P2E 2.0 - A New Economic Model for Gaming, the Audiobook


P2E 2.0 – A New Economic Model for Gaming, the Audiobook

In this special episode of The Metaverse Podcast, we have Jan Baeriswyl of Outlier Ventures going through with listeners the economics of play-to-earn (P2E) gaming. He covers 5 blockchain games, discusses Axie Infinity as a case study, and concludes with the roles that are emerging from the P2E ecosystem.

Posted by P2E 2.0 – A New Economic Model for Gaming, the Audiobook - December 2021

P2E 2.0

P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • Gaming is becoming increasingly relevant in today’s world. The average gamer spends 8+ hours per week in the digital realm
  • In P2E 1.0, only the most competitive tournament players would earn from gaming
  • In P2E 2.0, every gamer earns by playing in the emerging crypto-powered version of P2E. The addition of crypto tokens to fundamental game dynamics is what makes it P2E 2.0
  • The pandemic significantly accelerated the P2E movement
  • Axie Infinity is supporting/substituting the income of struggling households in emerging markets during COVID
  • Games are onboarding an entire new class of users to crypto
  • Will be covering 5 games in this overview. Included classics like CryptoKitties and Gods Unchained to provide some historical context

What better situation than an online game that not just provides entertainment but also a stream of income?

– Jan Baeriswyl


P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • Was one of the earliest attempts to deploy blockchain tech for leisure and a pioneer for NFTs
  • Gained popularity in December 2017. Was famous for crashing Ethereum because of the all time high number of transactions
  • Supply of kitties keep inflating as they keep mating
  • There are certain guarantees around the scarcity of rare cryptokitties:
    • Generation Zero cats are limited to 50,000
    • Most rare are Founder Cats which are the first 100 cats to ever exist
    • Mutations are another factor that increases rarity. It is expressed probabilistically as a new cat is bred according to the genetic algorithm
    • Exclusive cats that were given to team members and close contributors of the project
  • Players earn money through breeding and selling cryptokitties to collectors

Gods Unchained

P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • A turn-based digital card game
  • Its tremendous growth in 2019 have helped strengthen conviction around blockchain-based gaming projects
  • Players battle 1-on-1 against other players or a computer adversary, with the goal of reducing their opponent’s life to zero
  • Players start with a set of 140 digital cards for free and win additional cards as they play the game
  • Players can mint their card into an NFT when they have two identical cards. Minting allows them to own their in-game assets and to transfer/sell/borrow them even outside the context of the game


P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • Company operates a fantasy football soccer collectible game that uses NFTs
  • Sorare has signed with 126 soccer clubs
  • Each season, Sorare auctions cards for the players of the signed teams, with each card having versions with 3 different levels of rarity
  • Players can resell the cards on an internal marketplace
  • Sorare makes money on auctions of cards
  • The in-game performance of the cards depend on the real world performance of the player on each card
  • Players enter teams comprising of five cards in tournaments
  • Prizes are in ETH and additional NFT cards

Axie Infinity

P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • Game revolves around pets called Axies which can be bought, raised, and traded
  • Players can duel their team of Axies against one another to earn the in-game currency
  • Players generate revenue by breeding and selling Axies and trading other in-game assets such as land and native tokens

Zed Run

P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

  • A digital horse racing game
  • Has similar breeding mechanics to CryptoKitties and Axie Infinity
  • Users build a stable by buying, selling, and breeding digital race horses
  • An in-game currency, ZEST, is used to pay out prizes and to fuel the in-game economy

Innovation In In-Game Currencies

  • Present in Axie Infinity (through battling) and Zed Run (through racing)
  • This improves the value proposition of the NFTs and makes them yield-bearing/NFT lending viable
  • Yield Guild is acquiring useful NFTs and lending them out to gamers for a portion of the yields
  • Sorare and Gods Unchained create utility for their NFTs more indirectly through paying out prizes in tournaments

What We Have Seen Thus Far

  • NFTs provide an extremely flexible primitive for P2E games to allow users to own their in-game items
  • P2E games build on each other’s designs, evolving the mechanisms and adding new twists

Axie Infinity As A Case Study

  • Axie Infinity is the top NFT game and one of the most used apps on Ethereum
  • Each Axie is an ERC-721 token with unique characteristics that influence its rarity and in-game utility

A part of crypto’s mission from the beginning has been financial inclusion and open sourcing access to the digital economy.

– Jan Baeriswyl

  • Ecosystem consists of 2 tokens:
    • In-game currency called Smooth Love Potion (SLP)
    • Governance token called Axie Infinity Shards (AXS)
  • An Axie’s value is determined by a combination of rarity and utility:
    • Origin Axies are limited to a supply of 4000
    • Even rarer are Mystic Axies which are a subset of Origin Axies
    • Utility is determined by an Axie’s usefulness in battles
  • Axies have a breeding limit
  • Axies are organized in teams of 3 for battles against other teams. Players take turns playing cards that correspond to their Axie’s attacks until one team is fully defeated
  • Players win SLP for winning battles. SLP is burnt for breeding Axies, which partially offsets the inflation of the token
  • AXS holders can deposit their tokens for yield within the governance platform

Roles In An Emerging P2E Ecosystem

  • Emergence of 5 different roles:
    • P2E gamers
    • NFT investors
    • Breeders
    • Coordinators
    • P2E Gaming Guilds

P2E Gamers

  • P2E gamers play games and earn tokens for winning. Can be further differentiated into:
    • Casual gamers don’t rely on it as a source of income. Hence, they engage with the game in a more irregular manner and for fun
    • P2E gamers who play games as their main source of income are called Metaverse workers. They engage with it on a daily basis and know the ins and outs of the game intimately

NFT Investors

  • Most P2E games require an initial investment to get started
  • As this investment is not affordable for most people, NFT investors create a scholarship model where they lend out their assets to P2E gamers for a cut of their earnings


  • Many of the current P2E games are based on genetic algorithms
  • The newly created NFTs probabilistically inherit traits from their parents according to the algorithm
  • Traits can be dominant or recessive, with occasional random mutations
  • Breeders specialize in finding the best possible matches out of a given set of NFTs
  • Is capital intensive relative to other roles


  • A role that emerged to support the primary roles of P2E gamers, investors, and breeders
  • Identified the following types of coordinators:
    • NFT brokers — Needed to headhunt for an owner of a high value NFT
    • Breeding matchmakers — Needed to find the optimal combinations within a collection of NFTs
    • Scholarship managers — To manage communications with scholars and to help them when they encounter issues


  • All the roles described above can be organized within larger structures to form guilds
  • Can be formal DAOs or informal online communities managed via Discord
  • Can be focused on a specific game or operate across multiple platforms

P2E 2.0 - A New Economic Model for Gaming, the Audiobook Outlier Ventures

This podcast summary was prepared by The Reading Ape in collaboration with Outlier Ventures. The Reading Ape is a humble servant of the written word.

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