When the Economy Is Stronger Than Gameplay: The Paradox of Web3 Games

In the world of Web3 games, the idea of Play-to-Earn has long been perceived as a revolution: players could receive real tokens for in-game activity. In practice, it has become clear that even carefully designed economic models alone cannot retain users or foster sustainable gaming communities. Today, many projects demonstrate that without deep gameplay and organic engagement from real players, their economies grow only on speculation and short-term hype rather than genuine interest.

Economic Models and Their Limitations: Pros and Cons of Well-Designed Tokenomics

Many economy-focused games attempt to attract users through promises of earnings, predictable rewards, and integration with DeFi. For example, dual-token models that separate marketing tokens from utility tokens create a balance between rewards and value within the ecosystem. These models appear attractive to investors and early adopters, but they do not always guarantee long-term stability.

Pros

• Clear reward mechanics: users understand what they can receive tokens for and why.
• Additional financial opportunities: through staking, DEX features, or token hybrids, players and investors can find different ways to monetize.
• NFT asset ownership: blockchain-verified ownership can give players a sense of control over digital assets.

Cons

• Lack of organic onboarding: most Web2 players do not join P2E projects for the gameplay, as they are financially oriented, and they quickly leave the project when compensation decreases.
• Games survive on speculators rather than players: when the core economy depends on the inflow of new funds to support token prices, it begins to resemble a financial instrument rather than a game.
• Rapid audience burnout: interest in projects often declines after the first profit cycle, and users leave as soon as yields drop or more profitable schemes appear, leading to a sharp decline in DAU.
• Gameplay becomes secondary: the focus is placed on “play to earn” rather than “play for fun,” resulting in weak player retention and rapid churn.

An economic model may be brilliantly designed, but if no one wants to play the game because of its gameplay, the economy becomes the primary yet false motivator and ultimately collapses.

Interesting Experiments with Tokenomics

Some projects attempt to address sustainability issues through changes in tokenomics. For example, in recent years Axie Infinity has been reworking its P2E model into a more balanced “play-and-earn” approach: the Sky Mavis team disabled large-scale SLP token emissions and introduced bAXS tokens that are account-bound and non-transferable on secondary markets to reduce selling pressure and refocus the game on engagement.

This shows that even major projects are trying to move away from the simple P2E approach, but it also confirms that the original model with high emission pressure failed in the long term.

Useful Takeaways for Future Projects

For future Web3 games, it is important to consider:

1. Balance between gameplay and the economy: tokenomics should enhance the game, not be its core element.
2. Organic player engagement: it is necessary to create mechanics that attract people through artistic design, narrative, and social interactions, not just profitability.
3. Token burning and sinks: mechanisms that actively remove tokens from the system help maintain balance between supply and demand.
4. A progression system: players should see value in developing within the game world, not just in earning tokens.

Mistakes of Major P2E Projects: What Went Wrong?

At first glance, a well-designed in-game economy can attract users through promises of earnings, predictable rewards, and DeFi integration.

In practice, as demonstrated by projects such as Axie Infinity and StepN, an economic model may serve only as a short-term incentive if the gameplay does not create lasting interest.

Axie Infinity

Axie Infinity was one of the first projects to spark massive interest in P2E games in 2021, attracting millions of players. After reaching a peak of 2.7 million DAU, the metrics dropped sharply, and the economy based on the SLP token faced hyperinflation and price declines, leading to a mass player exodus.

Initially, the SLP model had unlimited emission, which exacerbated inflation and primarily attracted “farmers” people playing for income rather than for gameplay. The price collapse negatively affected engagement and the community, demonstrating that even a functioning economy cannot retain an audience if the gameplay is not compelling.

StepN

The StepN app popularized the Move-to-Earn (M2E) format, where users earned tokens for physical activity (walking, running). While the economic mechanics initially drew attention, audience retention and long-term activity proved low, as many participants joined for quick profits rather than genuine interest in long-term app usage.

This is yet another example where reward mechanics work in the short term, but without sustainable gaming content, user return rates remain low.

CryptoBlades

Projects like CryptoBlades demonstrate complex tokenomics, NFT assets, and gameplay mechanics, yet remain heavily dependent on the economic aspect. Players perform actions to receive tokens rather than out of interest in the gameplay or the game world.

CryptoBlades features many elements (NFT characters, an in-game economy), yet critics note that the gameplay is often perceived as a means of generating profit rather than an end in itself.

DeFi Kingdoms

DeFi Kingdoms managed to build an engaging RPG ecosystem with DEX integrations and tokens that users can utilize for both gaming and financial interactions.

Part of the community notes that over time the project has faced challenges: growth in activity, game balance, and long-term player retention remain difficult, as the economy significantly influences engagement rather than the other way around.

Conclusion: A Strong Economy Cannot Replace Interest in the Game

Even the most carefully designed economic models cannot replace high-quality gameplay and an engaged audience. Strong tokenomics may temporarily stimulate interest and keep projects afloat, but without organic player onboarding, real reasons to play, and social interaction, such projects become financial instruments instead of games.

P2E without real players turns into an arbitrage platform for speculators, leading to rapid audience burnout, declining token prices, and reduced activity. For Web3 games to become sustainable, they must combine a strong gaming experience with a sound economy where tokenomics enhances the enjoyment of the game rather than replacing it.