TL;DR

Play-to-earn games allow users to farm or collect crypto and NFTs that can be sold on the market. By playing the game regularly, each player can earn more items or tokens to sell and generate income. Some players have even started to increase or replace their salaries by playing this blockchain game. However, activities like this carry risks, because you usually have to make an initial investment to buy characters and items to play the game.

Blockchain helps guarantee the collectability of these items and creates a functioning digital economy. Blockchain and NFT technology enable the creation of digital items that are impossible to duplicate. This creates the concept of digital scarcity.

To withdraw, you need to deposit your NFT or crypto to an NFT marketplace or exchange like Binance. You are less likely to be able to convert directly to fiat. So, selling to get stablecoins first is a good idea.

After selling the NFT or token, you can convert the stablecoin into fiat of your choice, then withdraw using the channels available in your country. Another option is to use stablecoins with a crypto card like the Binance Visa Card.

Introduction

Blockchain gaming has come a long way from trading simple Non-Fungible Token (NFT) collectibles like Cryptokitties. You now have the opportunity to earn money by playing crypto games, even if you don't have the rarest NFTs in your wallet.

This concept sounds interesting, as video games rarely provide gamers with the opportunity to generate real-world income by selling digital assets. With this new play-to-earn gaming model, users can now make money in the crypto world.

What are play-to-earn games?

Play-to-earn allows players to generate a steady stream of crypto income just by playing games. Each game mechanic can be different, but the rewards usually come from staking, farming game currency, or generating tradable NFT items. In old blockchain games, users relied on random chance to generate profits. However, play-to-earn has created an in-game economy and business model that allows players to work to generate income.

Axie Infinity on the Ethereum blockchain is one well-known example. This game combines the elements and gameplay of traditional video games with the old blockchain gaming model. For example, Axie Infinity has adventure modes, PvP battles, and tournaments that usually appear in the traditional gaming industry. This game is available on Windows, Android, Mac OS, and iOS.

How do play-to-earn games work?

With a mix of gaming and finance, play-to-earn games fall into the GameFi category. Each game provides a financial incentive to play and continue. As mentioned, there is usually a grinding aspect, i.e. repeating certain actions that allows users to generate income in two main ways:

1. Earn in-game cryptocurrency. One example is Smooth Love Potion (SLP) from Axie Infinity which is obtained by completing daily quests or fighting monsters and players.

2. Earn or trade NFTs in the game. Each NFT can represent an item, character, or other collectible in the game. Depending on the game, these NFTs can be completely decorative or fulfill an in-game use or purpose.

There is also a third alternative to earning with play-to-earn games: staking. Some NFT games allow users to lock NFTs or cryptocurrencies in smart contracts that generate rewards in exchange. For example, staking MBOX tokens gives users a MOMO NFT Mystery Box reward. Each box contains random NFTs of varying rarities that can be sold on secondary markets. However, to generate large staking rewards, you will need a very large initial deposit.

How does blockchain technology secure play-to-earn games?

Play-to-earn is nothing new. There are many online games (usually MMORPGs) with fiat-based auction houses or secondary markets managed by gold farmers. For cryptocurrency games, the main difference is that these currencies and items are on the blockchain. Blockchain has several characteristics that can easily prove ownership, legitimacy, and scarcity.

You can think of a blockchain network like an immutable database. Management is carried out by a distributed network of computers (users), each of which has a copy of the blockchain data. This means that it is almost impossible for someone to change, duplicate, or delete blockchain data.

That way, blockchain games can be developed in such a way as to prevent fraud or corruption, such as item duplication, gold hacking, and other exploits that are common in traditional games. An important part of an item's value in a game is its rarity. With blockchain, there is no copy and paste activity. If an item is unique, there is no way for it to be replicated. This helps in creating real value for in-game items.

How much income do people make playing play-to-earn games?

Gaming is not usually known for providing monetary rewards to most users. It is quite difficult to understand that ordinary players can generate income from blockchain games. In fact, most people make their primary income from crypto games, such as Axie Infinity, especially in developing countries.

Farming can provide a more stable income stream, that is, your income is proportional to your skills and the amount of playing time. This farming method has proven popular in the Philippines, where Axie Infinity has even become an alternative to unemployment benefits. Players can make between $200 to $1,000 (USD) per month by farming SLP, depending on market price and playing time. The benefits of farming are usually lower than trading NFT creatures and items, but it is much safer for anyone who needs regular income.

With games like Axie Infinity, you can even use NFTs (Axie) to breed new ones. However, you cannot accurately predict the value of a new Axie. As of October 2021, the most expensive Axie (Angel) sold was for $131,970 on November 7, 2020 and is currently listed for 3,000 ETH. While these numbers may seem interesting, predicting the average earnings for someone selling NFTs from play-to-earn games is difficult, due to their random nature.

How to start playing play-to-earn games

Each play-to-earn game will have different requirements for new players. At a minimum, you will need a crypto wallet like MetaMask or Binance Chain Wallet to store your crypto and connect it to the game.

You may also need to make an initial investment to play, such as organizing a team of characters or purchasing items used in the game. Entering the digital crypto economy is usually not free.

As of October 2021, Axie Infinity requires an initial investment of approximately $600 to purchase three Axies. While it can pay off by playing for a few months, these fees are still a barrier to entry.

Another option is to look for scholarships that essentially allow you to borrow Axie from other players for free, then share the resulting income with those players (called managers). In other words, a specific percentage of your earnings will be given to the player depending on the scholarship. After creating a startup team and completing daily tasks and challenges, you will start steadily earning SLP, which is an ERC-20 token that can be traded on Binance and other crypto exchanges.

How to make withdrawals from play-to-earn games?

When playing NFT games, we mentioned there are two main options for earning: finding NFTs that can be sold or playing periodically to generate a steady stream of in-game cryptocurrency.

This activity will give you NFTs, tokens, or both to sell on secondary markets. Depending on the cryptocurrency and items you own, you may be able to sell NFTs and tokens on Binance. Ethereum and Binance Smart Chain (BSC) NFTs can be easily added to the Binance NFT Marketplace, but you need to ensure that the non-fungible token you want to sell is registered by Binance in your country. You will also need to verify your account by completing the KYC process.

Cashing out crypto from play-to-earn games

To cash in tokens like SLP or SAND, you need an exchange that offers your play-to-earn crypto in tradable pairs. If you want to use your earnings in the real world, you also need to consider whether you can exchange tokens for fiat currencies (such as US dollars and euros) and withdraw them to a bank account. Another option is to use a crypto card to spend your crypto (e.g., Binance Visa Card).

You can also convert earnings to stablecoins, but converting them to fiat will require additional steps. Your funds will be more stable in coins like BUSD than volatile cryptos like SLP, SAND, or Bitcoin (BTC). Let's look at an example.

By playing The Sandbox, you managed to produce some SAND which you now want to sell. To withdraw SAND, you need to deposit it into your Binance account first.

1. If you use MetaMask or another crypto wallet, copy the deposit address to the sending address to transfer cryptocurrency tokens. Don't forget, you will need crypto to pay the fees, such as BNB for Binance Smart Chain and ETH for Ethereum.

2. Then, in the exchange view, select the appropriate SAND pair to trade. SAND/BUSD is a good choice, as BUSD is easily exchanged for fiat currency and can be used to lock in your earnings.

3. Next, sell SAND using any order type desired. We're using market orders in this example, but you can also use limit orders or stop-limit orders.

4. You now have BUSD that can be converted into fiat in the BUSD market, such as EUR/BUSD. After selling for fiat, the process of withdrawing funds from Binance will change depending on your country of residence and available methods. You can find more information on our FAQ page.

Withdraw NFTs from play-to-earn games

If you acquire in-game NFT items and collectibles in play-to-earn games, you need to trade them on NFT exchanges to withdraw earnings. Binance NFT Marketplace has a deposit feature that allows you to sell NFTs directly on Binance. You can also use decentralized exchanges as long as your NFT is compatible with them.

1. To sell NFTs on Binance, create or log in to a Binance account. You must ensure that the NFT is in a compatible wallet, such as MetaMask. You also need to complete KYC verification.

2. Next, visit the Binance NFT main page, click [User Center], then [Deposit].

3. Select BSC or ETH, depending on the network the NFT is on. Then, you will see the address you want to send the NFT to.

For more detailed instructions, read How to Deposit NFTs on Binance. After importing your NFTs, you can sell them via Auction or Fixed Price format in a variety of cryptocurrencies. BUSD is a good choice when organizing sales, as it has low volatility and can be converted into fiat easily. Read How to Sell NFTs on Binance NFT Marketplace to find the right method for you.

Impact of taxation

If you decide to use Binance to withdraw your earnings, there are several options depending on your country and local regulations. However, always check the tax impact of any exchange from which to withdraw. You may also be in a legal jurisdiction that affects the legality of crypto. So, always do your due diligence.

Closing

Play-to-earn games are a new development related to earning with cryptocurrency. For most new projects and concepts, you usually have to be first in line to benefit. However, play-to-earn has enabled gamers to make money. However, you should always be careful, as most games can be high-risk and unsustainable due to poor tokenomics or even fraud.

If you want to explore GameFi and play-to-earn further, visit Binance's NFT page. There are regular launches for NFT Mystery Boxes from projects like MOBOX and My Neighbor Alice which all contain usable NFTs in the gaming world that can help you start your play-to-earn journey.