Just how sustainable are play-to-earn and participate-to-earn business models in web3? What risks do they pose to users? - web3 playtoearn
went from something dismissible to something enormous, especially regarding its value. I remember initially wondering: ‘how are they worth SO much?’ After all, using Facebook had always been free, so it doesn’t matter how many billions of people have accounts and use the site: free multiplied by any number is still no profit. What’s the secret?
As web3 unlocks new business models, it behooves us to remember this phenomenon. New services, social media platforms, apps, etc., will entice eager users, who will zoom through signing new terms of service - and may end up paying unexpected prices. When a company or brand starts making promises and offerings that sound too good to be true, we should look deeper because there ARE risks. Some we know about, and some we don’t… yet.
“How can they afford to do that? How do they make money if new users cost them more money? How does that make sense? What am I not understanding?”Why would someone start a business around this model? There are three possible answers. Answer two: Subsidizing use will be a relatively small cost as compared to the revenue opportunities that this use creates.
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