What Is Play to Earn and How Can You Cash Out?

What Is Play to Earn and How Can You Cash Out?

Play-to-earn (P2E) games are built on the blockchain and include internal economic models that distribute tokens to users for completing certain tasks. This enables gamers to collect crypto as they play, earning in-game currencies and non-fungible tokens (NFTS) that represent different characters and items.

Play-to-earn (P2E) games are built on the blockchain and include internal economic models that distribute tokens to users for completing certain tasks. This enables gamers to collect crypto as they play, earning in-game currencies and non-fungible tokens (NFTS) that represent different characters and items.

It is possible for players to make several hundred dollars a month from P2E games, and occasionally much more, since some of the rarest and most sought-after NFTs can sell for thousands of dollars.

Players can choose to hold these tokens or cash them out using a cryptocurrency exchange. The money they have collected from the games can either be withdrawn via a payment processor in their local currency, or held on the blockchain as stablecoins and other cryptos such as BTC and ETH.

What Is P2E Gaming?

P2E gaming has been around since 2017, when Crypto Kitties launched, but has emerged over the last two years as one of the stand-out use cases for blockchain. Axie Infinity, an enormously popular combat game focused on dragon-like characters called ‘Axies’, attracted millions of users, and spawned a vast number of games along the same lines, as well as ones with entirely new themes.

Because P2E games allow players to earn real money, they have cross-over appeal to mainstream gamers – especially in low-income countries where the amounts of cash that can be earned have greater purchasing power.

There are risks, of course, including volatility in the price of tokens, which means the amount of money that can be earned fluctuates. Still, in the Philippines and other locations where P2E has taken off, a growing number of young people are quitting their jobs to play full time, because the pay is so much better than any local opportunities.

Why Is Blockchain Important?

Blockchain is an integral part of P2E gaming. The ability to earn in-game currencies is nothing new; for years now, complex economies have been a part of the gaming landscape. However, blockchain adds a new dimension to this.

Any tokens earned by players in P2E games are owned solely by them, and users have complete freedom to hold, transfer, or sell their tokens as they wish. This is very different to conventional games, where currencies and other items of value are stored on a centralised server run by the company that owns the game. It is hard or impossible to trade and transfer these to other users securely, and gaming companies often actively discourage it anyway.

Ways to Earn In P2E

There are broadly three ways to earn through P2E games:

  • Playing for tokens. Simply by spending time in these games, players can earn tokens every day. Winning battles and developing your character will earn more. This activity of putting in the hours of effort to earn is known as ‘farming’.
  • Trading NFTs. Characters and in-game items are represented by NFTs. By collecting valuable items, developing your character, or otherwise acquiring rare NFTs, you can make additional income by selling these on the games’ built-in marketplaces, or on external ones like OpenSea.
  • Staking tokens. Many games include DeFi-like elements, allowing you to stake (lock) the in-game currency and earn a return. The income you can gain from this is variable, but can be significant.

How Much Can You Earn?

The amount that can be earned from P2E games varies dramatically, depending on the game itself, how long you play, how proficient you are, the market price of the tokens you receive, and whether you play primarily for in-game currencies or NFTs.

Farming is the simplest and most reliable way of making money. A reasonably good player who puts in several hours a day might earn anything up to $20 or $30 per day, though if you’re starting out it might just be a few dollars.

If you know what you’re doing and can afford to take a little more risk, it might be worth developing your character NFTs and hunting out valuable items – either because this will increase your earnings, or because you can sell them on the secondary market. If you get really lucky, some of the more sought-after characters can be worth many thousands of dollars, with the rarest selling for over $100,000.

How To Get Started

It’s not difficult to get started with P2E games, but the barrier for entry can be a little higher than regular games. At the very least you should have a basic knowledge of crypto and blockchain, and familiarity with MetaMask, a browser extension that acts as a crypto wallet and allows you to interact with blockchain games.

Some games will require you to own character NFTs before you get started (for example, if you want to play Axie Infinity you’ll need three Axies, which you can purchase from the Axie marketplace or another NFT marketplace platform). If so, you’ll also need some crypto like ETH, or stablecoins like USDC or Dai, to buy them.

If the NFTs are too expensive, then you can still get started by securing a P2E ‘scholarship’. This involves borrowing the NFTs you’ll need to play a game, in return for a percentage of your daily income. This can be a good option, since it’s possible to borrow rare and valuable NFTs that increase your earnings potential. You can join a guild like Crypto Gaming United (CGU) to organise a scholarship.

Finally, you’ll need an account with a crypto exchange, so that you can sell the crypto you earn and withdraw it as your local currency, or hold it in stablecoins or other currencies if you prefer.

Cashing Out

Once you’ve earned some tokens from your chosen P2E game, you’ll need to send them to an exchange to be sold and withdrawn.

The first step is to make sure you choose an exchange that allows you to trade the tokens issued by the game you’re playing. Large exchanges like Coinbase will support some popular tokens like AXS and SLP, Axie Infinity’s two in-game tokens, but won’t allow you to trade tokens from newer and smaller games.

TimeX, an Australian crypto exchange, allows users to trade several popular P2E tokens, including The Crypto Prophecies (TCP), Axie’s SLP and AXS, and Samurai Legends’ SMG and KOKU, plus CGU, the native token of the Crypto Gaming United guild, as well as a number of other major cryptos and stablecoins.

Depositing crypto to your TimeX account is a simple matter of finding your deposit address from the Balances page, and sending tokens to it from your MetaMask wallet. (This is much the same for any exchange.) Once the transaction has been confirmed (processed) on the blockchain, the tokens will be credited to your account and can be traded for other currencies.

The main thing is to make sure that you are depositing tokens to the right address. Double check that you have selected the deposit address for the right currency, and that it’s on the right blockchain.

TimeX also has a Simple mode, which allows you to convert smaller amounts of crypto to USD or other currencies, quickly and easily. You can then withdraw these to a bank account or via another service like ADV Cash.