Play-to-Earn (P2E) is a gaming model in which players are rewarded with blockchain-native assets — tokens or NFTs — through in-game actions. These assets can be traded on secondary markets for real money, creating genuine income streams. The model peaked with Axie Infinity in 2021, when players in the Philippines, Venezuela, and Indonesia were earning more from Axie than local minimum wage. The crash of 2022 exposed fundamental economic weaknesses in early P2E designs, prompting a pivot toward “Play-and-Earn” and sustainable GameFi models.
Core Concept
Traditional games: Player buys game → plays → time/money input has no real-world output
P2E games: Player buys in-game assets (as NFTs) → plays → earns tokens → sells tokens → withdraws real money
The Value Circuit
- New players buy in-game NFTs on the open market (entry cost)
- Players complete quests, battles, or activities → earn native tokens
- Tokens are used to breed new NFT characters / craft items / stake
- NFTs and tokens can be sold on secondary markets (OpenSea, Binance NFT, etc.)
- Token demand must be sustained by new player inflow or external utility
Axie Infinity — The P2E Case Study
Axie Infinity (Sky Mavis, Vietnam) was the defining P2E game of the 2021 cycle.
- Game mechanic: Collect and battle Axie NFT creatures. Breed for new Axies.
- Token: AXS (governance/staking) + SLP (Smooth Love Potion — breeding fuel, earned from wins)
- Peak (Jul 2021): 2.5M daily active users; SLP reached $0.35; scholars earning $300-1000/month
- Philippine phenomenon: “Scholarly” system — NFT owners lent Axies to players in developing countries who shared earnings. Mainstream media coverage in Forbes, BBC.
Axie Collapse
| Date | Event |
|---|---|
| Nov 2021 | AXS peaks at ~$165; SLP peaks at $0.35 |
| Nov 2021 | Sky Mavis expands Ronin bridge for efficiency |
| Jan 2022 | SLP falls to $0.01 as earning outruns demand |
| Mar 2022 | Ronin bridge hack — $625M stolen in the largest DeFi hack ever |
| 2022 | AXS falls 98% from peak |
Root Cause of Collapse: The in-game economy was purely inflationary. SLP was earned by all players but only burned by breeders. Player growth was slowing but SLP issuance wasn’t — hyperinflation destroyed earning power.
GameFi Terminology
| Term | Meaning |
|---|---|
| GameFi | Gaming + Finance; umbrella term for blockchain gaming |
| P2E | Play-to-Earn: earn tokens through gameplay |
| Play-and-Earn | Rebranded version emphasizing actual game quality first |
| Scholarship | NFT owner lends assets to a “scholar” who plays and splits earnings |
| In-game NFT | A game asset (character, land, weapon, etc.) as an NFT on-chain |
| Grind | Extended repetitive gameplay to maximize token earnings |
| Ronin | Axie Infinity’s sidechain for low-fee transactions |
Other Notable P2E Projects
| Game | Token | Highlight |
|---|---|---|
| The Sandbox | SAND | Virtual land NFTs; sold to Snoop Dogg, Atari |
| Decentraland | MANA | Early metaverse land game |
| Illuvium | ILV | AAA-quality ambition; play-and-earn model |
| Gods Unchained | GODS | Card game; Immutable X L2 |
| STEPN | GMT/GST | Move-to-Earn: walk/run to earn (10M during peak) |
| Star Atlas | ATLAS | Space exploration MMORPG (still in development) |
| Gala Games | GALA | Multi-game ecosystem |
Play-and-Earn 2.0
Post-2022 collapse, the industry pivoted:
- Game-first philosophy: Quality gameplay that would succeed as a free game first
- Controlled emissions: Token issuance capped and tied to protocol revenue, not raw player count
- Multiple burn sinks: Multiple ways for tokens to exit circulation, not just one mechanic
- Non-speculative onboarding: Remove the NFT entry barrier for new players
Illuvium, Big Time, Shrapnel, and other “AAA” blockchain games launched or continued development with this approach, targeting traditional gamers rather than yield-seekers.
Economic Analysis
The fundamental challenge of P2E economics:
Ponzi Dynamics: Pure P2E (no external revenue) requires constant new player investment to sustain earnings. When growth slows, token prices fall → earnings fall → players leave → token prices fall further. This is structurally similar to a Ponzi scheme.
Sustainable Model Requirements:
- External revenue (game purchases, cosmetic sales) that isn’t token-reinvested
- Real utility for the native token beyond speculation
- Multiple token burn mechanisms to create sustainable equilibrium
- Gameplay that retains non-earning players
Social Media Sentiment
P2E is viewed skeptically after the 2022 collapse. “Scholarship” programs that were featured in mainstream media as poverty alleviation are now cited as cautionary tales. “Play-and-Earn” and “AAA blockchain game” are the updated talking points. Genuine games are still in development — the category isn’t dead, but the 2021-2022 speculation model is discredited.
Last updated: 2026-04
Related Terms
Sources
Hamari, J., & Šbella, A. (2023). The Economy of Play: A Systematic Review of Play-to-Earn in Blockchain Games. Simulation & Gaming.
Scholten, O., et al. (2023). GameFi: The Intersection of Games and Decentralized Finance. Computers in Human Behavior Reports.
Ante, L. (2022). Play-to-Earn and Blockchain Game Economics: A Literature Review. arXiv.
Ronin Network Post-Mortem. (2022). Sky Mavis Ronin Validator Hack Analysis. Sky Mavis Blog.
Yilmaz, E. (2022). Axie Infinity Scholarship System: Labor, Informal Economy, and Crypto-Gaming in the Global South. Journal of Digital Social Research.