The gaming industry’s willingness to incorporate blockchain technology has created a new era of play-to-earn (P2E) business models. In these games, non-fungible tokens (NFTs) take center stage, allowing players to earn real-world value through in-game activities.
Where gamers previously could only hope to profit from advertisement revenue, sponsorships, and donations, NFT-based gaming creates opportunities to profit from their investments and skills.
While NFT-based games‘ primary objective is to provide entertainment, much like most other video games, they also share some similarities with other online platforms involving financial transactions, such as moneyline betting in the sports world or trading stocks and shares and contracts on the stock market.
With that in mind, we have prepared this article to highlight some of the ways you can potentially maximize profits from NFT-based games.
Understanding NFT-Based Games
Before we delve into the various strategies, it is essential to have at least a basic understanding of NFT-based games and how they work. These games feature digital assets, known as non-fungible tokens (NFTs), that can represent in-game items such as characters, weapons, special abilities, and even virtual land ownership.
These NFTs are unique, and their ownership can be verified through blockchain, distinguishing them from traditional in-game items that usually lack real-world value and are confined to the game’s ecosystem.
Players can own, sell, and trade their in-game assets like real-life collectibles or physical property. The value of these digital assets can fluctuate based on demand, much like stocks or cryptocurrencies, thanks to gamers’ ability to trade NFTs on dedicated or specialized marketplaces.
Popular NFT-based games include Axie Infinity, The Sandbox, Decentraland, Sorare, and Gods Unchained, many of which you can read about here at Castle Crypto. Each provides a unique twist on the NFT-based game genre, from Roblox-like virtual worlds to collectible cards whose values fluctuate based on real-world events.
Strategies for Maximizing Profits
As NFT-based games share many properties with other financial instruments, many strategies investors use to maximize potential profits transfer to this digital realm. Most revolve around thorough research, early adoption, continual monitoring, and diversification; let’s get started.
It may seem obvious, but choosing the right game is paramount because not all NFT-based games offer the same potential profit levels. Just as you would not invest in a company based on having a cool name or making a healthy profit one year, you should delve deep into the inner workings of any NFT-based game you plan to dedicate your time to.
Look for games with strong communities, active development teams that converse with customers, and clear roadmaps. An NFT-based game that looks great on the outside could be a damp squib if it lacks scope for growth.
Early adoption and involvement in a game can result in significant advantages and gains. Early adopters often benefit from lower prices for in-game assets and can often receive freebies, while getting hold of assets is usually easier during a game’s early stages. Back in December 2019, virtual land in The Sandbox sold for $48 in a presale. By November 2021, similar plots of land were changing hands for $4,000.
The value of some assets can explode once the NFT-based game becomes more mainstream. Once the mainstream media picks up on a story, such as a mystery investor paying $450,000 to be Snoop Dogg’s digital neighbor in February 2022, your initial investment’s value could skyrocket.
Remain Active, Diversify Your Assets, and Stay Informed
NFT-based game developers prefer players to actively participate in their games rather than those players acquiring assets and hoping their value increases. As such, those who engage in in-game activities like completing quests and interacting with other players can yield unique rewards.
Some play-to-earn games, such as Axie Infinity, enable active players to earn tokens that can be used within the game or traded on exchanges for pure profit.
Diversification is an essential strategy in traditional investments and applies to NFT-based games, too. Instead of putting all of your eggs in one basket, such as buying only avatars, land, or items in one particular game, invest in a variety of assets across several platforms.
This increases your chances of profiting from different aspects of those games and reduces the risk of incurring losses should one asset’s value suddenly decrease.
Staying informed about market trends is another habit that should be part of your daily routine. The NFT market is dynamic, with trends and values rapidly changing. Following news sites, regularly checking in at Castle Crypto, joining community forums, and engaging with other players are excellent ways to stay abreast of current NFT-related affairs.
Become a Landlord and a Leader
Some platforms, like Decentraland, allow users to rent their virtual land to earn passive income. This is an excellent feature if you own valuable in-game assets but don’t have time to actively use them. In addition, some NFT-based games offer governance tokens.
These specialized tokens enable players to vote on decisions affecting the game’s future, allowing you to influence the game’s development and direction. Furthermore, holding governance tokens can also provide additional rewards.
Do Your Own Research
After reading this article, it should be evident that NFT-based games offer gamers a unique opportunity to earn real-world value from their in-game activities. While the primary function of these games is entertainment, approaching them like a traditional investor can help maximize any profit you make while enjoying yourself.
Start by thoroughly researching games and their development teams before investing your hard-earned cash. Researching a potential investment helps you find the perfect NFT-based game and avoid scams.
Sadly, due to the popularity of NFTs, scammers are active, so ensure you verify the legitimacy of platforms and marketplaces before making any transactions.
Like in traditional investing, you should start small; you should never run before you have learned to walk. You can increase your investment as you become more comfortable with a game’s market and mechanics. Remember, although short-term gains are possible and popular, being in something for the long haul usually reaps better rewards.
Finally, ensure you monitor broader market conditions, not just those that directly impact your assets. Changes in the broader market can indirectly impact your NFT-based game, causing havoc with your assets’ valuation.
Good luck!
This is not financial advice. Always do your own research before investing in crypto tokens or gambling.
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