November 11, 2022

Games And Guilds

During the onset of the year 2021, a small buzz snowballed into a large number of users among play-to-earn (P2E) games, such as Axie Infinity. From the beginning of the year to July 2021, this game was able to multiply its daily average users (DAUs) by 30x - amounting to 300,000 daily average users by July 2021. Their Discord community has even reached the maximum capacity of a Discord server. Impressive!

One of the factors that contributed to the massive growth of Axie Infinity is the large network of players funded by gaming guilds. This article introduces the nature of gaming guilds, the usual use cases of guild tokens, and its contribution to the economy at large.

The Nature of Gaming Guilds

Gaming guilds have long existed before Web3 with the primary purpose of having a communal network of players helping each other to get stronger at the game and join competitions together. Web3 has evolved this definition by adding a “scholarship” feature.

Besides free-to-play games, the nature of play-to-earn games generally requires the ownership of nonfungible tokens (NFTs). While NFTs tend to be priced high, gaming guilds allow those who can afford tons of NFTs to sponsor users who aren’t willing to purchase one but are willing to play the game to supplement their income. Gaming guilds were able to lower the entry barrier to these P2E games.

Those who buy and own the NFTs are called managers, while those who play using borrowed NFTs are called scholars. Depending on their agreed terms, their profits are then divided among the two parties. In short, the manager brings the capital while the scholar spends long hours playing to farm gaming tokens.

Besides this model, some gaming guilds also serve as a community where managers and scholars can find each other and the profit sharing mechanism relies on a Web3 application, specifically the game itself. For example, P2E games like Aavegotchi and Pegaxy have an in-game borrowing system, where managers and scholars can use.

Utility of Guild Tokens

Some gaming guilds remained purely communal, but some have evolved into decentralized autonomous organizations (DAOs) with a token ingrained in its system - to name a few, Yield Guild Games (YGG), Merit Circle (MC), Good Games Guild (GGG). The use cases that are commonly seen among web3 gaming guilds revolved around governance, staking rewards, and early or exclusive access to game features.

P2E in the Economy

During the height of the COVID-19 pandemic, several jobs were lost due to severe economic downturn. Hence, many turned to alternative streams of income including P2E games. Players were even able to provide income to feed their families during this economic crisis and become managers themselves. It was truly a life-changing experience for several individuals in Philippines, for example.

Gaming guilds had a special role in this phenomenon as they provided an avenue for individuals under similar conditions and a new source of income without the need to risk some capital in acquiring in-game assets. Unfortunately, the bear market extremely affected the token value of gaming rewards - robbing off a lucrative revenue stream for many.

P2E games and gaming guilds have only set foot in this world for a few years and sustainability is yet to be established. Who knows? P2E games might really set off mass adoption for web3 in the years to come. What do you think would P2E games and gaming guilds look like in the future?