Play2Airdrop Explained: Monetizing the Metaverse

What is Play2Airdrop (P2A)?

Play2Airdrop (P2A) is the twist on the classic Decentralized Finance (DeFi) airdrop. You collect points through game quests rather than the classic on-chain actions on the blockchain. Game studios will divide and send out tokens to specific players based on the most points collected.

The term “P2A” itself however is a marketing jargon to gain attention. People will try to use this term for clickbait even though their campaign is something else entirely. It is never meant to be a long-term method of distribution of tokens, the same way it is for classic DeFi airdrops. It is a campaign with a specific timeframe that is NEVER meant to be sustainable.

Loopify in his article (How To Make Your First $25K In Crypto) gave another good marketing jargon for P2A. calling it "Point Farming" & “Game Farming”. The simple way to understand how to farm points is to understand what user activity the developers want. You can divide the activities into:

• Onchain Farming: Activities on the Blockchain i.e. buying of Non-Fungible Tokens (NFT) or tokens. The main goal is to test the smart contracts created by the developers.
• Social Farming: Activities in Social Media i.e. Twitter (X), TikTok, YouTube, etc.. The main goal is to get the word out about the game. Users are the marketers for the game itself.
• Game Farming: Activities in-game i.e. completing quests or ranking at the top of the leaderboards. The main goal is to test the main core loop of the game to determine the interest in the game. Developers will also use this to analyze how cheaters try to game the system. There are now monetary incentives to play which would attract would-be cheaters.

Stages of P2A campaigns

Multiple P2A campaigns have launched in the 1st quarter of 2024. All with different allocation sizes and unlock dates. 0xKepler wrote a good article (Improving Point Airdrops) on point airdrops. He discusses the analysis of the point farming mechanics.

Due to the stark differences between campaigns, I’m gonna simplify it into 3 stages:

1. Token generation event (TGE) stage

This is at the point that the token has yet to be released into the market.

• The source of funds for the airdrop is usually the money raised from Venture Capitalists (VC)
• There is no price discovery yet.
• A large volume of users are attracted to join as there’s speculation on the price of the token once released.
• Due to the large influx of users due to speculation, game studios will be using this stage as an open playtest session. This is to stress test servers and identify cheating behaviors.

A successful campaign for the TGE stage was Pixels in Jan’24. Expect a lot more P2A campaigns at this stage soon as a lot of web3 games are getting ready to launch.

2. Seasonal campaign stages

This is at the stage that tokens have been released to the market.

• The source of funds for the airdrop is usually STILL the money raised from VCs.
• Games keep an allocated amount in their treasury. This is to be used as a prize for players who finish top on the leaderboard. It can also be points for social activities for non-competitive games.
• Players will be able to determine how much the payout is and decide accordingly whether to take part.

Deviant’s Faction is currently doing a seasonal campaign like this. Payouts each season are monthly for 5 months.

Be CAUTIOUS about this stage of the P2A campaign

• seasonal rewards are based on the game studio’s tokens allocated specifically for the campaign. This will eventually dry up.
• Game studios can buy back the tokens from the market to extend the seasonal rewards. But expect token prices to continue to drop if tokens don’t have enough use cases for users to buy & spend.
• If token distribution is suddenly gated behind NFT/ token purchases, this means that users’ money is being used to buy back the tokens. Then the tokenomics would have shifted back to the Play2Earn type of games. Be EXTREMELY CAUTIOUS if this happens. The game studio may still use the P2A marketing jargon even though the tokenomics has shifted to P2E. Vader has a good write-up on the nature of P2E and why it crashes.

3. Full-released game stage

This is at the stage when the game is already established in the market with an active player presence in-game. This type of campaign is the next evolution from digital marketing.

• The source of funds is the marketing expenses paid by the businesses to conduct this marketing campaign. The game studio’s established token would be used as a payout to the players.
• Rather than paying marketing agencies, Businesses go directly to consumers. We are targeting the newer generation of users that spend a lot of time in games/metaverses i.e. Fortnite/ Roblox. Consumers are paid the marketing expenses incurred by Businesses. The idea is to get the most consumers to try out your game experience. Airdrops are provided as an incentive for players to interact with the game. In the same way marketing funnels work, the expectation is that the game experience will help with brand awareness for that specific business. Thus no longer the need to use digital marketing agencies to market your games.
• Businesses would need the expertise of the game studios. This is to develop the experience/server/land to promote their business in the game. Expect jobs to be created around this i.e. metaverse builders, etc.
• To find the specific games to conduct the P2A campaign, Businesses would rely on 3rd party data analytics companies. They would need 3rd party verification for Daily Active User (DAU) statistics. Highly unlikely for them to trust numbers provided by the game studios. Expect teams like Gam3s.gg, ggQuest, and Earn Alliance that track game achievements to be relied upon. (Disclaimer: I’m not implying that these teams are providing that specific service for this, but they could be used for it. It could also be that once Steam allows web3 games, businesses will go to Steam for verification of the game’s DAU statistics).

There are currently no games doing P2A campaigns at this stage. Expect these campaigns in a more distant future once most games have launched their tokens. I can confirm that Web3/Metaverse companies have begun throwing this idea out to traditional businesses.

I had the opportunity to join an event presented by The Sandbox. It was a presentation marketed towards banks and corporations. They addressed that the market fluctuates. The hype cycle for the metaverse has ended. Now real tech for Metaverse is being built.

Compared to years ago physical marketing is 95% of the expense of a company. Now 95% is digital marketing. In the future, 95% will be metaverse marketing. The presentation focuses on creating a narrative of fear of missing out (FOMO) to early adopt this tech to be ahead of the game. It’s not an asset, but a marketing expense. Businesses need to get skills to develop metaverse marketing earlier compared to competitors.

An example of how this stage of the campaign will look like is the Sandbox alpha seasons back in 2021/2022. But, that previous campaign was with businesses & celebrities that are already in the web3 space. It was more focused on promoting the Sandbox as a new game/metaverse. Instead of focusing on promoting these specific businesses.

When to cash out?

(Information shared here is for educational purposes only and is not meant as financial advice)

Now that you’ve joined the P2A campaigns, the tokens have been airdropped to your wallet. If you don't intend to use the tokens in-game, the only answer is IMMEDIATELY.

P2A is not meant to be sustainable. The money either comes from VCs or external businesses looking to do marketing campaigns. Whatever amount is provided by them is the fair market price of the marketing expense paid for distribution.

The P2A idea is to get the most consumers to try out your game. Airdrops act as an incentive for players to interact with your game. Players to cash out the marketing expenses paid by the company. So the intrinsic value of the token would be much lower than the initial price of the tokens.

The token price is expected to always DROP right after payment. Players naturally will collect the marketing expense as a reward for playing. Token prices would only increase in the future once the intrinsic value increases or speculations for future rewards. If you’re not cashing out immediately, you are already participating in speculation. You are no longer participating in a P2A campaign but performing trading or investment activities.

Who to Follow?

There are currently different interpretations of what P2A campaigns are. But as long as games are related to the campaigns, you're already heading in the right direction. Here are the people or communities I suggest you follow for updates on P2A campaigns.

Gaming Chronicles: There's a list of P2A campaigns that 0xRaiden maintains. Join the Gaming Chronicles Discord for access.

Tribally: The Tribally team maintains a list of P2A events on their website. You'll need to log in to obtain access

Unlucky: Inhuman maintains his list in his Unlucky Discord channel.

Last but not least, follow me on X (Twitter) if you want P2A campaign updates directly on X (@annazplays)!