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Games with a “play-to-earn” concept allow users to receive or collect cryptocurrency and NFTs, which can then be sold on the market. By playing regularly, the user can earn more items or tokens to sell and generate income. Some users of blockchain games regard them as additional income, and some even consider them as the main way to receive money. However, this activity comes with risks, as purchasing in-game characters and items usually requires an initial investment.

Blockchain ensures the security of ownership of collections of items and helps create a functioning digital economy. Blockchain and NFT technologies make it possible to create digital objects that cannot be copied. This is how the concept of digital scarcity was born.

To withdraw funds earned in the game, you need to transfer the NFT or game cryptocurrency to an NFT marketplace or exchange such as Binance. It's unlikely that you'll be able to convert tokens directly into fiat, so a good place to start is by exchanging your in-game currency for a stablecoin.

Once you sell NFTs or tokens, you can exchange your stablecoin for fiat and withdraw money using channels available in your country. Another option is to transfer your stablecoin to a crypto card such as the Binane Visa Card.

Introduction

Blockchain games have come a long way from the traditional trading of non-fungible tokens (NFTs) like Cryptokitties. Now you can make money in crypto games even without having rare NFTs.

This sounds interesting because traditional video games rarely allow players to earn real income through the sale of digital assets. With the new “play-to-earn” concept, users can truly earn money in the world of cryptocurrencies.

What are play-to-earn games?

With play-to-earn games, users can earn cryptocurrency income just by playing. Game mechanics may vary, but typically rewards are obtained through staking, farming in-game currency, or creating NFTs that can be traded. While older blockchain games had a very uncertain chance of earning money, play-to-earn has created in-game economies and business models where players can earn a guaranteed income.

The most famous example is Axie Infinity on the Ethereum blockchain. This game combined the elements and gameplay of traditional video games with the old blockchain gaming model. For example, Axie Infinity has an adventure mode, PvP battles and tournaments - mechanics typical of the traditional gaming industry. The game is available on Windows, Android, Mac OS and iOS.

How do play-to-earn games work?

Play-to-earn games that combine gameplay and financial instruments are classified as GameFi. Every GameFi product provides financial incentives to play and progress. As we have already said, such games are characterized by the repetition of certain actions, thanks to which income can be obtained in two main ways:

1. Earnings from in-game cryptocurrencies. An example of such a model is Axie Infinity's Smooth Love Potion (SLP), in which you can earn rewards by completing daily quests and fighting monsters and players.

2. Receiving or selling in-game NFTs. NFTs can come in the form of a game object, a character, or other collectibles. Depending on the game, items can be purely cosmetic (changing the appearance of something) or directly affect game mechanics.

The third option for making money in play-to-earn games is staking. Some NFT games allow users to lock NTFs and cryptocurrencies in smart contracts, which allows players to receive rewards. For example, by staking MBOX tokens, users receive rewards in the form of NFT Mystery Boxes MOMO. Each of these boxes contains random NFTs of varying rarity that can be sold on the secondary market. That being said, to get big rewards for staking, you need a significant initial investment.

How does blockchain technology ensure the security of play-to-earn games?

The “play-to-earn” concept itself is not new. There are a lot of online games (usually MMORPGs) with fiat online auctions and secondary markets created by farmers. The main difference between cryptocurrency games is that these currencies and items exist on blockchains. Blockchain has several properties that make it easy to prove the ownership, legitimacy, and rarity of collectibles.

You can think of blockchain as an immutable database. The blockchain is maintained by a distributed network of computing devices (users), each of which stores a copy of the blockchain data. This means that it is virtually impossible to change, copy, or delete data stored on the blockchain.

That is, blockchain games can be designed to prevent cheating or unauthorized data modification, such as item duplication, game currency hacking, and other threats found in traditional games. The most important part of the value of an in-game item is its rarity. There is no copy and paste in blockchain. If an item is unique, it cannot be copied. This helps give real value to in-game items.

How much can you earn from play-to-earn games?

Computer games, as a rule, do not generate income for the average user. And figuring out how regular gamers can earn income from blockchain games can be extremely difficult. However, many users, especially in developing countries, make a living wage from crypto games like Axie Infinity.

Farming can provide a more stable income, where your earnings are proportional to your skills and the amount of time you spend playing the game. This way of making money has proven popular in the Philippines, where Axie Infinity is helping people earn money amid unemployment. By farming SLP, players can earn monthly from $200 to $1,000 depending on the market price and time spent. Income from farming is usually lower than from trading NFTs, but is much more reliable for those who are interested in regular income.

In games like Axie Infinity, you can use your NFTs (axies) to create new ones. However, it is impossible to accurately predict the value of the derived axis. As of October 2021, the most expensive AX (Angel) was sold on November 7, 2020 for $131,970 and is currently trading for 3,000 ETH. While these numbers sound attractive, predicting the average revenue from NFT sales in play-to-earn games is difficult due to their random nature.

How to start playing and earning according to the “play-to-earn” principle

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

You will also need an initial investment, for example to create a team of characters and purchase items used in the game. Entry into the digital cryptoeconomy is not usually free.

In October 2021, it cost about $600 to purchase three Axies from Axie Infinity. While these can be paid for within a few months of gameplay, it still creates a barrier to entry.

Another option is to find so-called scholarships, under the terms of which you can borrow an axis from another player for free, and then share the income received with this player (manager). In other words, the player who provided the scholarship will receive a portion of your income. Once you build your initial team, complete daily challenges, and pass challenges, you will begin to earn a steady income from SLP, an ERC-20 token that can be traded on Binance and other crypto exchanges.

How to withdraw money from play-to-earn games?

We looked at two main options for making money in NFT games: searching for NFTs for subsequent sale or regular gameplay to continuously receive in-game cryptocurrency.

Through these activities, you receive NFTs, tokens, or both and can sell them on the secondary market. Depending on what cryptocurrencies and items you own, you can sell both NFTs and tokens on Binance. NFTs on the Ethereum and Binance Smart Chain (BSC) blockchains can be easily added to the Binance NFT Marketplace, but you will need to check if the non-fungible tokens you want to sell are listed on Binance in your country. In addition, you will need to verify your account by completing the KYC procedure.

Withdrawing cryptocurrency from play-to-earn games

To withdraw SLP or SAND tokens, you need an exchange that has a trading pair for your token. If you want to use these funds in real life, also check if you can exchange the tokens for fiat currency (such as US dollars or euros) and transfer them to your bank account. Another option is to use a cryptocurrency card to spend cryptocurrency directly (such as the Binance Visa Card).

Alternatively, you can convert your funds to a stablecoin, but converting to fiat will require an additional step. A coin like BUSD will give your funds a more stable value than volatile cryptocurrencies like SLP, SAND, or Bitcoin (BTC). Let's look at a short example.

You've been able to earn SAND while playing The Sandbox, and now you want to sell it. To withdraw your SAND, you first need to transfer it to your Binance account.

1. If you use MetaMask or another crypto wallet, then to transfer cryptocurrency tokens, copy the deposit address into the interface of the wallet from which you are sending funds. Don't forget that you need cryptocurrency to pay fees, such as BNB on Binance Smart Chain and ETH on Ethereum.

2. Then, in the exchange interface, select the trading pair of interest with SAND. SAND/BUSD is a good choice since BUSD is easy to exchange for fiat currencies and you can use it to lock in your income.

3. Then sell SAND using any order type you want. In this example we used a market order, but you can also sell using limit or stop limit orders.

4. Now we have BUSD, which can be converted into fiat in BUSD markets such as EUR/BUSD. Once you sell your tokens for fiat, the rules for withdrawing cash on Binance will depend on the country you live in and the options available there. More information about withdrawals can be found on the FAQ page.

Withdrawing NFTs from play-to-earn games

If you have earned in-game NFTs and collectibles through play-to-earn, you will need to sell them on an NFT exchange to withdraw your earnings. On the Binance NFT Marketplace, owners can list their NFTs for later sale. If NFTs are compatible with decentralized exchanges, then you can use them.

1. To sell NFTs on Binance, create or log in to a Binance account. Make sure the NFTs are in a wallet that is compatible with the Connect wallet, such as Metamask. In addition, you will need to undergo KYC verification.

2. Then go to the Binance NFT home page, select [User Center] from the menu and click [Deposit].

3. Depending on the network your NFT is on, select BSC or ETH. You will then see the address to send the NFT to.

For more detailed instructions, read the article “How to Transfer NFTs to Binance”. Once you have imported the NFT, you can sell it at auction or for a fixed price in various cryptocurrencies. A good option for an exchange currency is BUSD as it has little volatility and can be easily converted to fiat. You can find the right selling option for you in the article  “How to Sell NFTs on the Binance NFT Marketplace.”

Taxes

If you decide to use Binance to cash out your earnings, there are several tax options depending on your country and local laws. It is always important to check the tax rules of any exchanges you use to withdraw funds. The legal status of a cryptocurrency depends on the jurisdiction you are in, so always do your due diligence.

Summary

Play-to-earn games are a new way to earn cryptocurrencies. When it comes to new projects and ideas, then in order to get the maximum benefits, it is better to be one of the first. However, play-to-earn games allow gamers to earn money. However, you should always be careful: games can be high-risk and unreliable due to poor tokenomics and even turn out to be a scam.

If you want to dive deeper into GameFi and play-to-earn activity, head over to the Binance NFT page. Companies like MOBOX and My Neighbor Alice regularly release NFT Mystery Boxes that contain NFTs useful for games. Thanks to them, you too can start playing.