A new dimension is happening in the gaming industry as a result of existing gaming models that restrict players' influence over in-game assets. You can now earn and possess your virtual goods in addition to playing all thanks to blockchain technology.
This has led to the question: What are crypto gaming coins, and why are they important for the future of digital gaming?
This article will cover everything you need to know about crypto gaming coins.
Key Takeaways
- Crypto gaming coins are digital currencies used in blockchain-based games for transactions, rewards, and asset ownership.
- Play-to-earn models allow players to earn crypto gaming coins by participating in in-game activities or completing tasks.
- Crypto gaming coins can often be traded or converted into real-world currency through cryptocurrency exchanges.
- Security risks and regulatory uncertainties are major challenges in the adoption of crypto gaming coins.
History and Evolution of Crypto Games
Crypto gaming coins are digital tokens used within blockchain-based games that allow players to earn, trade, and purchase in-game assets. The concept traces back to the early 2010s when the first blockchain-based games started to emerge
One of the earliest examples was "CryptoKitties," launched in 2017, which allowed players to buy, collect, and trade unique virtual cats using Ethereum.
This game demonstrated the potential of blockchain technology in gaming, leading to the development of more sophisticated crypto-gaming coins and platforms.
In 2018, games like "Axie Infinity" and "Decentraland" gained popularity, introducing new ways for players to earn real-world rewards through play-to-earn mechanics.
These games used their own native tokens, such as AXS and MANA, which players could earn by participating in the game and trading on various cryptocurrency exchanges.
The integration of NFTs (Non-Fungible Tokens) further changed the gaming industry, allowing players to own unique in-game assets that could be bought, sold, or traded on decentralized marketplaces.
This created a new economy within games, where players could monetize their skills and creativity. As the popularity of crypto gaming coins grew, so did the number of platforms and games adopting this technology.
The total marketcap of crypto gaming coins has reached billions of dollars, with numerous successful projects and a growing community of gamers and investors by 2024.
In 2024, the market cap of crypto gaming coins surpassed $10 billion.
Types of Crypto Gaming Coins
Crypto gaming coins fall into various categories depending on their use within games or gaming ecosystems.
They serve distinct roles in enabling decentralized transactions, player rewards, asset ownership, and more.
Below are the primary types of crypto gaming coins, along with relevant examples.
1. Play-to-Earn (P2E) Coins
Play-to-earn (P2E) coins are central to the concept of rewarding players for their in-game achievements. Players earn these tokens by completing tasks, winning battles, or reaching milestones within games.
These coins can often be traded on exchanges or used within the gaming ecosystem.
Examples:
- Axie Infinity (AXS): Players earn AXS by participating in various battles and activities within the game Axie Infinity, where they breed, collect, and battle NFT-based creatures.
- Smooth Love Potion (SLP): Also part of Axie Infinity, SLP is used to breed new Axie creatures and can be earned through gameplay.
2. In-Game Utility Tokens
Utility tokens are the native currency of specific games, used to purchase in-game assets, access premium features, and power the game’s ecosystem. These tokens ensure liquidity and allow players to interact within the game by buying, selling, or staking assets.
Examples:
- The Sandbox (SAND): In The Sandbox, players use SAND tokens to buy virtual land, in-game assets, and participate in the decentralized governance of the game’s virtual world.
- GALA Games (GALA): GALA tokens power a wide array of games on the Gala Games platform. Users can use GALA to buy NFTs and participate in governance.
3. Governance Tokens
Governance tokens give players a say in the future development of the game by allowing them to vote on key decisions, such as game upgrades, rules, or new features. These tokens encourage a decentralized and player-driven development process.
Examples:
- Decentraland (MANA): Players holding MANA in Decentraland can vote on governance proposals that influence the direction of the game. MANA is also used to buy virtual land.
- Illuvium (ILV): ILV token holders can vote on how game funds are allocated, game mechanics, and upgrades.
4. Non-Fungible Token (NFT) Coins
These coins represent unique, non-interchangeable in-game assets, such as characters, land, or items, stored on the blockchain. Players have true ownership of these assets and can trade, sell, or collect them outside the game.
Examples:
- Enjin Coin (ENJ): Enjin allows developers to mint NFTs for in-game use, and ENJ backs these NFTs. Players can trade, collect, and manage their NFTs across different games.
- Gods Unchained (GODS): A trading card game where each card is an NFT. The GODS token enables players to craft NFTs, buy packs, and participate in the governance of the game.
5. Metaverse Coins
Metaverse coins power vast, interconnected virtual worlds where users can interact, build, and engage in various activities. These coins facilitate transactions of virtual real estate, digital fashion, and other assets.
Examples:
- Decentraland (MANA): MANA not only enables governance but also powers virtual real estate purchases in the Decentraland metaverse.
- The Sandbox (SAND): Like MANA, SAND is used for purchasing virtual real estate, customizing avatars, and creating virtual experiences
Major Crypto Gaming Coins
These major crypto gaming coins are central to the rise of play-to-earn models, creating new opportunities for gamers to profit from their gameplay.
Axie Infinity (AXS)
Axie Infinity is a popular play-to-earn blockchain game where players breed and battle creatures called Axies. These Axies are NFTs (Non-Fungible Tokens), and players earn AXS, the game's native token, through participation.
The game has gained immense popularity, attracting millions of players worldwide.
Players can earn AXS tokens by participating in various activities within the game, such as battling other players, completing quests, and trading Axies.
AXS tokens serve multiple purposes within the Axie Infinity ecosystem:
- Governance: AXS holders can participate in the governance of the game, voting on proposals and decisions that shape the future of Axie Infinity
- Staking: Players can stake their AXS tokens to earn rewards. This incentivizes long-term holding and aligns the interests of players with the developers
- Transactions: AXS tokens are used as a currency within the Axie Infinity marketplace, allowing players to buy, sell, and trade Axies and other in-game assets.
Axie Infinity has also fostered partnerships with major industry players, further expanding its reach and influence.
The game's success has led to collaborations with brands, influencers, and other gaming platforms, creating a vibrant and dynamic community.
Blockchain gaming dominates Web3 with 4.4 million daily active wallets in Q3 2024.
The Sandbox (SAND)
The Sandbox is a blockchain-powered virtual world where users can create, own, and monetize their gaming experiences.
Launched in 2011 by Pixowl, the platform allows users to buy, sell, and trade digital assets such as virtual land using SAND, the platform's native cryptocurrency.
The Sandbox has introduced NFTs (Non-Fungible Tokens), enabling users to trade unique in-game items and assets.
This feature allows players to truly own their creations and monetize them by selling or trading them on the platform's marketplace.
The platform's growth is driven by its appeal to both investors and gamers alike.
Investors are attracted to the potential for high returns through the trading of digital assets, while gamers enjoy the creative freedom and economic opportunities provided by the platform.
The Sandbox also supports decentralized autonomous organizations (DAOs), allowing the community to participate in decision-making processes and shape the future of the platform.
This democratic approach ensures that the platform evolves in a way that benefits all stakeholders.
Decentraland (MANA)
Decentraland is a virtual reality platform operating on the Ethereum blockchain, where users can purchase virtual land and develop it.
Using MANA, players acquire parcels of LAND, which are unique NFTs representing specific coordinates within this virtual world.
Once they own land, players can build structures, create art, host events, and interact with other players, fostering a vibrant and dynamic community.
In Decentraland, users engage in a variety of in-game activities. These include attending virtual events, examining user-generated content, and participating in social gatherings, virtual concerts, and art exhibitions.
This immersive environment allows for endless creativity and interaction among users.
MANA tokens play an important role in the governance of Decentraland. Holders of MANA have the power to vote on platform governance, influencing future developments and decisions.
This decentralized approach ensures that the platform evolves according to the interests and needs of its community.
Gala Games (GALA)
Gala Games offers a wide range of blockchain-based games where players can earn rewards in the form of GALA tokens. These tokens are used for in-game purchases, upgrades, and trading NFTs.
Gala Games is focused on decentralization, ensuring that players have ownership of in-game assets. With several games already live and more in development, GALA remains a popular token in the blockchain gaming world.
Gala Games operates on the Ethereum network, but the team has announced plans to launch their own autonomous blockchain called Project GYRI, powered by the GALA token.
This move aims to enhance scalability and reduce transaction fees, providing a better experience for players.
The platform features a variety of games, including Township, Mirage, and Sands of Salzaar, each offering unique gameplay experiences and opportunities to earn GALA tokens.
Players can use these tokens to purchase in-game items, upgrade their characters, and trade NFTs representing virtual assets.
Illuvium (ILV)
Illuvium is a fantasy role-playing game built on the Ethereum blockchain.
In this open-world game, players collect and battle creatures called Illuvials, each represented as NFTs (Non-Fungible Tokens).
The game offers a rich and immersive experience, allowing players to explore a mysterious planet called Illuvium, filled with unique creatures and environments.
ILV tokens are used for various purposes within the game:
- Staking: Players can stake their ILV tokens to earn rewards, incentivizing long-term holding and participation in the game.
- Governance: ILV holders can participate in the governance of the game, voting on proposals and decisions that shape the future of Illuvium.
- Rewards: ILV tokens are used to reward players for their achievements and contributions to the game.
Players can also trade these Illuvials in decentralized exchanges, offering additional financial incentives. This allows players to buy, sell, and trade Illuvials, creating a dynamic and thriving in-game economy.
Star Atlas (ATLAS)
Star Atlas is a highly immersive space exploration and strategy game built on the Solana blockchain.
The game transports players to the year 2620, where they can explore the universe, engage in battles, and trade assets.
ATLAS is the game's primary token, used for in-game purchases such as spaceships, crew members, and other assets.
Players can build their fortunes by exploring resource-rich areas, establishing bases, and engaging in territorial conquest.
The game features stunning graphics powered by Unreal Engine 5, creating a visually captivating experience
Integration with Solana provides low transaction fees and fast execution, making it a top choice for blockchain gamers.
Players can trade goods and services both within the game and on external marketplaces, adding a real-world economic aspect to the gameplay
Star Atlas also offers a play-to-earn model, allowing players to earn rewards for their efforts
The game's community is vibrant and active, with players collaborating on quests, forming alliances, and competing for dominance in the galaxy.
Upland (UPX)
Upland is a property trading game that allows users to buy, sell, and trade virtual properties. Players use UPX tokens to acquire properties and participate in in-game economic activities.
The platform has gained attention for its vibrant community and frequent updates, including property auctions and tournaments.
In Upland, players can explore an interactive metaverse filled with virtual properties based on real-world addresses.
They can grow their virtual portfolio by buying, selling, and trading properties, and earn UPX tokens for their holdings every three hours.
The game also offers property collection challenges, where players can win one-time UPX rewards by completing specific tasks. Upland's community is highly engaged, with frequent events such as property auctions and tournaments that keep players invested and entertained.
The platform's focus on real-world property simulation, combined with the benefits of blockchain technology, makes it a unique and exciting experience for gamers and investors alike.
ApeCoin (APE)
ApeCoin is a relatively new gaming cryptocurrency designed for in-game transactions and trading. It supports gaming ecosystems and is often used to access exclusive in-game items and rewards.
ApeCoin’s growth is largely attributed to its backing from the popular Bored Ape Yacht Club (BAYC) NFT community, which has a strong and loyal following.
ApeCoin is an ERC-20 token used within the APE ecosystem. It serves as both a governance token and a utility token.
ApeCoin holders can participate in the ApeCoin DAO, a decentralized autonomous organization that allows them to vote on proposals and decisions regarding the ecosystem.
This governance model ensures that the community has a say in the development and direction of the platform.
In addition to governance, ApeCoin is used to access various games, merchandise, events, and services within the ecosystem.
The token's versatility and strong community support have contributed to its rapid growth and adoption.
Hamster Kombat (HMSTR)
Hamster Kombat is a viral, Telegram-based crypto game that lets users mine Hamster coins (HMSTR) by running their own virtual cryptocurrency exchange.
Launched in March 2024, the game quickly attracted millions of players with its engaging gameplay and crypto rewards.
Players take on the role of a CEO managing a virtual crypto exchange, starting as a humble "shaved hamster" and working their way up to become the prestigious "grandmaster CEO" of a tier-1 exchange.
The game involves leveling up, completing quests, and inviting friends to join the fun.
HMSTR tokens are used for in-game rewards and trading, and the game has a strong community of players who enjoy the competitive and social aspects.
The game is built on The Open Network (TON) and hosted on the Telegram messaging platform, making it easily accessible to a wide audience.
Recent updates to the game include the launch of Season 2, which expanded the game library and integrated external payment systems.
The game also introduced NFT mechanics and clans, adding more depth and variety to the gameplay.
KarratCoin (KARRAT)
KarratCoin (KARRAT) is a utility token used in games like "Karrat" for accessing various gaming services and rewards.
It's designed to support the gaming ecosystem by providing players with a means to engage in in-game activities, earn rewards, and trade assets.
In the game "Karrat," players can use KARRAT tokens to unlock special features, participate in events, and purchase in-game items.
The token operates on the Ethereum blockchain, ensuring security and transparency in transactions.
With a fixed supply of 1 billion tokens, KARRAT aims to maintain its value and provide a stable economic environment for players
The top 5 blockchain games account for over 80% of the total transaction volume.
Challenges and Risks of Crypto Gaming Coins
Crypto gaming coins present several opportunities for innovation in the gaming industry, but they also come with significant challenges and risks.
Understanding these challenges is important for both developers and players to navigate the crypto gaming space effectively.
Regulatory Uncertainty
One big problem for crypto gaming is that the rules aren't clear yet. Laws about crypto, especially for games, are still being figured out around the world.
Many governments have not yet provided clear rules for crypto gaming, and some jurisdictions have strict laws that prohibit or heavily regulate crypto transactions.
This creates an environment of uncertainty, making it difficult for game developers and players to operate without the risk of violating regulations.
Furthermore, inconsistent regulations across countries mean that what may be legal in one country could be banned in another.
For example, some nations are implementing frameworks that protect consumers and regulate crypto assets, while others remain more hostile towards such innovations.
Volatility of Crypto Coins
Another major issue is the extreme price volatility of cryptocurrencies. Crypto gaming coins, like most cryptocurrencies, are subject to dramatic price fluctuations.
The value of in-game assets or rewards earned through gaming can vary widely in a short period, which may discourage some users.
If a game's native token loses value rapidly, players could see their earnings significantly reduced or even wiped out.
Security Risks
The decentralized nature of blockchain technology provides a level of security, but it is not immune to hacking or fraud. Scams, phishing attacks, and wallet breaches are still common threats in the crypto world.
Additionally, since the crypto gaming ecosystem often involves decentralized exchanges, hackers can target vulnerabilities within these platforms.
This puts players’ assets at risk, as well as the reputation of the games built on these systems.
Lack of Consumer Protection
Another concern in crypto gaming is the lack of consumer protection. Traditional gaming platforms and payment systems are subject to regulations that protect consumers from fraud or provide a means of dispute resolution.
In crypto gaming, these protections are often minimal or nonexistent. If a player loses their assets due to a security breach or scam, there may be no recourse to recover their funds. This presents a significant risk, particularly for less experienced users.
Environmental Impact
The environmental impact of crypto mining, particularly for proof of work-based cryptocurrencies, is a growing concern.
Blockchain networks like Bitcoin and Ethereum consume vast amounts of electricity, contributing to carbon emissions.
While some gaming tokens use more energy-efficient consensus mechanisms like proof of stake, the industry as a whole faces criticism for its environmental footprint.
Scalability Issues
The scalability of blockchain networks also poses challenges for crypto gaming.
As more users interact with games on the blockchain, networks can become congested, leading to slower transaction times and higher fees.
This can diminish the gaming experience, especially in fast-paced or real-time games where quick transactions are essential.
Networks like Ethereum have faced congestion issues in the past, impacting the performance of decentralized applications, including gaming platforms.
Conclusion
Crypto gaming coins are changing the way players interact with virtual worlds. It offers true ownership of digital assets and the ability to earn real-world value through gameplay.
These coins are not only reshaping in-game economies but also giving players unprecedented control over their virtual experiences by using blockchain technology.
As gaming gets more decentralized and players can earn money while playing, crypto gaming coins will become even more important. This means a future where games are fun and profitable for everyone, everywhere.
FAQs About Crypto Gaming Coins
This FAQ section addresses some common questions that can help you narrow down your choices:
Crypto gaming coins are integrated into games, allowing players to earn them by completing tasks, winning battles, or trading in-game assets. These coins can be used for in-game purchases, staking, and governance within the game's ecosystem.
Crypto gaming coins are fungible tokens used as currency within games, while NFTs (Non-Fungible Tokens) represent unique in-game assets that can be traded individually.
Some popular crypto gaming coins include AXS from Axie Infinity, MANA from Decentraland, and SAND from The Sandbox
Traditional in-game currency is centralized and restricted to one game, while crypto gaming coins are decentralized, allowing users to trade and use them across different platforms and games.
Crypto gaming coins offer players the ability to earn real-world rewards, participate in governance, and trade in-game assets on decentralized marketplaces.
Yes. The value of crypto gaming coins can be highly volatile, and there is a risk of losing money due to market fluctuations or poor performance of a game’s economy.
Yes, there are risks such as market volatility, regulatory concerns, and potential security issues like hacking and scams
Yes. Many crypto gaming coins can be traded on cryptocurrency exchanges for other cryptocurrencies or converted into fiat currency like USD or EUR.
No. While many blockchain games use crypto gaming coins, some only use NFTs or traditional currencies. The use of crypto depends on the game’s design and economic model.
To get started, you can choose a play-to-earn game, create an account, and acquire the necessary crypto gaming coins to begin playing and earning rewards.
