What Are NFT Games?

NFT games use blockchain-backed crypto assets to enhance gameplay and reward players. Learn more about NFT games and “play-to-earn” gaming models with FTX.

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Non-fungible token (NFT) games are part of a booming trend referred to as GameFi, which combines unique crypto assets and decentralized finance (DeFi) to form online gaming experiences backed by blockchain technology. Unlike NFT collectibles that investors simply hold in your cryptocurrency wallet, NFT games use tokens as a fundamental component of online gameplay. 

Traditional online games focus on “play-to-win” strategies and give players the chance to purchase their upgrades. But GameFi takes a more multifaceted approach that includes “play-to-earn” opportunities. With NFTs and native gaming tokens embedded into the online gaming experience, players can earn these tokens as they move or progress through a game. Players can  use the game’s tokens to enhance gameplay, trade with other players, or earn a steady income by selling tokens on external marketplaces or exchanges.  

Game developers introduce NFTs and tokens into gaming environments through smart contracts that are secured by blockchain technology. These contracts are responsible for automatically enforcing the rules that control how NFTs or native gaming tokens are used within the game. For example, CryptoKitties—an NFT game on Ethereum that enables players to breed, buy, trade, and collect digital cats—uses their geneScience smart contract to ensure each cat created is one of a kind. 

To further explore NFT games, the following sections explain: 

Types of NFT Games 

compilation of various NFT game characters

There are two main types of NFT games in the crypto space:

  1. Games with NFT collectibles 
  1. Play-to-earn crypto games

1. Games With NFT Collectibles

In-game NFTs are tokens that players can earn or collect through their gameplay. These NFTs could be things like game characters, character skins, tools, or weapons. The values of in-game NFTs are initially set by the game developer based on features like visual appearance, uniqueness, rarity, or how useful they are during gameplay. At their core, in-game NFT collectibles inherently come with an element of chance, as a player must earn them by overcoming obstacles or “stumble upon” them during their gaming journey.  

Players who earn in-game NFTs are the sole owners of these tokens. Players can use these NFTs to their advantage during gameplay, trade them, or sell them to other interested players for a profit via an NFT marketplace like FTX US. A good analogy for in-game NFTs is a rare Fortnite skin. If a Fortnite skin was offered as an NFT during gameplay, a player could unlock it by winning a challenge or finding it and become its sole owner. The player could then use this skin in future gameplay or sell it to the highest bidder on an NFT marketplace.

2. Play-to-Earn Crypto Games

Play-to-earn (P2E) crypto games differ slightly from games that offer in-game NFTs. P2E games allow players to earn NFTs or other tokens as a form of steady income stream while progressing through the game. Typically, as a player puts more time, energy, and investments into these games, the more potential they have to earn game-native NFTs or tokens with real monetary value. P2E NFT games typically combine in-game NFTs with game-specific cryptocurrencies that can be used on decentralized exchanges (DEXs).  

How Do Play-to-Earn Crypto Games Work?

To better understand how P2E crypto games work, consider the global phenomenon that is Axie Infinity. This online crypto game is built entirely around NFTs and its fungible ERC-20 tokens. To get started, players must invest in three NFTs (known as Axies) upfront to create a starter team. Once this team is created and gameplay begins, players can earn Smooth Love Potion (SLP) or Axie Infinity Shard (AXS) tokens as they complete challenges within the game’s ecosystem. These tokens can then be used to breed new Axies, which makes them a commodity within the Axie universe and thereby creates an economy.

NFT games like Axie Infinity have grown in popularity in low-income countries like the Philippines. Its P2E model enables players to earn supplemental income to pay for things like food, medicine or utilities. Axie Infinity “scholarship” programs were even introduced in the Philippines to help players who cannot afford the upfront costs of a starter team to rent one to start earning SLP tokens.

Making Money with NFT Games

NFT games could potentially prove to be a source of income for some players. The amount of money a player may earn is based on how other players value game-oriented NFTs or native token assets within a game. Typically, the rarer (or more useful) the NFT asset or the more in-demand a native token is, the more money a player can make selling those NFTs or tokens on marketplaces or crypto exchanges. 

Risks of Investing in Crypto Game NFTs or Tokens

Risks of playing NFT games, especially P2E crypto games, involve liquidity of markets for game-oriented NFTs or native token assets and the time, energy, or money invested into acquiring these assets. Just like regular crypto assets, the market value given to in-game NFTs and tokens is  speculative, meaning their worth is based on how other players perceive their value. The size of an NFT game’s player pool can also affect how liquid an NFT or token asset is. If a player is unable to liquidate their game-oriented NFTs or token assets into cash or more crypto, they could lose money. 

Another downside to NFT games is losing an NFT during gameplay or due to user error while moving assets around. Players can lose NFTs as a part of the rules of the game. Players could also lose their NFT from transferring the token from one wallet to a separate wallet that does not support the type of NFT sent. Another common way some players lose their NFTs is as victims of a scam or fraud, including mistakes like interacting with a malicious smart contract designed to steal an NFT.

6 of Today’s Top NFT Games

Today’s top NFT games incorporate blockchain technology within the foundational mechanics of gameplay. Not only does this provide players with an enhanced gaming experience, but it enables them to monetize in-game NFTs or gaming tokens. Most of the NFT games listed below center around collecting unique crypto assets within the game’s ecosystem to progress or gain an upper hand.

  1. Axie Infinity: One of the most popular NFT games, Axie Infinity uses NFTs and native ERC-20 tokens as core elements of the gaming process. Players collect fantasy NFT monsters known as Axies and battle with, trade, or breed them.  
  1. Sorare: Centered around the structure of fantasy football, Sorare enables players to collect and build a fantasy soccer team using NFT player cards. Sorare players can earn rewards when their chosen team members perform well in real life. Players can also participate in virtual tournaments and trade virtual collectible cards with other Sorare players. 
  1. Evolution Land: As a city builder-style game, the Evolution Land ecosystem lets players buy land, construct buildings, and develop their properties using NFT collectibles. Each continent within Evolution Land lives within a different blockchain, and the game will have up to 26 continents in the future.  
  1. Gods Unchained: Led by the former game director of Magic The Gathering: Arena, Gods Unchained is a free-to-play competitive NFT trading card game that rewards players as they create powerful decks and battle opponents. Players maintain sole ownership of their NFT cards on Gods Unchained and can use them, trade them, or sell them at any time. The main goal is to work towards creating a deck that can withstand and battle against a wide variety of game tactics.  
  1. CryptoKitties: The CryptoKitties ecosystem enables players to collect digital NFT cats and breed them to create one-of-a-kind cats. As mentioned previously in this article, CryptoKitties uses the geneScience smart contract (which is based on real genetics) to ensure each cat that’s created is unique to the owner. Players can trade their CryptoKitties or earn rewards from building bigger collections and playing various games and puzzles within the CryptoKitties universe.  
  1. Splinterlands: Splinterlands is another trading card NFT game that enables players to earn crypto rewards from building their deck and battling against other players. The game is unique for being built on its own blockchain, and players can pick from hundreds of different card variations to enhance character abilities and strengthen their deck. Splinterlands also offers several in-game opportunities such as side quests and tournaments. 

Buy, Sell, or Trade Gaming NFTs or Tokens with FTX 

As GameFi popularity grows, more traditional gamers are exploring the world of NFT games to experience the enhanced gameplay and crypto rewards offered in these blockchain-based games.

For gamers interested in buying, selling, or trading gaming NFTs or tokens, the FTX US NFT marketplace and crypto exchange is here to help. Download the FTX US app today and sign up in less than three minutes to take advantage of the US-regulated exchange platform. 

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