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What Are NFT Games and How Do They Work?
Key Takeaways
NFT games use non-fungible tokens as in-game assets, allowing players to verifiably own, trade, and interact with items recorded on a blockchain.
Smart contracts govern the rules for creating, owning, and transferring in-game NFTs, removing the need for a central game server to manage item ownership.
As with any crypto activity, NFT gaming carries both financial and security risks, and it is important to understand the rules of any game before participating.
NFT games combine blockchain technology with interactive gameplay, turning in-game items into digital assets that players can truly own. Unlike traditional video games, where items are locked within a closed game environment controlled by the publisher, NFT games allow players to hold, trade, or sell their in-game assets outside the game itself.ย
The broader space is often referred to as GameFi, a term that reflects the intersection of gaming and decentralized finance. It covers not only NFT-based items but also the token economies and reward structures that many blockchain games incorporate.
What Is an NFT?
A non-fungible token (NFT) is a unique digital asset recorded on a blockchain. Unlike cryptocurrencies such as Bitcoin or Ether, each NFT has distinct properties and cannot be exchanged on a like-for-like basis with another token. You can trade 1 BTC for another 1 BTC and end up with an identical asset. With NFTs, this is not possible because each token carries its own unique metadata. In gaming, this uniqueness makes NFTs well suited to represent characters, items, cards, skins, and other collectibles that vary in rarity or properties. For a broader overview of NFT types and use cases, see our guide to NFT categories.
How NFT Games Work
NFT games implement blockchain-based assets through smart contracts, which are self-executing programs stored on a blockchain that define the rules for creating, owning, and transferring in-game NFTs. When a player earns or purchases an in-game item represented as an NFT, ownership of that item is recorded on the blockchain rather than only in the game's internal database.
This means players can potentially transfer their NFTs to external wallets, trade them on NFT marketplaces, or use them in other compatible platforms. The specific rules around what you can do with in-game NFTs vary significantly between games, and are defined by each game's smart contracts. CryptoKitties, one of the earliest NFT games, used a smart contract called the geneScience contract to determine the traits of new cats through randomized mechanics. Players could analyze the odds of specific traits and make decisions based on rarity, introducing early concepts of on-chain game economies.
Types of NFT Game Models
NFT games span several different approaches to gameplay and economic participation. Understanding the distinctions between them helps set realistic expectations about how each model works.
Play-and-earn games
In play-and-earn games, players can earn in-game tokens or NFTs through gameplay activities such as completing missions, winning battles, or reaching progression milestones. These tokens may be usable within the game's own economy or exchangeable on external markets, though their value depends on demand from other participants and is subject to market fluctuation.
Earlier versions of this model, widely known as play-to-earn (P2E), gained significant attention around 2021 with games like Axie Infinity. However, many first-generation P2E games faced sustainability challenges as their token economies became difficult to balance over time, particularly when new player growth slowed. More recent games have evolved toward play-and-earn structures that place greater emphasis on gameplay quality alongside economic participation.
In-game NFT collectibles
Some NFT games focus primarily on the ownership and collectibility of in-game assets rather than token earning. Players acquire NFTs representing characters, cards, or items that hold value based on their rarity, cosmetic appeal, or utility within the game. Gods Unchained, a tradeable card game running on Immutable X, is a current example of this model. Players own their cards as NFTs and can trade them freely outside the game, with card values determined by their playability and scarcity.
Tap-to-earn and casual games
A more recent category, particularly prominent on mobile platforms and messaging apps, uses simplified mechanics where players can earn tokens through basic in-game interactions. These games typically have lower barriers to entry and have reached large audiences. In 2024, several tap-to-earn games on mobile and messaging platforms attracted tens of millions of participants, expanding the reach of blockchain gaming well beyond traditional crypto audiences. As with other NFT game models, the long-term sustainability of their token economies varies by project.
What Blockchains Do NFT Games Use?
NFT games are no longer concentrated on a single blockchain. The ecosystem has expanded significantly, with gaming-specific networks and Layer 2 solutions now widely used to reduce transaction costs and improve the player experience:
Ethereum: the most established NFT gaming blockchain, using ERC-721 and ERC-1155 as the primary token standards for gaming assets.
BNB Chain: uses BEP-721 and BEP-1155 standards and supports a range of blockchain gaming applications.
Ronin: a gaming-focused blockchain originally developed for Axie Infinity, now home to a growing ecosystem of games including Pixels.
Immutable X and Immutable zkEVM: Layer 2 solutions designed specifically for gaming, offering gas-free NFT transactions and supporting titles such as Gods Unchained and Illuvium.
Other Layer 2 networks and appchains: many newer game studios deploy on dedicated appchains or general-purpose Layer 2 networks to manage transaction costs and maintain tighter control over in-game economies.
Can You Lose Money or NFTs in NFT Games?
It is possible to incur financial losses while participating in NFT games. The value of in-game tokens and NFTs depends on market demand, which can change significantly over time. Declining player numbers, changes to game mechanics, or broader crypto market conditions can all affect the value of assets held within a game. As with any crypto activity, only participate with amounts you are comfortable with potentially losing.
Beyond market risk, it is also possible to lose access to NFTs in specific circumstances:
Transferring an NFT to a wallet that does not support its token standard can make it inaccessible.
Scammers may attempt to trick you into sending NFTs to fraudulent addresses or into approving malicious smart contracts that can drain your wallet.
Some games include mechanics where NFTs can be spent, consumed, or permanently lost as part of normal gameplay rules.
The ERC-721 and ERC-1155 standards are the most widely used for Ethereum-based gaming NFTs, while BEP-721 and BEP-1155 apply on BNB Chain. Always confirm which standards your wallet and the destination platform support before transferring assets.
Tips for Participating Safely in NFT Games
Verify the token standards supported by your wallet before transferring NFTs between platforms.
Only interact with smart contracts from projects you have independently verified as legitimate through their official channels.
Be cautious of unsolicited offers, airdropped NFTs of unknown origin, and requests to connect your wallet to unfamiliar sites.
Read the rules of any NFT game carefully before making purchases, particularly around consumable or losable in-game items.
Consider using a separate wallet for active gaming that holds only what you need for in-game activity, keeping higher-value NFTs in a more secure storage wallet.
Back up your recovery phrase and store it securely offline. Losing access to your wallet means losing access to any NFTs held within it.
What Is the Most Popular NFT Game?
Popularity in NFT gaming shifts over time. Games that have maintained significant player bases include Axie Infinity, Gods Unchained, Sorare, Pixels, and Illuvium, among others. New titles regularly emerge across different blockchain networks. Data platforms that track on-chain activity and active wallets provide more current snapshots of which games are seeing the most engagement.
NFT Games vs. Traditional Games
In traditional video games, in-game items are owned by the game publisher and tied to a player's account within the publisher's system. In NFT games, items represented as NFTs are recorded on a blockchain and can be transferred, traded, or sold independently of the game. Players have verifiable on-chain ownership of those assets, though the practical value of that ownership still depends on the game remaining operational and the market for those assets remaining active.
Closing Thoughts
NFT games integrate blockchain technology with gameplay, allowing players to own and trade in-game assets as NFTs. The ecosystem includes multiple game models, token standards, and blockchains, each with varying mechanics and risks. Players should carefully understand the rules and potential financial implications before participating.
Further Reading
What Is GameFi and How Does It Work?
What Is Play-to-Earn and How to Cash Out
What Are Smart Contracts?
A Comprehensive Guide to NFT Categories
What Are NFT Mystery Boxes and How Do They Work?
Disclaimer: This content is presented to you on an โas isโ basis for general information and or educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the content is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. For more information, see our Terms of Use, Risk Warning and Binance Academy Terms.
NFT games use non-fungible tokens as in-game assets, allowing players to verifiably own, trade, and interact with items recorded on a blockchain.
Smart contracts govern the rules for creating, owning, and transferring in-game NFTs, removing the need for a central game server to manage item ownership.
As with any crypto activity, NFT gaming carries both financial and security risks, and it is important to understand the rules of any game before participating.
NFT games combine blockchain technology with interactive gameplay, turning in-game items into digital assets that players can truly own. Unlike traditional video games, where items are locked within a closed game environment controlled by the publisher, NFT games allow players to hold, trade, or sell their in-game assets outside the game itself.ย
The broader space is often referred to as GameFi, a term that reflects the intersection of gaming and decentralized finance. It covers not only NFT-based items but also the token economies and reward structures that many blockchain games incorporate.
What Is an NFT?
A non-fungible token (NFT) is a unique digital asset recorded on a blockchain. Unlike cryptocurrencies such as Bitcoin or Ether, each NFT has distinct properties and cannot be exchanged on a like-for-like basis with another token. You can trade 1 BTC for another 1 BTC and end up with an identical asset. With NFTs, this is not possible because each token carries its own unique metadata. In gaming, this uniqueness makes NFTs well suited to represent characters, items, cards, skins, and other collectibles that vary in rarity or properties. For a broader overview of NFT types and use cases, see our guide to NFT categories.
How NFT Games Work
NFT games implement blockchain-based assets through smart contracts, which are self-executing programs stored on a blockchain that define the rules for creating, owning, and transferring in-game NFTs. When a player earns or purchases an in-game item represented as an NFT, ownership of that item is recorded on the blockchain rather than only in the game's internal database.
This means players can potentially transfer their NFTs to external wallets, trade them on NFT marketplaces, or use them in other compatible platforms. The specific rules around what you can do with in-game NFTs vary significantly between games, and are defined by each game's smart contracts. CryptoKitties, one of the earliest NFT games, used a smart contract called the geneScience contract to determine the traits of new cats through randomized mechanics. Players could analyze the odds of specific traits and make decisions based on rarity, introducing early concepts of on-chain game economies.
Types of NFT Game Models
NFT games span several different approaches to gameplay and economic participation. Understanding the distinctions between them helps set realistic expectations about how each model works.
Play-and-earn games
In play-and-earn games, players can earn in-game tokens or NFTs through gameplay activities such as completing missions, winning battles, or reaching progression milestones. These tokens may be usable within the game's own economy or exchangeable on external markets, though their value depends on demand from other participants and is subject to market fluctuation.
Earlier versions of this model, widely known as play-to-earn (P2E), gained significant attention around 2021 with games like Axie Infinity. However, many first-generation P2E games faced sustainability challenges as their token economies became difficult to balance over time, particularly when new player growth slowed. More recent games have evolved toward play-and-earn structures that place greater emphasis on gameplay quality alongside economic participation.
In-game NFT collectibles
Some NFT games focus primarily on the ownership and collectibility of in-game assets rather than token earning. Players acquire NFTs representing characters, cards, or items that hold value based on their rarity, cosmetic appeal, or utility within the game. Gods Unchained, a tradeable card game running on Immutable X, is a current example of this model. Players own their cards as NFTs and can trade them freely outside the game, with card values determined by their playability and scarcity.
Tap-to-earn and casual games
A more recent category, particularly prominent on mobile platforms and messaging apps, uses simplified mechanics where players can earn tokens through basic in-game interactions. These games typically have lower barriers to entry and have reached large audiences. In 2024, several tap-to-earn games on mobile and messaging platforms attracted tens of millions of participants, expanding the reach of blockchain gaming well beyond traditional crypto audiences. As with other NFT game models, the long-term sustainability of their token economies varies by project.
What Blockchains Do NFT Games Use?
NFT games are no longer concentrated on a single blockchain. The ecosystem has expanded significantly, with gaming-specific networks and Layer 2 solutions now widely used to reduce transaction costs and improve the player experience:
Ethereum: the most established NFT gaming blockchain, using ERC-721 and ERC-1155 as the primary token standards for gaming assets.
BNB Chain: uses BEP-721 and BEP-1155 standards and supports a range of blockchain gaming applications.
Ronin: a gaming-focused blockchain originally developed for Axie Infinity, now home to a growing ecosystem of games including Pixels.
Immutable X and Immutable zkEVM: Layer 2 solutions designed specifically for gaming, offering gas-free NFT transactions and supporting titles such as Gods Unchained and Illuvium.
Other Layer 2 networks and appchains: many newer game studios deploy on dedicated appchains or general-purpose Layer 2 networks to manage transaction costs and maintain tighter control over in-game economies.
Can You Lose Money or NFTs in NFT Games?
It is possible to incur financial losses while participating in NFT games. The value of in-game tokens and NFTs depends on market demand, which can change significantly over time. Declining player numbers, changes to game mechanics, or broader crypto market conditions can all affect the value of assets held within a game. As with any crypto activity, only participate with amounts you are comfortable with potentially losing.
Beyond market risk, it is also possible to lose access to NFTs in specific circumstances:
Transferring an NFT to a wallet that does not support its token standard can make it inaccessible.
Scammers may attempt to trick you into sending NFTs to fraudulent addresses or into approving malicious smart contracts that can drain your wallet.
Some games include mechanics where NFTs can be spent, consumed, or permanently lost as part of normal gameplay rules.
The ERC-721 and ERC-1155 standards are the most widely used for Ethereum-based gaming NFTs, while BEP-721 and BEP-1155 apply on BNB Chain. Always confirm which standards your wallet and the destination platform support before transferring assets.
Tips for Participating Safely in NFT Games
Verify the token standards supported by your wallet before transferring NFTs between platforms.
Only interact with smart contracts from projects you have independently verified as legitimate through their official channels.
Be cautious of unsolicited offers, airdropped NFTs of unknown origin, and requests to connect your wallet to unfamiliar sites.
Read the rules of any NFT game carefully before making purchases, particularly around consumable or losable in-game items.
Consider using a separate wallet for active gaming that holds only what you need for in-game activity, keeping higher-value NFTs in a more secure storage wallet.
Back up your recovery phrase and store it securely offline. Losing access to your wallet means losing access to any NFTs held within it.
What Is the Most Popular NFT Game?
Popularity in NFT gaming shifts over time. Games that have maintained significant player bases include Axie Infinity, Gods Unchained, Sorare, Pixels, and Illuvium, among others. New titles regularly emerge across different blockchain networks. Data platforms that track on-chain activity and active wallets provide more current snapshots of which games are seeing the most engagement.
NFT Games vs. Traditional Games
In traditional video games, in-game items are owned by the game publisher and tied to a player's account within the publisher's system. In NFT games, items represented as NFTs are recorded on a blockchain and can be transferred, traded, or sold independently of the game. Players have verifiable on-chain ownership of those assets, though the practical value of that ownership still depends on the game remaining operational and the market for those assets remaining active.
Closing Thoughts
NFT games integrate blockchain technology with gameplay, allowing players to own and trade in-game assets as NFTs. The ecosystem includes multiple game models, token standards, and blockchains, each with varying mechanics and risks. Players should carefully understand the rules and potential financial implications before participating.
Further Reading
What Is GameFi and How Does It Work?
What Is Play-to-Earn and How to Cash Out
What Are Smart Contracts?
A Comprehensive Guide to NFT Categories
What Are NFT Mystery Boxes and How Do They Work?
Disclaimer: This content is presented to you on an โas isโ basis for general information and or educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the content is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. For more information, see our Terms of Use, Risk Warning and Binance Academy Terms.
Disclaimer: Includes third-party opinions. No advice. Binance AI may be used without guarantee.ย See T&Cs.