Play-to-Earn Scholarships – Why This Model Collapsed and What Replaced It

The Scholarship Model Is Dead

Play-to-earn scholarships — the system where investors lent NFT game characters to players who earned tokens in return — was one of the defining innovations of the 2021 crypto gaming boom. By 2023, the model had collapsed entirely.

This article was originally written in February 2022 as a guide for players seeking scholarship opportunities. Every guild recommended in the original article is now either inactive, pivoted to a different model, or defunct. This article has been rewritten as a retrospective to help readers understand what happened and what replaced it.

What Were P2E Scholarships?

The concept originated with Axie Infinity, where starting the game required purchasing a team of three Axie NFTs — an investment of $600 to $1,200 at 2021 prices. This high entry cost created a natural opportunity:

• Managers/investors purchased Axie teams
• Scholars borrowed those teams and played the game daily
• Earnings (SLP tokens) were split between manager and scholar, typically 50/50 to 70/30

The model gained massive traction in the Philippines, where Axie scholarship earnings initially exceeded local minimum wages. At its peak, "Axie scholar" became a genuine job title, and the Philippines Bureau of Internal Revenue began requiring tax on P2E earnings.

Why Scholarships Collapsed

SLP Hyperinflation

The fundamental problem was token economics. SLP (Smooth Love Potion) — the token scholars earned through gameplay — was inflationary by design. The game minted far more SLP than was consumed through breeding, creating constant sell pressure. SLP crashed from roughly $0.36 to under $0.005, making scholarship earnings worthless.

The Ronin Hack

The $625 million Ronin bridge hack in March 2022 further damaged the ecosystem. While Sky Mavis raised $150M to reimburse users, trust in the platform never fully recovered.

Unsustainable Economics

The scholarship model was fundamentally a zero-sum redistribution system:

• New players buying into the game funded existing players' earnings
• When new player growth slowed (inevitable in any market), the reward pool couldn't sustain payouts
• Scholars earning and selling SLP daily created constant downward pressure on the token
• The system needed perpetual growth to function — a characteristic critics correctly identified as Ponzi-adjacent

FTX Collapse

The original article mentioned FTX Exchange as supporting scholarships through its partnership programs. FTX collapsed in November 2022 amid massive fraud by founder Sam Bankman-Fried, who was later convicted and sentenced to 25 years in prison. Any FTX-connected scholarship support evaporated.

What Happened to the Guilds

Yield Guild Games (YGG)

• Status: Pivoted — no longer running scholarships
• YGG token: Peaked at ~$11.85, fell below $0.50 by 2024 (95%+ decline)
• What they do now: Pivoted to "SuperQuest" — a quest/achievement platform where players earn by completing tasks across multiple games. More akin to a gaming rewards platform than a scholarship organization
• Layoffs: YGG reduced staff in 2023 during crypto winter

Liberty Gaming Guild

• Status: Inactive/defunct
• Website appears no longer operational

RoboFi Guild

• Status: Pivoted away from gaming guilds
• No longer offering Axie, Illuvium, or other game scholarships

Avisa Games Guild

• Status: Inactive
• No significant recent activity

What Replaced Scholarships?

The crypto gaming industry moved away from the scholarship model entirely. What replaced it:

Free-to-Play Entry

The biggest change is that most successful web3 games now let anyone play for free. Games like Pixels, Gods Unchained, and Axie Infinity: Origins all offer free starter assets. The "expensive NFT required to play" barrier that created the need for scholarships no longer exists.

Quest and Achievement Platforms

Platforms like Galxe, Layer3, and YGG's SuperQuest reward players for completing specific tasks across multiple games. This is closer to a marketing rewards program than a scholarship.

On-Chain NFT Rentals

The ERC-4907 standard enables trustless NFT lending without needing a guild middleman. If a game does require NFTs, players can rent them directly on-chain without profit-sharing agreements.

Airdrop Farming

Players now often play new games early hoping for token airdrops — the crypto equivalent of early-adopter rewards. This replaced scholarships as the primary "earn by playing" strategy, though it's highly speculative.

Telegram/TON Mini-Games

Tap-to-earn games like Notcoin and Hamster Kombat provided zero-barrier entry points that captured the same demographic that scholarships served (players in developing countries seeking modest crypto income), though most of these also proved unsustainable.

Lessons from the Scholarship Era

The P2E scholarship experiment taught the crypto gaming industry several important lessons:

Original Article (February 2022)

The following was our original guide published on February 4, 2022:

Scholarships, yield guilds, and rented NFT characters were presented as approaches that helped new players test out games and achieve earnings without paying upfront. In exchange for playable characters, scholars lent their skills and time to the game.

The article recommended Yield Guild, Liberty Gaming Guild, RoboFi Guild, and Avisa Games Guild, and noted FTX Exchange's partnership support. It described scholarships as "a relatively low-risk way to test out games and earn income."

With the benefit of hindsight, the risk assessment was too optimistic. While scholars didn't risk capital, they invested significant time into a system whose rewards could — and did — collapse to near zero.