How YGG Makes Play-to-Earn Economically Sustainable
Early models were not sustainable, with inflationary tokenomics, high barriers to entry, and no value for players in the long term. Most early play-to-earn games came with inflationary tokenomics, expensive entry, and no value for players in the long run. Yield Guild Games has been one of the major innovators when it comes to solving these issues. Instead of focusing on renting game assets, YGG built a wider ecosystem that supports long-term sustainability. It does this by lowering the barriers to entry, diversifying its treasury, creating value through player skills, and building a strong structure with its DAO and SubDAOs. This will turn play-to-earn from a temporary trend to a long-lasting economic opportunity for players all around the world.
YGG solved this with its scholarship program in which the DAO buys game assets and lends them to players who cannot afford them. The players, known as scholars, will then use these to play the game and split the earnings among themselves, YGG, and their manager. This model reduces entry barriers, ensures that idle NFTs are utilized, and aids the growth in game communities by onboarding more players. A larger active player base contributes to strengthening the long-term health of any in-game economy.
Another way that YGG builds sustainability is through its diversified treasury. While individual players can only participate in a few games, YGG invests in many different Web3 games at once. Its treasury holds NFTs, virtual land, and a variety of in-game assets. This reduces risk because YGG does not depend on the success of any one game. If one is doing poorly, others help to balance out the losses. YGG actively uses its assets, whether it be through scholarships, staking, or a number of yield-generating methods. This ensures the treasury is always at work, generating returns that can be reinvested in growing the ecosystem.
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