The first generation of play-to-earn games were all about getting paid to play the games you love, but there was one big problem with that concept. Few players loved the games.
With the earliest play-to-earn games focused on financially incentivizing players to play with no regard at all for what should be the main incentive of any game – enjoyment – it wasn’t a surprise that many left players feeling disappointed.
The simple fact is that most of the early blockchain gaming titles were rather dull. They were characterized by simplistic and repetitive gameplay that quickly became a chore, with poor graphics and little variation. The challenges became boring, leaving players stuck in a loop, where they simply kept on playing simply to keep grinding out those rewards.
That was until the rewards dried up. With many play-to-earn games built on poorly-thought out tokenomics models, the sustainability of the in-game rewards was dependent on a constant flow of new players buying in, enabling capital to keep flowing through its ecosystem. They were built on Ponzi-like economics and destined to fail.
A case in point is one of the most iconic play-to-earn games of all, Axie Infinity. It was once seen as the de facto champion of the blockchain gaming industry, with some players claiming to earn hundreds of dollars per week in rewards. The all-important NFTs, which represented the Axies needed to play the game, would sell for hundreds, if not thousands of dollars in some cases. But just as quickly as Axie Infinity rose to prominence, its economic system collapsed.
The tokenomics of Axie simply wasn’t sustainable. The value of the in-game cryptocurrency, Smooth Love Potion, was propped up by the entrance of new players buying newly-minted NFTs to start playing the game, but as more players joined, it needed ever more newcomers to sign up and invest to maintain its value. It quickly reached breaking point, and as the influx of new players tailed off, the price of SLP tokens entered into a downward spiral, reducing the once lucrative rewards to a mere pittance. And with that, the once-in-demand Axie NFTs quickly became worthless.
Axie Infinity is not the only play-to-earn game to have fallen victim to its own success, and there’s no suggestion that the team behind it planned things this way. They simply didn’t design the tokenomics very well, and failed to create a game that would genuinely keep people hooked through its enjoyable gameplay.
The blockchain game segment was helped by oversaturation. As people started taking notice of the concept, we saw a flood of games emerge touting their crypto rewards, and it became difficult for any one of them to attract a significant player base. The oversaturated market led to a decline in player engagement and retention, as players would move from one dull game to another, searching for something that might be able to hold their attention, fulfilling the promise of “getting paid to play the games you love”.
The challenge of play-to-earn tokenomics led to stagnation in the market, but with the rise of Bitcoin this year amid a new crypto bull run, we’re now seeing the emergence of a new generation of play-to-earn games. Thankfully, they not only offer more interesting and varied gameplay, but they’re built on more sustainable tokenomics too.
Funtico Forges A Different Model
A case in point is Funtico, which is not a game but rather, an incentivized gaming platform where players will find a whole catalog of games and a unique rewards system that’s based on one universal cryptocurrency, called $TICO.
Funtico claims to be bringing a fresh approach to gaming, aiming to attract traditional gamers who play for enjoyment. It’s offering them more control with the ability to own their in-game possessions, and more excitement through the prospect of financial rewards.
The competition in Funtico is largely centered on regular tournaments, and it’s offering some tantalizing rewards pools for those who compete in them. With its growing catalog of games (currently featuring 11 titles), higher standards in terms of gameplay and addictiveness, and the promise of many more games to come, there’s enough variety to keep players within its highly competitive ecosystem.
While Funtico does develop its own games, its platform is also meant to serve third-party games developers too. It’s especially interested in catering to Web2 game developers, who know how to create games that actually entertain, enticing them with the ability to add-on play-to-earn capabilities.
The real promise of Funtico’s platform though is its simplistic tokenomics structure, which is not dependent on a constant stream of new players signing up. The rewards pool, known as the The $TICO Bucket is constantly replenished by transaction fees imposed on those who buy and sell in-game items on the platform. With every game character, weapon, item, skin and power-up being tokenized, Funtico believes it can create a thriving marketplace that will ensure there are always plenty of rewards to go around. The idea is based on the premise that as players establish themselves in its ecosystem, there will be a certain baseline of economic activity, ensuring a regular flow of transaction fees that can be used for in-game rewards. So there’s no requirement for new players to keep joining to prop up the value of $TICO.
These rewards will be shared via tournaments, with bigger prizes going to the winners, but the enticing thing is that everyone earns some kind of prize. As new players join the platform, they’ll engage in more economic activity to keep the flow of funds in the $TICO Bucket topped up, so it can cater to ever-bigger tournaments.
Funtico has also put a lot of effort into maintaining liquidity across its platform. Liquidity is the lifeblood of any Web3 ecosystem, and 15% of the total supply of $TICO is reserved exclusively for this. In addition, Funtico’s $TICO Bridge helps to ensure the token can be easily bridged across supported networks including Ethereum, Avalanche, BNB, Polygon and Base. Moreover, because players can store their tokens in Funtico’s inventory, which is essentially a custodial wallet backed by insurance, transactions don’t always have to be processed on the blockchain itself, meaning no gas fees are applied to transactions.
Players still have the freedom to move their $TICO to their own wallet, retaining full custody, but when they do so they’ll have to pay the gas as normal.
The inventory system is actually seen as a bonus as it means players don’t have to deal with the hassle of crypto wallets if they don’t want to, so it should entice regular Web2 gamers who know nothing of how blockchain works to join its platform.
Can Funtico Change The (Play-To-Earn) Game?
It remains to be seen how well Funtico’s model will work in the long run. The platform itself is still a nascent one, and the current catalog of games is much smaller than what its creators eventually think it will grow to, but the promise is there.
With a more simplistic, yet logical tokenomics structure that’s designed to ensure $TICO constantly flows from player to game and back again, there’s good reasons to think Funtico can maintain the value of its in-game rewards. So long as it can manage that, the only challenge remains is to come up with better quality games that people actually want to play, and that will be the real litmus test for its long-term prospects.
