NFTs Fuel P2E Movement: Revolutionizing Gaming and Earnings
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The blockchain space moves fast, but zooming out from the day-to-day noise can give a clearer picture of where things might be headed. Looking back over 2021 and the first month of this year, a number of big themes are readily identifiable. NFTs fuel P2E movement, one of the standout trends in the industry.
There are many trends that could be pointed out. Increased regulation is an obvious one, and the way that countries including Russia, India, and the US are clarifying their positions on crypto. Alongside this, crypto is becoming more politicised, as industry leaders lobby politicians and actively support pro-crypto candidates.
The rise of DAOs presents an alternative organizational structure, while Layer 2 solutions, bridges, and interoperability become increasingly critical. DeFi continues to expand, albeit with a more sophisticated user base that is now more skeptical of forks and clones offering unsustainably high APYs. Meanwhile, the intriguing development of protocol-owned liquidity promises to free DeFi from its reliance on mercenary capital. Furthermore, NFTs fuel the P2E movement, adding another layer to the evolution of decentralized finance.
These are all important, of course, but they matter most to DeFi natives who live and breathe crypto. What about the ways blockchain is starting to change the lives and habits of regular people, on a global scale?
Here are five emerging trends to watch for 2022.
More nations consider bitcoin strategies
When El Salvador made bitcoin legal tender in September 2021, it set an unthinkable precedent. The move aimed to boost economic development and job creation for the struggling Latin American country, burdened by foreign debt payments.
No other country has followed suit yet. However, signs indicate this may change. Other nations facing economic hardship are looking to stabilize their balance sheets, promote financial inclusion, and regain independence from foreign lenders. Several Central American countries are rumored to be considering following El Salvador’s lead. Turkey, grappling with high inflation, may also be on this path. President Recep Tayyip Erdogan recently met with El Salvador’s President Nayib Bukele, with bitcoin reportedly on the agenda. It’s not just low-income countries either. A proposal to make BTC legal tender in Arizona is currently making its way through the state senate.
Play-To-Earn goes mainstream
P2E was one of the stand-out blockchain success stories for 2021, as games like Axie Infinity actually paid gamers to play them, on-boarding millions of new people into the crypto world in the process. Blockchain games have proven particularly successful in low-income countries, where users can earn substantially more by playing their favourite titles than they would in a conventional job.
Guilds have been key to the development of the space. These are large, organized groups of gamers who share resources, including valuable NFTs. These NFTs can boost success rates and increase earnings. Scholarships are granted to make NFTs representing characters and in-game items available to players. In return, players give a percentage of their daily earnings. Large guilds like Yield Guild Games (YGG) can have tens of thousands of users. Crypto Gaming United (CGU.io), launched last year, has almost 100,000 players. These players come from countries such as the Philippines, Russia, Poland, Lebanon, Africa, Bangladesh, Sri Lanka, Papua New Guinea, and Indonesia. Over 6,000 users earn through scholarships. Guilds often have DAO structures. They can raise significant funds to invest in digital assets. For example, the 40,000-strong Play It Forward DAO raised $6 million last month to scale its scholarship program.
The P2E sector is only just getting started. Expect it to continue to expand, especially in parts of the world where there are high rates of youth unemployment.
NFTs expand beyond digital art
Non-fungible tokens may have gained popularity as a means of trading digital art, but their potential is far greater than buying and selling JPEGs. As noted above, in-game assets and characters represented by NFTs are already driving the P2E movement in the blockchain space, providing players with a means of monetising their work and experience – either by selling high-value NFTs, or renting them out to other gamers.
Beyond this, there’s the trend of NFTs being integrated into DeFi and used to create new financial instruments. Projects including Teller Finance and Charged Particles are launching NFTs with real financial utility, including yield-bearing NFTs, rights to take out a loan, and more. That’s before we even start on the broader use cases for NFTs in terms of identity and access to permissioned Web3 services.
Blockchain comes to HR
The coronavirus pandemic sparked increased interest in gig work and crypto adoption. It was predictable that freelancing for crypto would become a theme in 2021. The Freelance Revolution is just getting started. This growth is driven by changing needs and circumstances, as well as the rise of freelancer portals and blockchain-enabled sites. NFTs fuel the P2E movement, contributing to the broader growth of the crypto freelancing space.
Heading into 2022, we’re seeing a broader pattern of blockchain being integrated into HR processes to streamline and automate recruitment, employment terms and accounting, as well as actual crypto payments. Smart contract-powered platforms like CryptoTask and LaborX.com enable freelancers to connect directly with customers, cutting out middlemen and the inefficiency and costs they bring, while still protecting users. Meanwhile, crypto is being integrated with accounting systems via software like BitWage, deel and PaymentX, so that regular companies can pay permanent and contract workers in crypto, automating the invoicing and settlement process to save time and eliminate manual error.
Crypto flexes its green credentials
Bitcoin has come under fire for its power-hungry proof-of-work consensus. This prompted Tesla to suspend BTC payments in May 2021. The suspension remained until 50% of the electricity used by miners was generated from clean sources, a threshold that may have already been reached. Tesla’s decision accelerated interest in clean crypto. Eco-friendly mining received a boost when China kicked out its miners, many of whom relied on coal-generated electricity. More recently, European regulators called for a ban on proof-of-work-mined cryptos. They encourage the industry to focus on proof-of-stake blockchains. Options like Cardano and Solana have gained traction over the past year. It’s fair to expect that trend to continue. The blockchain industry is likely to take a more active approach to corporate social responsibility—or its decentralized equivalent.