Not Just a Game: The Economic Strategies and Future Prospects Behind Telegram's Click-to-Earn Model

Original Title: “Telegram Tap-to-Earn Gaming Is Huge. Can It Avoid Play-to-Earn's Fate?”

Author: Ryan S. Gladwin

Translation: BitpushNews

As of 2024, one of the biggest winners in the cryptocurrency space is Telegram gaming. This week, ahead of the airdrop, "Hamster Kombat" attracted 300 million players, while the token issued by "Notcoin" has a market cap close to $3 billion—this click-to-earn game has produced one of the top 100 tokens globally.

All of this revolves around the "tap-to-earn" mechanism, a simple concept but with an increasing number of variants and derivatives. Has this model truly evolved after the "play-to-earn" gaming craze that dominated the last bull market? Or is "tap-to-earn" destined to suffer the same ultimate fate, being ridiculed and dismissed by the masses?

In 2021, the "play-to-earn" model was extremely popular, especially with monster battle games like Axie Infinity, which at one point had nearly 3 million monthly active users. Players needed to purchase or borrow three Axie NFTs to start playing—at its peak, the entry cost was $600 or more—after which they could compete to earn real cryptocurrency tokens.

This model was so popular that people in low-income countries began to play it as a full-time job. At one point, 40% of the players came from the Philippines.

Axie was a pioneer that promised to benefit players from their time, help people escape poverty, and redefine modern work. Many other games tried to mimic its model. However, Axie's economy gradually declined, and the prices of all tokenized assets plummeted, effectively hindering the development of the play-to-earn model.

In many ways, tap-to-earn games are similar to the play-to-earn craze. Players are asked to tap the screen and play simple games in exchange for in-game coins or points, which are eventually converted into cryptocurrency tokens sent via airdrop.

So why does the tap-to-earn model signify progress in the industry?

“Tap-to-earn games bring a hopeful innovation to the traditional play-to-earn model with their simplicity and user-friendliness,” Robbie Ferguson, CEO of gaming network Immutable, told Decrypt. “These games significantly lower the entry barrier, especially for newcomers to cryptocurrency. They are designed to build a more sustainable economic system from the start, which may help avoid some of the challenges faced by the play-to-earn model.”

Most play-to-earn games require players to invest money to purchase the game before they can start earning. This means players must invest real money. In contrast, tap-to-earn games do not have such requirements—players only need a smartphone that can run Telegram, which is a simple messaging app.

Of course, this lower entry barrier also means that the depth and complexity of the games are often limited, leading to a player experience that is often shallow and repetitive.

“Tap-to-earn as an emerging trend has indeed attracted widespread attention, but it often struggles to maintain long-term user engagement,” Andrew Saunders, Chief Marketing and Growth Officer at Skale Labs, told Decrypt. “To truly drive innovation in Web3 gaming, developers must combine the instant gratification brought by tap-to-earn with deeper, more engaging gaming experiences to ensure players remain interested in the game after the initial novelty wears off.”

Indeed, most Telegram games require almost no special skills for players to succeed. Take Hamster Kombat as an example; players simply need to repeatedly tap the screen and choose the best upgrade options to passively earn tokens—this is the basic gameplay loop adopted by most tap-to-earn games.

Some players even automate the game process by finding clever ways to do so, such as using massage guns or employing custom software scripts that may not be banned by airdrop activities. While many play-to-earn games are also seen as having shallow content, even so, games like Axie Infinity are still much richer in gameplay than Hamster Kombat.

“On the other hand, the play-to-earn model involves a complete gaming experience,” Rob Wolff, founder of Digital Asset News, who is passionate about cryptocurrency gaming, told Decrypt. “It is more engaging because it offers challenges, strategy, and skill-building opportunities, allowing the game to continue attracting players over time.”

However, this can also be seen as a drawback. According to data from Exploding Topics, casual games are the most popular type of video games in the U.S., with 63% of respondents saying they often play such games. The number of players today is higher than ever, but many of them tend to play simple games. Tap-to-earn games happen to cater to this characteristic.

This broad target audience, combined with a lower entry barrier, may explain why Telegram games seem to attract such a large user base. For example, X Empire claims to have around 45 million players, while Notcoin, as the launch game, has also reached 35 million users. Because almost anyone can join and start playing immediately.

“The main advantage of tap-to-earn lies in its potential to reach a broader audience, especially in the major mobile gaming market,” Karel Vuong, co-founder of the crypto gaming platform Treasure, told Decrypt. “By lowering the entry barrier, it provides an opportunity to bring previously untapped audiences into the Web3 ecosystem.”

Axie Infinity is a typical example, but not an isolated case. Another well-known case is the "move-to-earn" game Stepn, which became popular in early 2022, allowing users to earn valuable cryptocurrency tokens by walking and running in the real world through the sale of NFT sneakers. However, this craze quickly faded, and the value of NFTs and tokens plummeted, leading to significant losses for some investors.

The tap-to-earn model is still relatively new and has not yet exposed obvious flaws—although when players can start playing without investing any money, monotonous gameplay and below-expectation airdrop distributions do not seem to be major issues. The tap-to-earn model focuses more on user engagement rather than monetary investment.

“The economic model of tap-to-earn is fundamentally different from the play-to-earn model; it is entirely based on advertising,” Alena Shmalko, head of ecosystem at the TON Foundation, told Decrypt. While play-to-earn games rely on new participants to sustain their economic systems, as explained in Axie Infinity's white paper, the tap-to-earn model funds its operations through advertising.

This is a more sustainable payment method—advertising revenue is a way for many companies to cover operational costs. But the question is, after the initial airdrop activities, do players still have reasons to continue participating? Will the tokens retain their value in the long term?

Shmalko added, “Every application needs to create further pathways for token holders to extract value and ensure they are willing to pay for it.”

For example, Notcoin has already collaborated with other gaming projects and has ambitions to become a platform similar to Netflix for launching new cryptocurrency games. Hamster Kombat is also exploring new development routes, including expanding beyond Telegram and launching more games. It is still too early to judge whether these initiatives can retain players in the long term.

“Time will tell how tap-to-earn creates a new economic model that proves sustainable,” Shmalko told Decrypt, “otherwise, they will face the same fate as play-to-earn games—once the hype ends, the products will have no demand.”