What is P2E: How E-Sports is Coming Back with Blockchain-Powered Earnings

Fantasy sports and e-sports is a growing industry, with a market size of more than $8B on the US market. An estimated 40 million players join one of the fantasy sports games in the US each day, turning it into one of the most appealing categories.

This success can translate into an opportunity for a new type of game - P2E, or play-to-earn, a tool for both entertainment and earnings. The game reward mechanism is powered by cryptographic blockchain technology, which found a new case in a crossover with gaming. Players can choose to invest or cash out from a growing ecosystem of games and collectible marketplaces.

Blockchains Open Up for Fungible Electronic Cash
Blockchain tokens have been around for years, but only in 2021 took off in earnest to support a new usage, as in-game currencies. Unlike VBucks or Minecoin, cryptographic tokens are much more agile, and can be sent around the world, exchanged, swapped or stored safely with no fear of the game disabling or debasing them.

Blockchain is the basis of play to earn. Using a distributed network with protected communication, tokens can be moved anywhere in the world. This allows a gaming community to assign cash pools, competition rewards or regular incentives.

Tokens, at their simplest, work like electronic cash, taking the example of Bitcoin. They can be used within the game to buy items or advancements. Each player can also have complete control over their tokens, by holding them in a wallet protected with a fully controllable private key. This extra layer of security means play to earn games can afford to hold significant value, with relatively small risks of theft or exploits, mostly due to human error.

The Power of Collections: Why NFT and Sports are a Dream Team
One of the sources of earnings for e-sports games are the newly created collections of non-fungible tokens, or NFTs.

NFT items exist the same way that regular tokens, as code on the blockchain. But in the case of NFTs, the blockchain record is also tied to digital content.

That digital content, for instance sports or athlete cards, is created and curated for being rare and exclusive. This potential created platforms like Sorare, which produced collections of athlete cards for the most prominent soccer players. Some collections are then used within fantasy football games. Others are just rare collectibles on a digital medium, thus expanding to a borderless, international collection of potential owners.

Because the cards are digital, they can be traded on unified platforms, and some end up commanding significantly high valuations. The Sorare platform has seen resales at the equivalent of about 100 ETH, or around $260,000, with some unique cards commanding prices in the millions, at least based on sales reports.

In the case of Sorare, the hype may be justified. The game has a strict scheme of launching a limited series of top soccer celebrity cards, while setting up players to compete and bring together a unique fantasy team.

What are the Pros of Play to Earn
Play to earn is a tool to own your game. All acquired assets, tokens, cards, achievements can be kept privately. They can also be re-sold for profit or swapped with other players. Play to earn is also accessible through gaming guilds, which offer a starter pack to skilled players with no upfront costs, then share in the game’s profits.

Play to earn is connected to some of the most reliable and liquid exchanges for swapping or trading cryptocurrency. Players can choose to cash out and receive either valuable crypto coins or to sell again for a spendable fiat payout. Some of the proceeds from play to earn games can be held or reinvested in the game, or used for passive returns. Play to earn opens up the world of finance through cryptocurrency and tokens, and has helped bring significant earnings to players across the globe.

What are the Risks of Play to Earn
Play to earn carries specific risks, one of them being the constant inflow of new games. Not all projects are created the same, and some games may not yield significant earnings.

Buying NFT collections also has a high risk profile. While rare cards can command high prices, most NFT items struggle to sell. For that reason, it may be safer to buy only top collections with a history of demand and popularity.

The other risk lies in the technology itself. While wallets are very secure in terms of password protection and cryptography, there are still phishing attempts or malicious apps that can ask for the wallet to be unlocked. Once unlocked, automated smart contracts can empty the contents of a wallet, for both reward tokens and NFT collections.

Game reviews and mentions are not an endorsement or investment advice. Using crypto coins and tokens has inherent risks in terms of market price and technological errors and abuses. The best approach is to perform one’s own due diligence before taking up a play to earn game or buying an NFT collection.

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