Crypto’s hottest game is facing an economic maelstrom
ft.com
ft.com
In case anyone else was confused by the 2B DAU figure which would dwarf TikTok by a couple orders of magnitude, this seems to be a typo for 2M. E.g. https://www.coindesk.com/business/2021/10/05/axie-infinity-n...
I don't want to accuse them of anything, but it's a little "if it's feels too good to be true, then it probably is"
So much of the DeFI yield farming comes across somewhere between Ponzi scheme and the insanity that preceded the GFC, collateralized debt obligation (CDO) and the like.
If that isn't an insane red flag, I don't know what is.
In reality this seems unlikely, given that Eurphoria($WAGMI) are giving out 0.81% per 8 hours 12% per 5 days, and doubling the amount of tokens in 30 days. So in 30 days I should be able to get $200 back out, and in 1 year I should be able to get out ~$725000. 2 years and I can take out over 3 billion. Yeah okay.
It's more complex than that with bonded DAI, etc, so there is some fractional reserve of capital (at the moment it looks like 10%).
The other thing with this and all these APY numbers (yield farming, incl) is that they imply that the numbers will stay the same. I.e. will hold for a whole year. In watching uniswap/sushiswap/etc this is not even remotely accurate. Those numbers (even 200%) are fleeting, they last for a day or a week. It's not stable and therefore those numbers are meaningless.
If you're small, even being a liquidity providers on a more stable pair which return ~20-30% (i.e. a possible number) don't stack up once you include Ethereum fees. It takes quite a bit of time to earn back all the fees you spent setting it up (unless you have lots of capital)
For comparison, OHM $100 now should be $4000 after one year or $300,000 after two years.
That's why these APYs make zero sense, I don't understand how anyone can pass this off with a straight face (unless this truly is just a game to sucker in people bad at math).
You can't turn $100 into $3 billion in two years. Obviously.
They are claiming a return of 2% per day. Please.
A penny stock can claim it's "average return" is 100% per year because it went from 1 cent to 4 cents in 2 years.
That isn't saying much.
It may not be a ponzi scheme, but if it keeps growing, we will hear about it as a new panic in US.
Chinese Genshin Impact players are actually more protected from exploitation than players in the US. It's wild. I suspect we'll probably see regions like Europe adopt similar regulations over time.
Lot of interesting projects happening in DeFI 2.0 and DAO space. One example: https://www.klimadao.finance/
So I looked for a gameplay video on YT, and it looks very much like a typical free-to-play mobile game. I'm guessing the difference is that you can exchange the in-game currency for actual money? Not sure why you'd need a blockchain if that's the case...
Also, are these games actually fun? Or are people playing just for the money?
It's basically just a way to work around regulations. Technically the game doesn't deal with a real currency, but they give fungible tokens that can be relatively easily traded on third party exchanges.
The financial aspect of these games makes zero sense, as is the whole concept of "play to earn" which should be immediately nonsensical for anybody who has a basic understanding of how the economy works.
Yet another terrible, useless, scammy, pyramid-schemy, economically-inept concept brought to you by the cryptocurrency crowd. But hey, any day now it'll all be worth it!
so, pachinko: https://en.wikipedia.org/wiki/Pachinko#Prizes
Because otherwise nobody would pay any attention to what is obviously just another F2P mobile game?
Playing games as entertainment is totally fine (and worthwhile). But if people in poor countries are quitting jobs to do this -- to "make money" -- it is a real tragedy.
https://www.npr.org/transcripts/1018915121
More related, I’m from one of those countries where people are doing that and it is truly a tragedy but it’s not as widespread (at least in my bubble). But the thing is, a lot of people quit jobs for “get rich quick” schemes here and this is just the latest chapter of that tragedy.
> Sky Mavis, which takes a 4.5 per cent cut of transactions within the game, has made about $1.2bn of revenues
I mean, say what you want about this being a scam, ponzi scheme, etc. That is some real cash.
I saw this game popping up on Twitch a few months ago and immediately realized it was some kind of crypto scheme. I thought it was gambling. The fact that this is generating billions of revenue and attracting hundreds of millions of brand-name financing amazes me. The game was released in 2018, about 3 years ago.
It really makes me reconsider the group-think on hacker news. To write off this activity as a scam or criminal seems to be missing a bigger picture that we don't quite understand yet.
In a traditional ponzi scheme many people get paid, until the last people are left holding the bag.
Doesn't quite have the same ring to it, does it?
As a videogame maker myself I’d rather give my games away for free than setup the kind of economic trap Axie has.
If someone does this correctly it could end up being a very good thing IMO.
The only people who benefit from the CS:GO knives are the ones who are extremely lucky or constantly performing economic activity at the expense of the community, its not good.
That said I have nothing against player made cosmetics being sold but there are much more obviously equitable ways of doing that.
And then the elephant in the room that cosmetics are not game affecting and there is utterly no reason to use a blockchain for any of this.
This is a zero sum game: as long as more people buy tokens to get in the game, then it continue going up, and every one feels like they are getting richer. But anyone selling their tokens is taking money out of the system, from all the players. If everyone sell their tokens, there will be exactly the same amount of money that comes out than that went in, just redistributed differently amongst the players, some will lose some will win.
That’s what makes it a Ponzi scheme. The real winners here are the company behind Axie and the people like the guy from the article that just take money out of the system (from other players) on a regular basis, they are guaranteed to get more out. That's where the real success of the company happens, and you have no mechanism to get a share of that success unless you are an actual investor in $ of that company.
In that story, there are no external consumers that are willingly paying money to the company in exchange for some good or service, that would make the players richer.
With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade.
If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient.
Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think.
Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors.
Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value.
Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out.
All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.
There are players and investors who actually only buy the token and don't play the game. These are different people. Here the "external" source of money for players would be the investors who don't play the game and for investors it would be players playing the game because they think it's fun. In Axie's case that's probably a minority of people, but that's obviously not the case for most games, you only need to look at games like Genshin Impact to see that people are willing to spend tons of money on good games just because they want to spend money on it.
So yes, in this particular case it's a bad business, and I agree that the same is true for most other crypto games right now, but there's zero reason for it to remain the case in the future. Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.
They are all part of the same system, both the investor and the players buy or get some AXS, and both hope that AXS will go higher so they can make actual $ later on. None of them are putting $ in the system that they do not want to get back later on, which is very different from someone buying an iPhone: they know Apple will never give them that money back. So it's still a 0 sum game, no matter if some people are playing and others aren't.
> Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.
I agree, that's the last part of my comment. But mechanisms need to be put in place for people to spend (and not invest) actual money in the ecosystem, say through advertising, or buying things (that you cannot resell later at a higher value), and the profit needs to be in part redistributed to the community. That's not happening today in Axie, maybe it will eventually, but today it is indeed a Ponzi scheme.
>and the profit needs to be in part redistributed to the community.
This already happens through the token's increase in value. The notion that this redistribution can ONLY happen if there are money sinks in the system is misguided and old fashioned.
? Fees are generally extremely small. All the money that enters the system is from investors and from players. The fees are minimal and have almost no effect on this.
>Without people spending, not investing,
Those are the same thing because both players and investors can cash each other's money out. There's literally no distinction between both things.
>the system is doomed to hurt people who are left holding tokens when everyone else has cashed out.
That's the case with every stock that currently exists. When a company fails there will be bag holders who lost a lot of money. Ideally the company doesn't fail and keeps making games forever.
> Those are the same thing because both players and investors can cash each other's money out. There's literally no distinction between both things.
So the only people putting money into the system are investors? Like I said.
> That's the case with every stock that currently exists. When a company fails there will be bag holders who lost a lot of money. Ideally the company doesn't fail and keeps making games forever.
If you hold a share of a company, you get dividends from the profits of company separate from the market. Even if nobody wants to buy your stock it still has value.
In order for someone to make money for something, there has to be an activity that generates a cashflow. There is no cash flow being generated, there is no outside money, what value are these people creating for other people? If you are playing a game to make money, you have to be providing some kind of value. So far, this company has convinced people to put money in, the rest of the money is probably coming from investors...there is no other money (and btw, the people playing the game are clearly much smarter than Andressen & Partners, they are taking out whatever isn't nailed down and making a swift exit).
If you look at poker, it is obvious why some people are paid to play that game: they provide liquidity, they provide someone to gamble with, they provide the capital to take risk. It is the same with a bookmaker. This example has none of these characteristics because there is no outside money (the quote from a partner at Andressen's firm is incredible, I worked in fund management, I have seen some incompetent people, people who are truly clueless...what we are seeing in VC is unlike anything that has occurred in financial culture since the 20s).
This reminds me of Football Index: the details of this are complex but they essentially paid people to play a game, there was no outside money, investors didn't understand this, management didn't fully understand this, they went bankrupt earlier this year taking down tens of millions in client money (no-one who plays this games understand that they are investing in an OTC product secured against the developer, it is nothing to do with the underlying game).
That’s how a lot of scams fly under the radar, _it’s not a scam, you just don’t get it_.
Outside of cryptocurrency you can look at Theranos, it raised close to a billion dollars and was fraud from top to bottom. Within the cryptocurrency world you can look at Tether.
A few hundred million in funding from cryptocurrency investors means nothing when it comes to credibility.
This is pretty bad when it comes to crypto topics. A lot of the crypto ecosystem is toxic and gross. Schemes, scams, marketing fluff, and meme bro attitudes galore. BUT, if you can bear to pay attention and cut through the noise, there are some pretty incredible innovations occurring in crypto, gaming, and defi. HN is very dismissive on these topics. It feels to me this community dates itself when crypto topics come up, reminding me more of my grandma at thanksgiving than young innovative technophiles.
In general, when ever crypto topics come up, the pro-crypto side tends to do a pretty terrible job of establishing that there are "some pretty incredible innovations occurring in crypto, gaming, and defi."
Perhaps you could list some and change our minds?
I just saw on Twitter how some one is minting NFTs using the art of a deceased artist and their family is scrambling to figure out how to stop it. There are a lot of shitty things happening in this space.
Everything else has been pretty incremental over that time period, crypto is something really new and I suspect that's why its adherents are so obsessed by it.
Edit: Also, what exciting things are you seeing? Almost everything I see is either proposing smart contracts for intractable problems, proposing defi for intractable problems or is a straight up scam.
The thing to remember is that by now we’ve had over a decade of people making very big, obviously unfounded claims and failing to deliver much of anything. The people in that space trying to recoup their investment even felt the need to rebrand as “web3” to shake the resulting negative reputation. The obsession makes a lot of sense simply as recognition that, having failed to develop public demand, the only way for anyone involved to maintain their current valuation is by selling the possibility of future usefulness to new buyers.
We used to have lots of protocols that did different things but nowadays a lot of it has mostly been subsumed into http and we've been making and serving incrementally better (or worse depending on your perspective) websites for a couple decades plus now. If you talk to someone about the internet now, the default assumption is WWW, it's that dominant.
The last technology I think I would say was really different, interesting and widely used over the net is probably bittorrent? But even there http sites have gradually chipped away at a lot of the use cases it had.
Crypto is the first really new, interesting and actually popular "protocol" type thing to hit the internet since maybe bittorrent?
Personally I wouldn't put a penny into it because I really don't understand it, BUT if you told me in another 10 years crypto had significantly changed the world I wouldn't be surprised either, internet protocols have the power to do that, HTTP did.
The HN community is very dismissive, embraces feverishly, doesn't care about, [the rest of the stances] "crypto". There are many diverse opinions in the minds of the commenters here and this type of comment, while I've seen it's like more commonly in recent times, is clearly an erroneous over generalization.
Technical folks have left the marketing chavs alone and they've taken a concept and made it something that we hate. We hate it so much we can't see its potential.
If a bunch of people put their money into a constrained system and the price goes up that doesn't automatically make it a ponzi scheme.
Edit: 28 search results now
people are calling it out because we’ve literally seen it over and over again
The linked article is literally about the meltdown of the game's unsustainable economy, so maybe the critics understood it better than you're suggesting.
The entire Axie Infinity economic model only worked with an ever-increasing number of new players entering the economy. As player growth slows, the model breaks down.
This is why people are comparing it to an MLM or other scheme that only works as long as you continue to find more and more people to pull into the system.
The money must come from somewhere. If old players are cashing out money put in by new players, the game is up as soon as the supply of new players dries up.
It can still be gambling and/or a Ponzi schemes.
Adding obfuscation over methods to tap into greed and gambling euphoria does not technical innovation make. Cryptocurrency already attracts people who like to gamble and want to get rich quickly, so this is just docking onto a natural pipeline of marks to deploy their scheme.
I have nothing but disgust for these types of games, even without the block chain veneer. No hate against the players and we know prohibition doesn't work so not calling for a ban, but at least I can contribute a small bit of social stigma against those that profit by hijacking their customers reward functions like this.
> I have nothing but disgust for these types of games, even without the block chain veneer
That's where my question arises.
Again, the problem isn't gambling. The problem is people making money off of pushing people to gamble more than they'd do naturally.
Normal video games without a crypto element do this as well. I currently have real money tokens in at least 4 of the most popular games, none of which I can ever get anything back from except in game cosmetics. But even games like Stardew Valley that wouldn't dream of taking extra money from you are tapping into our vice centers to keep us playing.
As someone deep into video games to me this is just an evolution of world of warcraft gold, or what steam has going on with their in game items and trading cards. I can exchange wow gold/steam items for real money, which blizzard or valve takes a generous % of. I can then only use that money to buy blizzard/steam products from their respective stores. People grind for countless hours in games even for these relatively worthless (when compared to crypto/nfts) currencies. Hell people spend countless hours grinding for in game currencies that will never have any real world value at all. Mostly because it can be wildly fun to do.
I feel like a whole lot of the hatred towards the crypto space will go down in history as an old man yells at cloud moment.
Don't get me wrong, I'm the old man yelling at the crypto cloud as well, but in this case I'm the old man yelling at business foundations of questionable morality. Providing healthy food, fodder for emotional and personal comfort and growth or shelter has very different business models and foundations from providing fast food/sweets, skinner Box Dopamine drips or artificially hyped status Symbols.
As an example I play a bunch of league of legends currently. During the pandemic it's been a godsend for spending time with my friends. We've all bought multiple skins during this time which has amounted to probably a couple of hundred dollars between all of us. You can also earn random skins, but because typically people don't play most champions these random skins often just sit there wasted. What if instead those random skins could be sold or traded to other players? Take it one step further, what if there were unique skins that only 1 player could have at a time? I could see something like that selling for thousands of dollars. It creates a load of economic activity at the cost of absolutely nothing. We're all already using the systems in droves, crypto/nfts are just a way to have some form of actual ownership.
It's a brilliant concept, and the moral argument against it really is also moral argument against everything already in place in most of the biggest industries around.
Other points touching on ideas you raise:
1. If I understand correctly, has a 20% premine system of AXS that represents ownership of the platform. Even if it didn't have a premine, this is the same as having a public corporation owning the platform. If Axie was a co-op where every player had 1 vote and would share equally in the profits, it'd be a bit differen, but otherwise, you can just buy tencent share if you want t participate in the success of the game 2. You are describing any game with tradeable assets, e.g. Pokemon. Right now, millionaires are making more money with pokemon unboxing (or maybe that fad died already), and similarly whoever has the best starting position will cash in on Axie...as long as enough people FOMO in 3. Which goes back to the dual fundamental sicknesses of capital tendency to concentrate and corrupt if left unchecked and profiting off of these easily exploited human desires without providing value in return. If you enjoy playing a game, you will pay for a game. That's fine. But we call artificial sparsity, spaced random rewards etc. dark patterns for a reason. Acting like the business model of e.g. brother's a tale of two sons and Axie are the same is disingenuous (and DotA existed without needing a company running the skinner Box...)
I think this is a much more fruitful (if ultimately tautological due to its very definition) form of argument; you're a modern socialist and modern socialist mores drive your criticism. That brings up two questions for me:
1. What's the point of bothering with commenting or thinking about cryptocurrency at all? Cryptocurrency is all about a belief in some market, which socialists reject. It would be like a market libertarian criticizing the Soviet Union on the basis of not having a market; ultimately fruitless.
2. Do you voice similar opinions on all capitalist issues in which marketing and commodification are present? It would seem from a perspective of utility that cryptocurrency is probably one of the least harmful examples of this phenomenon. Do we disagree on our utility metric? Does utility not factor into your ethical judgement (e.g. are you a virtue ethicist)?
https://en.m.wikipedia.org/wiki/Libertarian_socialism
https://en.m.wikipedia.org/wiki/Market_socialism
>Early models of market socialism trace their roots to the work of Adam Smith and the theories of classical economics, which consisted of proposals for co-operative enterprises operating in a free-market economy.
Second, just because you reject something still means you are allowed to present arguments against it. Otherwise only those who hold crypto would be allowed to think or criticize it. You aren't giving arguments against the critiques presented right now, you are just going "ah, you are a socialist, that's why". If you disagree with the critique I'd love to hear your reasoning, but what does labelling and rejecting add?
Third, yes, I do in fact. Marketing, exploitation and hostile business practices are my main problems with the current system, I don't have a moral problem with property, capital etc. If we can configure a capitalist system to be non-exploitative I'm down. One way (not realisable, semi-joking) could be to impose a hard cap on individual wealth (say 100 million, or a multiple of the median to make it timeless) with the excess poured into a UBI (land would need its own treatment but I'm just being funny right now). This would even out power dynamics, avoid dynasties and allow market forces to take hold. We can add a form of new-game-plus for those that need extra motivation, if you build up more wealth and hit 500mil, 1bn , etc you get a progressively more impressive Roman-style triumph as recognition - you still don't get to keep it though.
Fourth, you are making a nonsequitur going to utility now without taking the time to define terms. I don't think of myself as a virtue ethicist nor a utilitarian, but I do think there are some things people want that a utilitarian would still say has negative utility. Is selling crack, fixing up people to opiods or drawing them into cults providing positive utility for you? How about adding extra sugar, salt, MSG and fat to food to make it more palatable with cheaper ingredients, and possibly more unhealthy and addictive? Is it positive utility to use marketing to create a perceived problem and then selling the solution?
Yes I am familiar with this fact. That's why I said "modern socialist mores" in my above post, which was admittedly probably doing too much work in my head and not explaining enough. I find that libertarian socialists, market socialists, minarchists, and market anarchists are not really popular leftist positions anymore. Most socialist spaces I encounter these days mostly consider communism, socialism, anarcho-communism, or anarcho-socialism.
> Second, just because you reject something still means you are allowed to present arguments against it. Otherwise only those who hold crypto would be allowed to think or criticize it. You aren't giving arguments against the critiques presented right now, you are just going "ah, you are a socialist, that's why". If you disagree with the critique I'd love to hear your reasoning, but what does labelling and rejecting add?
Imagine if someone in the comments critiques the West's decadence and ascribes it to the West's consumption of pork. To many ethical frameworks, the reasoning would be odd; why pork of all things? In Islamic ethics, however, that is in fact a reasonable line of criticism. Likewise your positions seemed to reject a lot of things taken for granted in everyday life in many developed countries which is why your remark about being a socialist makes more sense. I'm not rejecting socialism; knowing you're a socialist makes your critique more understandable.
> Is selling crack, fixing up people to opiods or drawing them into cults providing positive utility for you? How about adding extra sugar, salt, MSG and fat to food to make it more palatable with cheaper ingredients, and possibly more unhealthy and addictive? Is it positive utility to use marketing to create a perceived problem and then selling the solution?
I don't believe it's the role of the State to police any but the most deleterious mores. I believe that humans can form social mores against the excesses of vices and that having the State enforce social mores often results in more negative than positive externalities. When there's a large collective action problem, say environmentalism, I _do_ think in terms of utility, which is why I was asking about utility. I largely think the negative utility imposed by cryptocurrency scams upon the environment is far outweighed by the negative utility of other things so, much like the renter that uses more water than they should because their management pays for water, I consider it one of the many tiny sources of negative utility out there that is only worth tackling once bigger targets have been tackled.
You are using very wavy forms of utility. How do you define utility? I was thinking on the utility of the individual, asking about whether something like getting lost in gambling addiction after someone caught you in their funnel is truly positive utility because you "want" it.
In the same vein as your 2nd point, I'm also gonna guess you are more of a libertarian/minarchich bent because of this because while in my experience statist tend to oversimplify and wishful-think the impact of the state and anarchists tend to oversimplify and wishful-think the willingness and ableness of a group to self-organise in an anarchist way, libertarians in the US style/minarchists tend to oversimplify the question of self determinism and have inconsistent thought on what exactly the role of the state should be (it should exist because otherwise you can't have private property, but everything else...) and don't consistently acknowledge predatory behaviour that preys on human vices exists and works (AGAIN: I don't want to police the vices, I want to curtail profits on it. Self-organised vices without additional motivators are fine with me).
I also find it interesting that you claim you think term of utility and externality on collective action problems but then don't consider price of action - we don't lose anything big with crypto right now, but we would gain at least a finlands worth of energy to blow on other things ( https://www.nytimes.com/interactive/2021/09/03/climate/bitco... ).
That is an inaccurate/misleading summarization of my post. It is a least-charitable interpretation structured to forward your own viewpoint.
When I thought the game was simply gambling I ignored it (and in fact I assumed it was earning high revenue). This financial times article explained that the game is not gambling and instead is something more complex. The mechanic of ownership allowing players to lend in-game assets to free players for the purposes of in-game currency generation is novel to me. The additional fact that the earned in-game currency can be converted to real world cash is not novel but certainly interesting when combined with the former.
Ostensibly, someone can find a sponsor who will lend them in-game assets. They can then apply/increase their skill in playing the game to earn a share of in-game currency. So for zero stake they can earn in-game currency that is convertible to real world cash. That, to me, is NOT gambling.
Another person can invest real-world cash to buy in-game assets. They can then seek out people willing to play the game on their behalf. By finding and retaining the best players they can earn a share of the most in-game currency. That, to me, is close to gambling. It reminds me of horse owners who participate in competitive racing. People gamble on the outcome of races to be sure. But it is a stretch to me to think of the horse owners as gambling. They are investing in the best horses, the best trainers, the best jockeys with the hope that those investments will lead to enough wins to turn a profit.
A growing market, especially on Twitch, are competitive gaming orgs. These orgs seek out the best game players and sign them to contracts. They then turn a profit by leveraging the players success into brand sponsorships. I see a lot of parallels between the mechanisms behind this game and real-world economic activity.
The fact that a pretty prosaic mobile looking game ballooned to such a valuation and attention suggests to me there is something worth being curious about here. It is causing me to think. Apparently it is causing you to turn away in disgust.
Right now, it's difficult to differentiate from a pyramid scheme. There are RNG elements related to breeding, which means the best this game can hope to be compared to is poker, except it has the added layer of cryptocurrency "investment" which taps into the same energy as gambling and pyramid schemes, which I guess makes sense.
Without being mean spirited: do you also see something profound and interesting in GME and other meme stocks? Because in my opinion, just because it got a lot of attention and money doesn't mean that there is something meaningful there. Bernie Madoffs scheme took from the 90s (maybe 70s) to 2008 to implode, bitconnect rose and fell faster.
And as I clarified in another comment, what is causing me to voice disgust is the fact people are using these schemes to get rich off of others. And I think that even if we cannot to anything else, social shunning still has its place as a soft regulatory mechanism. If it people want to go to Vegas, let them have Vegas, if they want to gamble in this, let them gamble, but we can still express our distaste and deny respect. (Not that I think I matter much here, even if people were to follow my lead I'm sure the founders will dry their tears with dollar bills)
Skimming a percentage off every transaction to make a profit is what casinos do. Of course it's possible to make money this way. It's not gambling when you're the casino. It's still gambling for everyone else.
Or imagine a digital casino, because that's basically what this game is.
I'm surprised these games aren't more popular. Maybe because if they truly become mainstream, they're basically guaranteed to be shut down or heavily regulated. Either that or millions of people will go broke, already-broke people will accumulate massive debt, and people will be playing these games instead of getting a job. It would probably affect so many people that it would actually cause major economic problems.
Like, I honestly think crypto-games are really cool. I kind of want them to succeed and would play some myself (in moderation). But just, considering what we know about addiction and human nature, a game where you can actually win enough money to play them as a full-time job seems like the ultimate way to take money from disadvantaged people. "The addictiveness of social media, the addictiveness of lootboxes, the addictiveness of casinos - those have nothing on games where you can actually make money.
I find pretty much every casino game beyond incredibly boring. The only appeal seems to be greed-- if you take that away (or decide you don't value it), they lose all luster for me. I know this opinion isn't universal - some people will play simulations of those games for hours with no real money on the line - but I can't be the only one. There are so many much more enjoyable games out there that cost a lot less (or nothing) to play.
I've thought for a very long time that if they ever manage to come up with casino games that are actually fun for more people to play for long periods, it would be a catastrophe for gambling addiction. All the same, I can't help being curious what it would look like. I'm honestly amazed it hasn't happened yet; you have to wonder whether there's some kind of hard barrier holding it back. How anyone can sit so long in front of a machine which consists of nothing but pushing a single button completely befuddles me.
On the flip side, as someone who used to be an obsessed video game player, behind all the fancy media assets, all I see in most videogames is running through a maze and watching the output from pseudorandom number generators.
To make a casino game that is actually fun, by gaming standards, I think it would look like World of Warcraft with an in-game integration of marketplace for gold and items instead of going to ebay.
That's what happened with Diablo 3's Real Money Action House and... It didn't end well.
They had to convert the RMAH to a regulat AH after some time.
I dislike the custom of using the word "addiction" to describe gambling; but it certainly shares many features with chemical addictions, including the role of habit.
I'm suggesting: for some people, being dependent on something is a goal in itself. Actually, I'm not suggesting; I'm sure it's so for my personal microsample, which is entirely based on chemical dependencies. But I believe it might also be true of various psychological dependencies, like gambling. I've just never known anyone that had a gambling dependency.
This is much closer to a pyramid scheme or just a contained economy with really bad incentives
For example the Ponzi scheme version of this would be if you told people you were going to make a game with crypto as currency and told people that if they give you money to invest you will make them money in the in game currency.
You would never actually make the game or the currency, you would just keep selling the promise of making the game to more and more people and then paying out the first people with the later people's money if they decide they want out.
That would be a real Ponzi scheme. Pure cycling of investor funds with no underlying product.
If mid way through you actually decide to make the game and attempt to sell real gameplay, it's no longer a Ponzi scheme, just a shitty company. (although based on the length of the preceeding time period, it's likely what you did was still classified as a Ponzi scheme at a certain point and you still have probably broken securities laws and have liability)
Unlike Axie in which people are creating revenue in the system by buying stuff and is at least hypothetically possible to be solvent, the true Ponzi scheme by definition can never be solvent.
A Ponzi scheme "pays profits to earlier investors with funds from more recent investors"
A pyramid scheme "recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products"
According to history this is not a wise move.
But return to investors is not even the important thing, it is that normal businesses should get outside money by providing some kind of goods or services.
The problem with axies is that they claim everything is exchangeable back into money so there is essentially no “outside” money.
AFAIK, there's nothing inherently illegal about pyramid schemes, but they are often marketed in a fraudulent way.
Just trying to understand the innovation. Is it primarily that game rewards can be exchanged on chain, while the granting of the rewards is still centralized?
AXS is the governance token and is premined, mainly held to fund the team, given out as rewards to players and given out as rewards for keeping AXS staked. Used for breeding new Axies
SLP is the token gained by playing the game, this token is also used for breeding new Axies. The game servers sign a message allowing you to claim the SLP from a smart contract on the ronin chain, this part is not completely decentralized.
Thanks for agreeing to answer questions! I’m very intrigued!
I'm also involved in breeding new axies which is more complex and time consuming. The return of that varies a lot, but can be very profitable, very hard to put a number on that but I'd say las few weeks it was probably 250% APR if you didn't get too unlucky.
I would probably cash out a lot of things, but I feel bad for making 100 people suddenly unemployed, so I will probably stop expanding but not actually selling off all my things.
I guess it's Entropia Universe now https://en.wikipedia.org/wiki/Entropia_Universe
There will be no need for traditional work for many people, as every person will have access to the game world through their mobile device and biometric signin.
The intrinsic value of cryptocurrency is basically zero. Even the scarcity factor doesn’t have much weight because it’s trivial to just create a new currency and “print” more. Unless the US government or some other government backs a coin, that’s just how it is.
So a “job” where people mine coins all day is producing absolutely nothing of value. If someone is making money in that situation, that means someone else is being scammed somehow.
It's 100% green, and based purely on sustainable renewable resources.
NFTHC: Burn Weed, Not Coal!
https://www.coindesk.com/markets/2021/03/15/the-brooklyn-bri...