If the servers shut down, they’re gone.
Blockchain games: In-game items are NFTs on your wallet. You own them irrevocably. Can be traded on secondary markets. Potentially portable across games.
Limitations in practice:
- Game studios don’t want to honor cross-game asset portability (competitive advantage from exclusive content)
- NFT skins in game A are worthless if game A dies — you own the NFT but it represents nothing
- The practical cross-game portability is largely unrealized
Counter-example — Immutable’s interoperability push: Immutable has pursued cross-game asset standards where NFT items appear in multiple supported games — one step toward realizing the “own your items” promise.
2024-2025 Market Reality
After P2E crashes, what’s working:
Pixels (Ronin): Farming game with actual gameplay loop; organic user acquisition; more resilient than P2E mono-economy games.
Parallel TCG: Trading card game with NFT cards; actual competitive game design; AAA production values for a blockchain game.
Gaming on Base: Multiple consumer games launching on Base with low fees and Coinbase’s distribution advantages.
AAA Studios entering: Ubisoft (Quartz program, Champions Tactics), Square Enix (Symbiogenesis), other major studios experimenting with blockchain asset ownership.
Social Media Sentiment
Crypto gaming has a reputation problem from the P2E era. Hardcore gamers strongly reject “blockchain games” because most examples were bad games with crypto grafted on. The community shorthand: “If removing the blockchain makes the game better, the blockchain wasn’t the point.” The sentiment has bifurcated: crypto-native users are willing to engage with on-chain games; traditional gamers remain deeply skeptical. The FOCG/autonomous worlds movement is respected by Ethereum developers as conceptually important but remains a niche research frontier. Practical progress narratives center on Immutable’s gaming ecosystem, Ronin’s survival and diversification, and a few games (Pixels, Parallel) that have organic player bases. The general consensus: good crypto games are possible, they just require prioritizing actual gameplay over token economics — a reorientation from P2E to “play AND earn” or “play to own.”
Last updated: 2026-04
How to Get Started with Crypto Gaming
- Get ETH or USDC via
- Choose an ecosystem: Ronin (roninchain.com), Immutable (immutable.com), or Ethereum
- Create a gaming wallet: Ronin Wallet or MetaMask
- Start with free-to-play options (many games have free starter assets)
Store valuable gaming NFTs securely:
Related Terms
Sources
Chohan, U. W. (2021). Non-Fungible Tokens: Blockchains, Scarcity, and Value. SSRN Working Paper.
Yoo, S. (2022). Play-to-Earn Games and Their Impact on Developing Countries. SSRN Electronic Journal.
Hamari, J., & Keronen, L. (2017). Why Do People Play Games? A Meta-Analysis. International Journal of Information Management, 37(3).
Ante, L. (2022). Non-Fungible Tokens in Digital Art, Music, and Gaming. Finance Research Letters.
Buterin, V. (2018). Notes on Blockchain Governance. Vitalik.ca Blog.