Because the GameFi industry is still in its infancy, you will need to do a lot of research before putting your resources into any projects. Tokenomics is a crucial part of the GameFi project that you need to think about.
In the last piece, we briefly tackled GameFi’s tokenomics. In a GameFi project, the connection between non-fungible tokens (NFTs) and crypto tokens is recognized through a system called “tokenomics.” Today, we will look into how single-token and double-token blockchain games work.
If you want to learn more about the basics of GameFi and how it works, you can read the first article we wrote about GameFi.
Single-token GameFi projects
Single-token GameFi projects use only one token for different purposes. For this model to work, there needs to be a steady external circulation. This can be done either by adding new players or through the investments of existing ones.
Three different standard models can be used in single-token GameFi projects. The first choice is for users to buy NFTs with crypto coins or tokens and use them to play games and win money. The potential earnings don’t stay the same because they depend on how much the token is worth on the market.
Another model makes sure that the token’s value will always be equal to the USD. For example, if playing the game every day will earn you 50 USDT, the number of tokens you get will depend on how much each token costs. You can yield and hold on to your tokens for a set time and then sell them after the price has gone up.
The third and last model sets up a strong link between the token’s price and the project’s cost and return. For example, a game that costs 200 tokens to play might give you back 20 tokens every day.
When there are more users, the prices go up. This is how people who join the game early earn money from new players and get paid for their participation. On the other hand, these kinds of token economies don’t last very long unless they can constantly increase new users.
Dual-token blockchain projects
Next, we’ll talk about dual-token GameFi projects. Before Axie’s Smooth Love Potion (SLP) was released, the game ran for a whole year as a project with a single token. In the first half of 2020, they released SLP to ease selling pressure on its in-game token, Axie Infinity Shard (AXS). Since then, a lot of projects have adopted the dual-token economy.
In a dual token GameFi project, one token is mainly used for governance, while the other is used to buy items. The breeding model and the blind box model are two of the most common ways dual tokens make more NFTs while increasing the use of tokens.
This model makes the second generation of NFTs by breeding Genesis NFTs. Because of this, the game can change the amount of selling pressure on the tokens based on their minted price.
Blind Box Model
Using the blind box model, the team chooses at random how many NFTs will be played in the game. Players can sell more when there is an increase in consumption or when the market is doing well. Because of this, the price of the tokens goes up since you need to purchase NFTs.
This article about the Top 5 GameFi Crypto Tokens for this year 2022 can help you choose which GameFi projects are worth investing in.
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