Description

These tokens serve as in-game currencies, items, or governance shares for blockchain-based games and metaverse worlds. Players use them to buy assets, upgrade characters, or vote on game developments.

Risks

Hit-driven nature. The gaming industry is hit-driven. A game can be incredibly popular for a few months and then be abandoned by players for the next trend. The value of gaming tokens is tied 100% to the active player base. If players leave, the economy collapses.

Inflationary 'Play-to-Earn' mechanics. Many blockchain games issue tokens as rewards to players. This creates constant selling pressure. Unless there is a constant stream of new players buying the token to enter the game, the economy becomes unsustainable. This often results in a boom-and-bust cycle.