Games that incorporate non-fungible tokens (NFTs) have taken off this year, as new blockchain apps and NFT marketplaces have emerged. Digital currencies native to new NFT games are rising in the rankings of the world’s largest cryptocurrencies as traders look for new opportunities to generate profits. During the Q2 2022 earnings conference call on 3 November, game publisher Electronic Arts (EA) said that while the “play to earn or the NFT conversation is still really, really early”, collectible NFTs will be “an important part of the future of our industry”.
So, what is an NFT game and why are they so popular? Which non-fungible token games are attracting the most users?
If you’re looking for an NFT games’ meaning, we’ve compiled a comprehensive list of things you need to know.
What are NFT games?
Gaming is touted as one of the markets in which NFTs can play a role in driving growth. They enable content developers to monetise their creations, while players can earn cryptocurrencies by engaging with content.
NFTs use blockchain ledgers to authenticate unique digital collectibles. This is key to how NFT games work.
In gaming, NFTs are used to create characters, avatars and items that players can collect to assist their gameplay and trade with other players. An item’s value depends on its use and rarity. Developers implement smart contracts that set out how NFTs function within the game. The contracts are stored on the blockchain. Items are traded as if they were physical assets. Each transaction is recorded on the blockchain.
One of the first games with NFT characters was CryptoKitties, which launched in 2017 on the Ethereum blockchain. In CryptoKitties, players collect, breed and trade digital cats. Each cat is a unique NFT. Smart contracts define their characteristics and rarity, which in turn determine their value on the traded market.
Games like CryptoKitties release a limited number of NFTs, which are subsequently only available on secondary markets. Other games enable players to create new NFT items to use in gameplay.
Some NFT-earning games are designed as metaverses, in which players can receive rewards for playing the game and advancing their skills. Games reward players with cryptocurrency tokens, which they can use to buy the NFTs.
Players own in-game items, giving them the chance to earn money by reselling their NFTs on secondary markets, renting them to other players or transferring them off the platform. And because smaller cryptocurrencies have attracted interest from investors looking for large returns, tokens from a game like Axie Infinity have gained value on cryptocurrency exchanges.
This potential to make money is helping to drive the popularity of NFT play-to-earn games. Players can convert their tokens into fiat currency on exchanges. In developing countries, this can be a source of income for people who play NFT games to make money.
What are the top NFT games?
NFT games have expanded beyond the Ethereum blockchain to operate on alternative chains, with some running on multiple chains. Several games have quickly gained popularity to rank among the largest NFT apps.
Here are the top five NFT games based on the number of users, as of 23 November 2021, according to data from DappRadar.
Launched in 2018, Splinterlands is a card-based strategy game that runs on the Hive blockchain. It has close to 300,000 users, making it the largest NFT game.
Splinterland players collect cards depicting various monsters with different stats and abilities, and use them to battle other players. The cards are compatible with third-party marketplace platforms such as Open Sea, PeakMonsters and Monster Market.
The game’s SPS governance token was launched in July and will be issued in a pre-set schedule over 65 months. Splinterlands raised a new round of private equity financing in July.
Launched in December 2020, Alien Worlds is a metaverse in which players use its Trilium token to travel on missions, vote in elections and run for planetary council. The game operates on the Ethereum, WAX and BSC blockchains.
In October, a new Alien Worlds Missions game launched on the BSC blockchain. Players compete for a share of a Trilium token reward pot and receive NFTs from missions. The NFTs enable functionality within the game. Developers in the community can also create games based on mission statistics or NFT game card statistics. There were eight different NFT game cards available at launch.
CryptoMines is a SciFi game that launched in September 2021. It has become the most popular game on the BSC blockchain.
Players collect workers and spaceships to travel through the universe searching for ETERNAL, a mineral that allows them to extend their characters’ lives, mint spaceships and make profits from playing.
The workers and spaceships are NFTs minted in the ERC-721 standard for trading on marketplaces or via peer-to-peer transactions with other players.
Players can stake ETERNAL in liquidity pools to potentially earn more tokens and increase the value of their holdings.
Axie Infinity is one of the most popular NFT games. Its native AXS token has climbed to a market capitalisation of just under $8bn, making it the 25th largest cryptocurrency, as of 23 November 2021.
Axie Infinity, which launched in 2018, is a metaverse in which players collect, raise and battle with NFT creatures known as Axies, similar to Pokemon.
Axie Infinity differs from a free NFT game because new players must use ether to buy at least three Axies from the marketplace. As the cost of buying Axies has climbed, players have created an informal “scholarship” system whereby “managers” can rent out their Axies to “scholars”, who use them to play and earn a share of any rewards.
Players earn tokens called smooth love potion (SLP), which they can trade on exchanges. AXS is the governance token of the metaverse and used to breed Axies.
Farming simulation game Farmers World launched on the WAX blockchain in June 2021. Players can choose tools and buy land to build farms and harvest crops.
Players can mine the game’s native tokens and mint NFT items through their farming activities. Farmers can protect their farms from wild animals and use their GOLD tokens to create their own farming tool NFTs. In August, the game added membership cards, giving players more opportunities to receive rewards.
New players purchase tools on AtomicHub, or use the game’s craft feature to create new tools and start playing. There are three main resources, each with a corresponding token: Farmers World Wood (FWW), Farmers World Food (FWF) and Farmers World Gold (FWG). Players can buy or sell the tokens on decentralised exchanges.
Note that this article does not constitute financial or investment advice. Before investing in any cryptocurrency, NFT or other financial asset, always do your own research and remember that your decision should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose. And keep in mind that past performance is no guarantee of future returns.
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