Risk To Earn, A New Sustainable GameFi Model

We are comfy, knowing that Risk To Earn is a sustainable, not perfect, but sustainable model for GameFi and its players, one that rewards them on a meritocracy, not based on monotonous grinding.


Risk to Earn encompasses the idea that, in any exchange between actors, for there to be some reward, there must be some risk entailed. The economic root for this exists in the phrase “There is No Such Thing As A Free Lunch”, or, TAANSTAFL.

We’ve seen many GameFi projects rise swiftly, just to fall much faster. Why? This could be due to their game-play not being up to par, their tokenomics being unsustainable for its longevity, or any mixture and plethora of other reasons. For the purposes of this article, we will focus on the tokenomics/economic sustainability of what has been seen in GameFi so far, and why Risk To Earn is a better way to move forward.

Rather than merely awarding players for participating, Risk To Earn rewards the player based on merit, and gives the chance to all players who want to try their hand at success based on skill, not how many tokens they hold, which characters they can afford, or how much they can grind for items to sell.

Play-To-Earn, An Everlasting Supply Pressure

The common Play To Earn game goes something along these lines:

  • Acquire some asset, generally an NFT, to play the game. Not always the case, but possibly could be a token as well.

  • Play the game.

  • Win the game, and earn some token, which has no risk attached to it, other than having bought the asset(NFT or token) originally. Lose the game, and receive nothing, but also lose nothing.

  • Generally, it is the case that, if you are to earn from playing the game, you must sell the asset to someone else, and with ever increasing supply, since the tokens/assets are created based on emissions, there is always a supply side pressure of selling.

    There is also the system of breeding, which is quite common. An NFT/asset is acquired, then, can be “bred” to create more of them. Of course, at some point an asset becomes no longer breed-able, but this still causes the underlying structure to be formed.

    The common practice, is to

    1. Identify the current game-play meta’s character/asset

    2. Acquire that type of asset (Warrior class, Sorceror, etc), which, introduces an entirely new problem of Pay To Win

    3. Breed and create more of the asset, which increases the supply of it, and hopefully sell that asset to a player willing to purchase it from you so they can have the meta-dominant character for the game.

    Again, in this model, creating more supply decreases the value of each token by diluting supply, and at the same time, creates a terrible problem most often of Pay To Win (if the assets are not purely cosmetic), as well as forming the above structure. Most of you, if not all, know what this looks like over the long term. It is not sustainable, even within large projects that have achieved broader market exposure.

    Risk To Earn, A Better Future for Sustainability

    The Risk to Earn model is simple. Complexity is often unnecessary in solutions, where more moving parts means more possible issues. Rather than a game of creating new supply constantly and having to pay an “entry fee”, as is the case when having to buy some asset that is used to funnel money back into the system, the Risk to Earn model follows a more sustainable path.

    The premise of Risk to Earn, is that it is a zero sum game, in likeness of a financial market and “trading” as its often called. When one person loses a match, another person wins a match, and following suit, when one person wins, they receive the “risked” bounty from the person who lost. This is the reason it is called Risk to Earn.

    Both players must risk a wager sum, and upon losing the match, they lose the risked sum to the person who won.

    This is sustainable, since it is a zero sum game, and the same bounty continues to be exchanged back and forth between players.

    The treasury then takes a small fee upon a successful exchange, just as when using a trading exchange, a fee is taken on trades as well. This is no different, except that funds are reinvested from the community treasury, back into the game, its ecosystem, development, and funding for marketing to a broader player base, increasing the circle of the zero sum game.

    Below is a diagram that visually depicts what the Risk to Earn model looks like from a bird’s eye view.

    As you can see, tokens that are wagered are either exchanged between players, with a small cut going to the treasury, or can be traded on open markets. Players don’t increase the supply by playing the game. Meanwhile, the treasury reinvests into the size of the bubble by growing the player base, and bringing fresh content, as well as maintaining infrastructure like the servers.

    This model is simple. There is a risk entailed with every “trade”, but in this case, the bet is not on the price of something, but rather akin to sports betting, where you bet on yourself, or even others, as a spectator.

    This is not just a model that Trident will utilize, it is hopefully the beginning of a new trend in GameFi, something that will power the players, and bring in a whole new way to achieve greatness through playing games.

    You have direct control of the reward you obtain. With sovereignty and independence there is risk, and this provides meaning, and legitimacy to the economics. Without risk, there cannot be a reward. This model follows TAANSTAFL.

    To conclude this short article on what Risk to Earn means, and why it is a more sustainable model for empowering players than Play to Earn, here is a quote on risk.

    “Never was anything great achieved without danger.” - Niccolo Machiavelli