TL;DR

• People will continuously spend more time on the internet, along with disposable income, increased in more showing-off done online.
• Everything can be monetised in the future, all work done can be rewarded or punished, X to Earn will be a source of income for many people, gig economy will be the trend.
• There will be 3 types of X to Earn in the future: Self-Improvement, Daily Life, and Entertainment.
• Self-Improvement type X to Earn will be more popular, cause the nature of humans doesn’t change.
• Daily Life type X to Earn will face challenges in designing rewards, high frequency of utility, and low frequency of reward. Different from traditional X to Earn.
• In short to mid term, if a GameFi went popular because of its gameplay and entertaining elements, it won’t have high earnings, vice versa.

This is an article translated from my original Chinese article *The New World Has Come, But Are We Ready Yet? Chapter 2: The Future of X to Earn.
*Link is below.

Stake to Earn, Hunt Airdrop to Earn, Play to Earn, and Move to Earn are derivatives from blockchain and tokenisation, and in fact, “X” can be replaced with any verb.

Evolution in means of production leads to an increase in productive efficiency, when more workforce is replaced by machines and AI, the need for working hours for non-complex jobs will significantly decrease in the future. Like how GameFi went so popular in 2021, and people say it’s because of the pandemic and lockdown in South East Asia, people get a higher income than their regular job, by staying at home and playing Axie, that’s why Axie went trending and the heat of GameFi was spread around the world. The core here is “Earn”, not “X”, X is only a type of PoW mechanism, people spend time, physical/mental energy, etc. to do work, and get rewarded for it.

Breakthrough in software and hardware, more companies are adapting to remote working, results to drop in the cost of living, leads to a decrease in demand for physical goods in real life, and people are now spending increasingly more time online. Reduced in-person contact, means I won’t see the new Lamborghini you just bought, and you won’t see the new LV I just bought, more disposable income will be spent online and in Web3, people switched from flexing offline to online.

Leaps in technology lead to leaps in society, everything can be monetised in the future. Let’s not limit our imagination, by aggregating the technology of multi-chain, cross-chain, VR, AR, etc. we could possibly see a worldwide X to Earn happening someday, and the term “X to Earn” is likely to be rephrased to another term like gig economy.

There will be different varieties of tasks and events for users to participate, the activities people do on daily basis can be quantified and rewarded or punished. Tokenisation will be blended into our life, gaming, dog walking, social, creation, even tree planting etc. can all get rewarded or punished in various degrees, does it sounds like a scene that can only be seen in Black Mirror? Now the question is, when these changes happen, will you embrace the changes that the new world brings, or will you be forced to accept them only when they become mainstream?

There will be 3 types of narratives for the future X to Earn:

• X = Self-Improvement
• X = Daily Life
• X = Entertainment

X = Self-Improvement

One sentence to sum up this type of X to Earn: use raga, dvesha, and moha, to beat raga, dvesha, and moha.

Note: Raga, dvesha, and moha are called three poisons which is similar to the seven deadly sins in Christian teachings.

These are the nature of a human, and they can’t be changed.

The most representative one currently would be STEPN for Move to Earn, the characteristics for this type of X to Earn is: your “mining” activities are the activities that you wanted to do and you supposed to do, but because of laziness and not having enough inventive, you don’t have the power of will to do so. And these “mining” activities can bring you actual benefits in the long term, not only on the financial aspect.

Many people try to explain the whole STEPN move to earn mechanism as it was a gym membership, how you bet against the gym, but in fact, we are looking at two different things here.

What you are buying for the gym membership is a product and service in a subscription form, that’s all. After the subscription period, you will have no relation with the gym anymore, and the gym itself does not provide you with any incentives other than why you are paying for the gym. With the “bet-on theory” people are saying gyms make money when you don’t show up in the gym cause of occupation of the gym’s resources and vice versa, which is not entirely correct, this is not the business model for gyms. The core model for the gym is you pay for things that you don’t need, like a whole year of membership which you only show up for a few times.

What you are buying for the Move to Earn NFT is an asset that incentivises you. Or you can say you bought a derivative (NFT) from the project, and the project supervises you on your work, when you have done enough work, then the project will give your money back, like a bond. So you never betting against the gym or project, you are betting against yourself, betting on if you can keep doing the work that you were too lazy to do until you make your money back. This is why this type of X to Earn is so fascinating, you are not only getting short-term financial incentives but long-term benefits and values for yourself.

99.9% of the users went for money at the beginning, but gradually experienced self-improvement and discover new stuff in the middle of the money-chasing process. In the new world, the physical type of X to Earn, like running, riding, training, etc., will be more popular than the mental type of X to Earn, because you can really feel the change of your body in short to mid term, thus, can accumulate more true believer easily and fast. On the other hand, the mental type of self-improvement X to Earn will take a long period of time to see the effect, and users can’t feel the improvement as intuitive as the physical type.

Regardless of study, fitness, yoga, etc. we are going to see the born of a few more killer apps for this self-improvement type of X to Earn in the future.

X = Daily Life

This type of X to Earn focuses on activities and works that people used to do on Web2, like creating content, providing service, chatting and meeting people, they may be categorised into SocialFi, and the form of the product is more likely to be a protocol rather than an application.

SocialFi, as the name implies, is still related to finance, and token use cases are required. Take Cyberconnect and Project Galaxy as examples, one focuses on social graph while another focuses on data interoperability, their tokens do not have any actual use cases at the moment (one hasn’t ICO yet). If you were to say DAO or governance, then there is no difference than a company shares. Shares and stocks can be both used for speculation and vote/governance, one key element distinct between the two is people don’t buy shares to vote, but people buy tokens because of its utilities.

SocialFi will not come out as many imagined, because it’s a “Social”Fi, so it won’t or can’t have X to Earn like the traditional GameFi. A big challenge for the Daily Life X to Earn is the quantification of work done and the design of the reward & punishment system. A low-frequency reward system may work better on this type of X to Earn, cause it may be high-frequency activities, it can’t be like Play to Earn where you get rewards instantly after a battle, or Move to Earn you get your earning instantly after you walked for 10 mins, or else even with earning cap, the model can still collapse easily with guild or workshop.

If the project is to create incentives for activities that already exist in Web2, such as content creation (even just a simple Tweet), view, comment, etc., it should be done without the user’s awareness of the incentives. It will be a different tokenomic than the traditional X to Earn, more genuine use of the product is needed from users, when users have done a certain amount of work or reached a certain achievement, they will be rewarded with tokens or NFT, which could be Write to Earn, Sing to Earn, Talk to Earn. Giving incentives to encourage users to be active is needed at different phases of the product life cycle.

X = Entertainment

We are finally here! GameFi will be the main focus of the entertainment type of X to Earn.

It’s a good way to attract new users with a pump in token prices, and new users carrying new funds into the projects lead to an increase in token prices, this is a critical phase when the product is in its growth stage. This brought us back to the core of growth, traffic. Whether we are in Web1,2,3,4,5, traffic is always the core of growth for all internet products, social media, eCommerce, and games; traffic is always at the top of the conversion funnel.

Gaming is already a mature industry on PC and mobile, they all have sophisticated MOBA, MMORPG, and FPS games, not to mention gaming consoles like PlayStation, Xbox and Switch. It's undeniable that the progress of technology in AR and VR, will replace many traditional games in the future, but does not mean we need to have super entertaining and great gameplay GameFi in the current phase, to replace the traditional ones.

Unless a GameFi project can be as good as League of Legends, or Fortnite, players are willing to purchase skin to flex, or just simply like how they look, which these companies get billions of dollars in revenue each year. And now the question is, if the GameFi project team can create a game as good, why would they launch tokens and NFTs, why is it necessary to have the financial attribute on gaming assets, and why would they be so nice to share their revenue to all players.

In X to Earn for GameFi, X is “Gameplay”, Earn is “Earning”. Gameplay and Earnings can’t be obtained at the same time, you can’t have your cake and eat it too, not absolute, but will be unproportional in most cases.

If a GameFi went popular because of its gameplay, it won’t have high earnings, vice versa.

Here is why, if the GameFi went popular because of its gameplay, then users come for its gameplay, and now the team will be competing with traditional gaming developers which have developed for decades. And what made some of the great games survived in this highly competitive industry? Gameplay.

If the GameFi went popular because of its earnings, it’s predestined to have relatively less gameplay. The impact of crazy high APY results in users will not appreciate the gameplay seriously enough, most users are heading to maximising the highest APY. And project team will focus on tokenomic and economic model to prevent from death spiral, the purpose of whatever “gameplay” or features that the team update is to stabilising the model and growth, instead of real gameplay.

We will see many GameFi projects exist on a different point of the line graph shown below (figure 1.0), only the yellow point of high earnings GameFi will survive in short to mid term. The red point fun-to-play GameFi that focuses on gameplay like AAA games, they are almost identical to traditional games except your skin can be traded as NFT, is going to compete with the traditional gaming industry. However, looking forward to seeing the born of blue equilibrium point GameFi in the not too distant future, where playing GameFi can be an actual job to do for a living.

Last

Above opinions and statements are personal, there is no paradigm for anything at the moment, if there is, means that it’s past tense, all stakeholders should keep embracing the new world, not be limited by any given model and existence.

Nothing is impossible, everything is waiting to be discovered, isn’t this the beauty of the dangerous yet attractive new world?

- To all dreamers and lonely builders in the bear market out there