Market Making and Speculative Trading Feasibility in Play-to-Earn Crypto Games

Abstract

As memes get sold for millions of dollar NFTs and governments seek to gain tighter control over decentralized finance platforms, we are witnessing a race between new and increasingly fantastic ways to make money and regulation from governments. Play-to-earn cryptocurrency games are another step in the cycle, with players trading NFT tokens and participating in gameplay for cryptocurrency, often a game’s unique cryptocurrency that can then be sold on external exchanges for more popular coins, such as Bitcoin or Ethereum. More and more, these games are becoming a way to supplement or replace incomes in third world countries, yet there is a significant lack of research regarding the stability and sustainability of these games. Furthermore, interest and hype over NFT products and play-to-earn crypto games has persisted but with little academic analysis on the underlying markets. In this paper, we seek to analyze NFT marketplaces in play-to-earn crypto games by proposing in-game trading strategies.