The early days of Web3 gaming were messy. Extreme inflation and token devaluation saw people’s hopes and dreams of making a healthy living through Play-to-Earn (P2E) games quickly and sadly dashed. Fortunately, we’ve come a long way since, with AAA Web3 gaming titles, heaps of industry innovation, and engaged communities around the world keen to see what the next P2E release has to offer.

Understanding the P2E space requires a nuanced understanding of gamer motivations and behaviors, while also considering the bigger picture, such as navigating regulations, appealing to emerging international gaming markets, and having a good gauge of tokenomic sustainability. Joining us to share such knowledge is Victor Yu, Co-Founder of CARV, a popular modular data layer for gaming and AI.

Earlier this year, CARV raised $10m (Series A) to create a superior way for gamers to monetize their data, connect Web2 identities to Web3 tokens, and access their credentials, as well as developing a personalized gaming assistant that integrates with Web3 wallets.

Beyond the financial incentives, what do you think are the other key factors driving the growing popularity of play-to-earn (P2E) games in emerging markets?

VY: Gaming at its core is about fun with friends. So, beyond the financial aspect of P2E, there’s an enticing invitation to collaborate and interact. Players need to think strategically, solve problems, and work together, elevating the experience beyond a simple money making exercise.

It’s also worth noting that gaming is a great creative outlet, allowing players to express themselves through customization and storytelling. This creative aspect, combined with the social elements and skill development, enhances overall satisfaction and engagement in the digital economy.

Play-to-earn (P2E) games introduce a new way for players to interact with blockchain technology. How are these games helping users in emerging markets become more familiar with the broader concepts of Web3 and cryptocurrency?

VY: People learn by doing and blockchain is no exception. Through hands-on experience, players earn and manage digital assets, gaining exposure to essential concepts like wallets, tokens, and transactions. Moreover, the community-driven nature of these games encourages knowledge sharing among players, where they exchange tips and strategies, thereby promoting understanding of Web3 technologies and investment practices.

The gamified approach helps demystify complex blockchain concepts. Particularly in emerging markets, P2E games often serve as an accessible entry point to blockchain technology, increasing tech literacy in a fun, interactive way. As a result, players become familiar with the sector’s fundamental concepts and can engage with them immediately.

What are some of the key barriers to entry for users in these regions who want to participate in P2E ecosystems? How can the industry address these challenges to make the games more accessible?

VY: This is a great question and one we as an industry are still trying to tackle. Of course, there are several roadblocks in emerging markets, from limited internet access to the availability of suitable devices and technical literacy (despite the lower entry requirements of P2E games). It’s also worth remembering that low-income areas and fluctuating local currencies can further deter potential users from investing in P2E experiences and becoming successful players.

Nonetheless, these are challenges we are collectively and individually trying to spearhead. We believe the vast majority of these problems are solvable, with a keen focus on infrastructure development and partnering with local providers to enhance internet access and mobile device availability. For instance, some companies are developing lite versions of their games that can run on lower-end devices. On the education front, we must also work on simplifying the onboarding process and creating engaging, localized content to explain blockchain basics.

The goal is to make P2E gaming as accessible as possible, opening up opportunities for players regardless of their location or background. It’s a complex challenge but one that could significantly impact digital inclusion and market growth going forward.

Many P2E games face criticism for unsustainable tokenomics—where the in-game tokens rapidly lose value due to inflation or poor economic design. What steps do you think the industry needs to take to create more sustainable, long-term economic models for P2E games?

VY: This criticism is understandable because devaluation in any economy isn’t conducive to long-term growth or satisfied participants. Unsustainable tokenomics disincentivizes players and leads to further ecosystem problems. Put simply, we need all projects to plan better for the future, because this isn’t about the success or failure of one project but the reputation and longevity of us all.

To establish more sustainable, long-term economic structures, developers must design balanced tokenomics that encourage a healthy supply and demand relationship. Additionally, implementing incentive structures that reward long-term engagement — such as staking mechanisms or loyalty programs — can help stabilize token values. Finally, regular adjustments to the economic models based on real-world performance and user feedback can further ensure that they remain responsive to the evolving needs of players.

The aim of the game here is to both avoid excessive inflation and ensure that dedicated players earn their just (and valuable) rewards, which in turn produces healthier economies and engagement across the board.

Regulatory environments vary widely across emerging markets, with some being more open to blockchain and crypto than others. How does CARV navigate these differences, and what strategies do you use to adapt to the specific regulatory frameworks in different regions?

VY: We do our best to keep our finger on the regulatory pulse wherever we operate. It’s no mean feat with blockchain and crypto rules varying widely from place to place, but effectively navigating this regulatory landscape is essential for companies like us.

Our approach is multifaceted. First, we collaborate with local experts and organizations to understand these diverse environments and adapt strategies accordingly. Likewise, a strong focus on compliance is crucial, ensuring that CARV’s operations align with local laws — such as data protection and financial regulations — and thereby building trust with users and regulators. Additionally, proactive engagement with regulatory bodies can help advocate for favorable conditions for blockchain innovation, emphasizing the positive impact of P2E gaming on financial inclusion.

Ultimately, our strategy is about flexibility and continuous learning. The regulatory landscape in these markets is evolving rapidly, and we're committed to moving with it, always with an eye on compliance and user protection.

CARV focuses on identity and reputation in Web3 gaming. How does CARV’s platform fit into the P2E ecosystem, particularly in these emerging markets where gaming can be a primary source of income?

VY: Knowing who’s who and showing gaming achievements isn’t just about bragging rights in P2E — it’s about building trust. This is especially crucial in emerging markets where gaming can be much more than a hobby. That’s why at CARV, we put identity and reputation management front and center.

We believe that a player’s digital identity should be as unique and valuable as their real-world one. Therefore, we keenly focus on identity and reputation management. By ensuring secure identity, for example, CARV protects users from fraud, allowing them to engage confidently in P2E games. The platform’s reputation systems further enhance accountability, enabling players to interact safely within the community while mitigating risks associated with dishonest behavior.

Additionally, CARV empowers users by granting them control over their digital identities and assets, which is especially important in regions with limited access to traditional financial systems. This sense of ownership not only enriches the gaming experience but also fosters financial independence and literacy.

Through educational resources and support for developers, CARV helps simplify the onboarding process and stimulate innovation in the local gaming economy, ultimately creating a more inclusive and sustainable environment for players.

As we look to the future, CARV remains committed to fostering a more inclusive, secure, and rewarding P2E ecosystem, one where players in emerging markets can truly take part and build their digital legacies.