To choose a play-to-earn (P2E) project that can last, look first for a game people would play even without rewards, then check the team’s track record, the token economy’s balance between rewards and spending, security audits, the real cost of getting started and how easily you can exit. Most P2E games launched during the 2021 boom lost the bulk of their token value, so long-term earning depends far more on the project’s fundamentals than on today’s reward rate.
This guide explains how P2E models work, what went wrong in the first wave, and a practical checklist for judging whether a project has staying power.
What a play-to-earn game is
In a traditional online game, the items you buy or earn belong to the publisher’s database. You cannot legally sell them, and they disappear if the game shuts down. P2E games use blockchain technology to change that:
- In-game items as NFTs: characters, land, weapons or cosmetics are tokens in your crypto wallet, which you can trade on marketplaces.
- Fungible reward tokens: players earn a game token for activities such as winning matches or completing quests, which can be traded for other cryptocurrencies.
- Wallet as account: you usually log in by connecting a wallet, and transactions go directly to and from it.
Players who want to cash out or move value between games often need to convert tokens. Non-custodial swap services such as LetsExchange, at https://letsexchange.io/, let you exchange one cryptocurrency for another without holding funds on the platform. That flexibility is useful, but every conversion has fees and, in many countries, tax consequences.
What the first P2E wave taught players
Axie Infinity became the best-known P2E game in 2021, with players in countries such as the Philippines earning meaningful income from its reward token. Scholarship programs even formed, where owners lent NFT characters to players in exchange for a share of rewards. By 2022, however, token prices had fallen sharply, earnings shrank, and the Ronin network bridge that supported the game was hacked for hundreds of millions of dollars in crypto. Many smaller P2E projects fared worse, with some shutting down entirely.
The core problem was economic. When most players join to earn rather than to play, the only source of money is new players buying in. Rewards are paid in a token that is constantly being created and sold, so its price falls unless there are strong reasons to spend or hold it. When growth slows, the cycle reverses quickly. Since then, many studios have shifted to a “play-and-earn” model that puts gameplay first and treats earning as a bonus.
How to evaluate a P2E project for the long term
1. Is the game actually fun?
This is the most important test. Try the free version or watch extended gameplay. Would you or your friends play it for a month if it paid nothing? If the answer is no, demand will depend entirely on rewards, and that rarely lasts. Look for depth: progression, competitive modes, social features and regular content updates.
2. Who is behind it?
Check whether the team is publicly identified, has shipped games before and has credible backers. Anonymous teams are not automatically dishonest, but they remove accountability. Read the whitepaper and roadmap, then compare what was promised with what has been delivered on time.
3. Are the tokenomics sustainable?
Look at how tokens enter the economy (rewards, team and investor allocations) and how they leave it (fees, crafting, upgrades, burns). A healthy design has meaningful “sinks” that players want to use, not just reasons to sell. Also check vesting schedules: if large allocations for insiders unlock soon, selling pressure can hit the price. Many games use two tokens, one for governance and one for rewards; understand what each does.
4. What does it cost to start, and can you exit?
Some games require buying NFTs before you can earn anything. Calculate how long it would take to recover that cost at current reward rates, then assume rewards could fall. Check trading volume on marketplaces and exchanges: if few people are buying, you may not be able to sell your items or tokens at a fair price.
5. How secure is it?
Look for smart contract audits from recognized firms, a bug bounty program and a history of handling incidents openly. Consider the blockchain it runs on, including bridges between chains, which have been frequent targets of attacks.
6. Is the community real?
Active Discord servers, player-made content and daily active user counts are better signals than follower numbers, which can be bought. Watch how the team answers hard questions. A community focused only on price is a warning sign.
Green flags and red flags
| Green flags | Red flags |
|---|---|
| Free-to-play entry or low starting cost | Expensive NFTs required just to begin |
| Identified team with game industry experience | Anonymous team, vague roadmap |
| Clear token sinks and published vesting schedules | Rewards funded mainly by new player purchases |
| Audited contracts and bug bounty | No audits or unclear contract ownership |
| Regular gameplay updates | Updates focused on token price and hype |
| Healthy marketplace liquidity | Promises of guaranteed or fixed returns |
A simple way to compare projects
When you are choosing between several games, score each one from 1 to 5 on gameplay, team, tokenomics, security, community and cost of entry. Give gameplay and tokenomics double weight, since they decide whether players stay and whether rewards hold value. Write down the reasons for each score, then revisit them every few months. A project that looked strong at launch can weaken quickly if updates stall, active players drop or insiders start selling, and a written record makes those changes easier to notice before they cost you. Set a clear rule in advance for when you will withdraw, such as a sustained fall in daily players or a missed major roadmap milestone, so emotion does not make the decision for you.
Managing your risk
- Only put in what you can afford to lose. Treat any purchase as entertainment spending, not a guaranteed investment.
- Take profits periodically. Converting some rewards to a stable asset reduces exposure to a falling token.
- Diversify across games and chains rather than concentrating everything in one project.
- Protect your wallet. Use a hardware wallet for significant holdings, never share your seed phrase, and be wary of links in direct messages, which are a common phishing route.
- Track your transactions for taxes. In the US, the IRS generally treats crypto earned from games as income and trades as taxable disposals. Rules differ in other countries.
Moving value between game ecosystems
Different games run on different blockchains, so moving from one to another often means swapping tokens. If a project you are exploring runs on the Zilliqa network, for example, you might swap ETH to ZIL to pay for transactions or items there. Before swapping, compare the rate and fees, double-check the receiving address and network, and send a small test amount first when using a new service.
Where P2E gaming is heading
The survivors of the first wave, and newer studios, increasingly design blockchain features to be optional or invisible: players enjoy the game normally, and ownership of items matters mainly when they want to trade. Larger game studios remain cautious, and many mainstream players are skeptical of NFTs. That makes quality gameplay even more important for any P2E project hoping to build a lasting player base. The broader benefits of gaming still apply, as our look at the advantages of online gaming discusses, and crypto’s wider role in payments is covered in our article on digital payment trends in 2023.
This article is general information, not financial or investment advice. Crypto assets are volatile and you can lose all the money you put in.
Frequently asked questions
Can you still make money from P2E games?
Some players do, but earnings are usually much lower and less predictable than during the 2021 boom. Treat any income as a bonus rather than a reliable wage.
What is the biggest risk with play-to-earn games?
Falling token and NFT prices. If a game’s economy depends on new players buying in, rewards can lose most of their value quickly when growth slows.
What are tokenomics?
Tokenomics describes how a game’s tokens are created, distributed, used and removed. Sustainable designs balance rewards with genuine reasons to spend or hold tokens.
Are P2E earnings taxable?
In the US, crypto received as game rewards is generally treated as income, and selling or swapping it can trigger capital gains. Check the rules where you live.
Do I need to buy NFTs to start playing?
Not always. Many newer games offer free entry and let you earn or buy items later, which is a lower-risk way to test whether you enjoy the game.
