By Rolando Rodio | Translation by Nadia Sol Schneider
AXIE INFINITY: Have we been scammed?
Nowadays, it’s pretty common to hear from friends, or colleagues things such as: ¨Hey, if you invest in this game, which has an x amount of profitability, in just a couple of months you can recover your initial investment and start winning¨
In the big picture, it sounds amazing, because who doesn’t want to earn some money just by playing video games a couple of hours a day?
Throughout 2021 the vast majority of people were unaware that behind every game, Peso, or Dollar invested there was a huge bloodthirsty market waiting for new inexperienced contributors.
But let’s start with the basics: most of us entered to play with the now famous catchphrase: ¨Someone is going to give me a team with three Pokemons and I’m gonna make some cash by playing a couple of hours a day, it’s crazy!¨
Even though NFT games have been around for a number of years, in 2021 they caused a great peak after that the secondary Axie’s token that is used in the game known as Smooth Love Potion (SLP) reached its highest market value of $0.41 USD. But how did it reach this position?
During the 2020 obligatory confinement due to COVID-19 some low income countries started to play much more frequently than usual, as they did not have another income source, this occurred particularly in The Philippines until the boom landed all across Latin America. Axie Infinity had an exponential growth of users that needed more characters (known as Axies) to play and were generated by spending SLP and AXS (the main Axie’s cryptocurrency). As a result, more users required more Axies and this translated into a greater demand for SLP resulting in an increase of the token’s value.
In a normal gaming development, without these enormous expectations this situation would have taken several years to happen, but within the context of the pandemic and its economic implications it led to a whole country to play, and when the market smells blood, there is not much more to do. The news starts to run about a NFT game that is ¨smashing it¨and here is where the big fish and speculators get their hands on.
While the game was out for two weeks due to the massive influx of new users in the servers and consequently, the token’s value dropped drastically to $0.08 USD the rentability was still very high and now the news was running in our continent. Let’s take a look at how the countries with the most severe economic problems are always the first ones to jump on the wagon.
Here is where the winner’s friends come into play: Youtubers. Many of them had never talked about what a blockchain or a NFT was, and they suddenly started to upload tutorials about how to earn money in Axie Infinity and Plants vs Undead, the two big giants of NFT gaming of 2021. Disclaiming first that they did not provide their audience with financial assessment nor were they inciting people to invest, to posteriorly make of the videos a constant bombardment of ¨TAKE A LOOK AT THIS LUDICROUS EARNINGS I AM MAKING! WITH THIS RELATIVELY SMALL AMOUNT INVESTED IN THE GAME YOU ARE GOING TO BE YOUR OWN BOSS, IT’S A WIN-WIN SITUATION, MY ACADEMIA HAS OVER A THOUSAND SCHOLARS!¨And things like that.
Where does this leave us? What happened in The Philippines started to occur in Latin America. People started to mortgage their houses, sell their cars, spend all their savings, take loans, among other activities to pump money into the game. To put you into context: In early 2021 a competitive team of Axies was around 3.000 USD and by the moment it burst in this continent the price was about 1000 to 1500 USD, taking into account professional teams. It was insane.
Well, let’s go back in time: the market is soaring, everything is good. Youtube cryptobros are repeating endlessly that Axie’s is going ¨to the moon¨ nothing can be better, and the next updates will bring the value of the SLP to over $0.10 cents and you just have to hold on and keep on playing. Not to mention about BTC, (Bitcoin) and ETH (Ethereum) when they were at their highest selling point for $60.000 and $4.000 USD, respectively. In the meantime the wrongdoings and most miserable acts to take advantage of the players began: Recommendations to join to new projects that were dumpsters and scams.
The hunting for new inexperienced investors increased, many people were relentlessly on the look for new users to sell them to the highest bidder. It just took a simple Youtube search as: ¨New NFT game, better than Axie Infinity¨ to see how they took advantage of the people that had little knowledge of what was happening . These actions led to many people to invest their savings or income into projects that never saw the light of day and lost a great sum of money, and in some cases, being left with nothing.
And it wasn’t just a particular case with games, there were youtubers selling their own NFT in exchange for benefits, in other words: They would sell you a digital sticker with the promise that after some time they would reward you with a class on crypto market investment, or some other charade that would never come true at a ridiculous price.
At this point we are getting close to finishing 2021 and everything is still rosy in the FOMO youtube channels of the ever growing and still flourishing market of NFT games.
BIASED INVESTMENT: HAVE WE BEEN IRRESPONSIBLE?
It’s time to make a parenthesis in our introductory story, because up to this point we have only read “bad youtubers, deceived users” and the purpose of this article is to try to go a little further and, if by chance any clueless person comes across this post, let’s leave them with a broader picture of the questions raised in the title.
We are talking about Axie Infinity, the NFT game pioneer into the introduction a lot of people to the crypto market whether as a scholar (Someone who plays in another person’s team for a percentage of the earnings) or as a manager ( someone who owns a team or an academy of Axies).
We are not going to dive into how to play the game because there are a lot of articles about that but just to give you a glimpse; by completing missions or defeating other users the players were rewarded with SLP tokens that could be exchanged into USTD (A stablecoin equal to 1 USD) in a crypto exchange like Binance (the current sponsor of Argentine soccer) and this way they obtained their real earnings. So far everything sounds pretty, but let’s get to the point: The vast majority of the scholars and quite a lot of managers never instructed themselves about how the cryptocurrency market worked.
Why would it never drop its value? Could you really live by playing Axie Infinity two hours a day? Who presents the information that I am consuming through Youtube? Is this a ponzi scheme as some people say? Do I have to invest more now that the AXS (Axie’s Infinity main token) is on an all-time high just in case that it keeps escalating?
For anyone who would have asked any of these questions in the shoutbox of our dearest cryptobros it would have resulted in calling them a hater or putting them aside, but a few were against the money from the publicity to warn the community about the risks of investing in an upward market.
It is true that the SLP is an unlimited supply token that is obtained by the mere act of playing constantly every day, and let’s not forget that this game hosts over 2 million players, actually 2.8 million, but let’s leave it there.
Then, the SLP keeps its value because there is not enough to supply the new players that need it to create more Axies, diversify their teams, and get more scholars. But as time passes, more SLP is issued. Remember that in April 2021 there were just 38 thousand active players and by the end of October that number skyrocketed to nearly two million to reach 2.8.
This drives us to the conclusion that with the passing months there was an ENORMOUS surplus of SLP (totalizing 43 billion as of today) and an Axies overstock in the marketplace.
Looking back now it seems obvious, but during the game’s momentum and fueled by a multitude of influencers most investors didn’t see this coming, and kept buying and getting into the game when the bubble was about to burst.
After the internal economy became unmanageable because of the SLP flights that were minted (generated) faster than they were burned the token dropped 95% its initial value .
But, is all of this someone else’s fault? Do we have to invest in something because a person or entity sponsored by entrepreneurs says it? Should we take accountability and recognize that it is NEVER advisable to invest in a volatile market without being informed about the risks? That information was there from the beginning. It was a matter of looking it up and waiting for the most propitious moment to get into it taking into account that the inflationary barrier of the game would diminish and recovering the investment would have been much more simple.
Despite all of this, the number of active players stayed high and many scholars used their earnings in SLP to buy their own Axies in the middle of the crypto winter and kept expectant to future updates.
Axie Infinity’s new game stage points their users to get into the game for the sake of playing and not just to take it as business. Remember that this is a game, and that without players it would be incapable to sustain itself in time. It is currently in its alpha stage, being almost in the point of entry at the moment of writing this article. All it needs is one one last push to go massive. As it has already been said: the game has this amount of players without being in the market and a lot of good publicity, which is something promising for the Sky Mavis team (Axie Infinity developers) as long as they do the things right from now on.
The last updates have purged the game from market investors and have attracted more players. The main youtubers that upload gameplays (and not cryptobros) are coming back after the initial disenchantment with the release of Origin (Axie’s Infinity final stage) which is making it really fun for the people who enjoy these kinds of games.
Truth to be told, a lot of people feel they have been scammed, because they got into a game in its peak, with words of encouragement and a promising future. But Sky Mavis took not just bad, but terrible decisions by not controlling the issue of SLP which in turn made the market collapse causing the loss of millions for many investors who didn’t know when to quit. This, to my understanding is both the fault of the developers, who in less than a year lost a project from their hands because they didn’t have measured their massive growth, and also, uninstructed investors entering into a an unknown world without much more guidance than youtube videos saying that they would recover their investment in three months time and would double it, at least.
The question arises again: Have we been scammed or irresponsible? Every person can answer that for themselves. The one who writes these lines was biased by the epic discourse of ¨to the moon¨ and has invested in a time it shouldn’t have been done. But all in all, I don’t feel scammed or irresponsible. I’m in the middle ground, because entering into the world of investments without having studied the market is wrong, not knowing the game’s origin, the token’s stability and future outlook is also wrong and betting into a game just because it’s cool is also a mistake, same as taking advantage of your followers. But each person has to do their own internal reflection about their actions.
With all this being said, is Axie Infinity dead? Well, Axie Infinity is online with over 2 million active users a day, if it can be played, then it’s not dead.
But don’t be silly, Rolo! Is Axie’s economy dead? Well, quite frankly, yes. If you invested a lot before the crypto crash then it’s very unlikely that you will recover your money, but if you are thinking that this is a good moment to enter into the market, get informed: read a lot of articles about it, and look for people who shares non sponsored content to draw your own conclusions as of today the floor price of the most basic Axies is of 0.004 ETH which is around 7 USD
I personally still have faith in the project, putting the money I lost aside, because the game has engaged me again and my goal now is to earn rewards battling for top spots, doing what I did when I started: Having fun!
This moment and this context is ideal to study and understand the market; many opportunities are being given in several areas due to people running scared because they entered at the peak of the hype and then did not know what to do with their investment. Not only in Axie, there are other great games in progress that are taking the path marked by Sky Mavis in order not to make the same mistakes and go out into the field more prepared. But watch out for scams, scammers will never cease to exist as long as there are people making videos like “The new Axie”, “The future of NFTs”, etc.
And the truly wonderful thing about starting in this world through gaming, is that, if your soul has a shred of curiosity, it will take you to the other side of investing, crypto and exchanges, trades and daily market analysis. This year is full of possibilities, you just have to go out and find the right information and the right teachers.
Play for fun, be prepared before investing and always be aware that whatever you spend, you can lose with a bad move. Never expose your savings or your assets and give Axie Infinity Origin a chance, it has a starter pack to play for free, you will have fun!
And no, Sky Mavis does not even pay me for the yerba mate I drank while writing this article.