Over the past decade, people have gradually shifted from the traditional methods of earning money to the gig economy. The COVID-19 outbreak hastened it even further as many turned to Web3 for alternative sources of money. Starting from the “Play to earn” games, such as Sandbox or Axie Infinity, the concept of 'X-to-Earn' has gained a solid foothold in the crypto and Web3 space, and has evolved into various incarnations. Within a little over a year, many concepts (Move to earn, Watch to earn,...) have been released, encouraging people to participate in the Blockchain world. To learn more about different types of X to Earn models, let’s keep reading!
1. What Is The Essence of the “X to earn” Model?
The economic model of X to Earn requires participants to earn the rewards they deserve through X (that is, various actual behaviors). Unlike the points and virtual objects given out during Web2, these rewards can be exchanged for actual money. It intends to disrupt the centralized control distribution model that predominated in the traditional Web2 era. To put it another way, the core of X to Earn is an interest revolution that gives people back the rights and interests that were once theirs.
2. Different Types of “X to earn” Models
The "X to earn" trend was started by Play to Earn game development, which enables players to earn incentives by taking on tasks or completing objectives while playing online games. Players can convert the gaming or metaverse tokens they win for fiat money on most exchanges. According to Statista, in 2021, approximately 3 billion people played video games around the world. This number, which corresponds to around 40% of the world's population, is believed to have enormous potential to generate income for the people.
Take example of Axie Infinity Blockchain gaming, it has more than 1,000 000 daily active users who are mainly distributed across Southeast Asia. Axie Infinity saved the lives of lower-class gamers in the Philippines who could still play video games to make a livelihood after losing their employment during the COVID-19 outbreak. Such Axie tokens are earned in the game then can be converted into fiat currency, which is subsequently used to buy milk powder, motorcycles, and other daily necessities. Other gamers can purchase virtual properties using the money they earned from playing this game.
Related: Integrating Blockchain Technology into Gaming Industry with NFT Game Development
Stake to earn model is likely one of the oldest X to earn strategies for earning cryptocurrency. It’s an earn while you sleep mechanism, which only requires you to HODL your coins in your wallet for a certain amount of time. When you stake your coins, for instance, with Binance or Solana, you are locking them on the platform for a predetermined period of time. While the coins are locked in, you won't be allowed to use them, but you will still be its owner.
Your money will be used by the platform to enhance network security. When you stake your coins, the coins are sent to validators who verify transactions to keep the blockchain's integrity.
Unlike Play to earn game development when people have to spend a long time in front of the computer playing games to earn tokens, M2E projects allow you to gain income but still remain healthy and active. It attempts at garnering participation in the Web3 space by encouraging users to engage in physical activities to earn rewards.
STEPN, a Web 3 lifestyle sports program based on Solana with social and game components, is one of the most well-known M2E fitness apps. Users of STEPN can equip NFT sneakers as well as gems to enhance the properties of the footwear. By running, jogging, or walking outside, users can earn rewards. Rewards may come in the form of NFT assets or tokens, which may be exchanged on the market for real money.
This M2E paradigm, which integrates mobile devices with blockchain games, encourages the development of the Web3 world as well as a low-carbon and environmentally responsible lifestyle.
Related: Are You Ready With The Next Crypto Trend: Move To Earn Concept?
In the participate-to-earn approach, you can be qualified to join a network's or Web3 ecosystem's DAO by holding a predetermined number of tokens. A DAO is in charge of mapping out the project’s future and distributing its token supply. Simply holding a stake in the platform will provide you access to certain benefits in addition to voting rights.
Watch to earn is a concept where users watch and share videos to earn rewards. In the past few years, video content has emerged as the main communicative medium on the internet, yet only platform owners and content producers are included in its income model. Therefore, this model was developed to reward viewers and offer them access to unique benefits related to the content creators, thus bridging the gap between them.
Have you ever wondered “How to earn money while learning about cryptocurrencies?”. If you can gain income, you may have more motivation to acquire something new. Therefore, the new concept “Learn to earn” has existed along with the Web3 platform. It is the concept of giving you tokens only for learning about cryptocurrencies, typically in the form of some tokens you recently discovered. Unlike the conventional approach, where people must pay to learn, the L2E model incentivizes learning.
Through this X to earn model (where X stands for Learn), both you and the company introducing that token also gain benefits. While you can earn crypto, the company can increase the percentage that you become their investors. In a market that is becoming increasingly competitive, the tokens are striving for market share. By teaching you and getting you invested in their projects by making you also investors (even in very small amounts), they have the chance to grab attention from different crypto enthusiasts over the world.
3. Final Thoughts: The future of “X to earn” Models
To conclude, the 'X-to-Earn' space is expanding, and we'll undoubtedly see more iterations of the concept emerge in the coming years.
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