Axie Infinity – controversial Vietnamese game in the Philippines: Means of income or Ponzi model?
Dominic Lumabi is sitting in his home in Manila, playing a game using NFT cartoon characters to fight other players. But for him, this is not just a game, he is making money to support his family during the pandemic.
His main source of income is from Axie Infinity, a type of play-to-earn game that is emerging in developing countries like the Philippines, especially when the COVID-19 pandemic has caused many people to lose money. fall into unemployment.
The fans of this game say that this is an internet revolution. Meanwhile, there are mixed opinions that this game will soon collapse, some even say that this is a scam scheme based on the participants’ hype and the speculative nature of the game model. play this.
“First of all, I was very skeptical of this game because I thought it was a Ponzi scheme,” said Lumabi (26 years old) who started playing Axie Infinity in June 2021 after losing his job at an advertising agency and failed to sell online, said.
The Ponzi scheme is a model in which the money of the latter is paid to the first. Participants will be attracted by the huge amount promised and seek to invite others. The money they invest, will actually be used to pay the forerunners and leaders, disguised in the name of “profit”.
About 35% of Axie Infinity’s traffic comes from the Philippines, where high English proficiency, a strong gaming culture and widespread smartphone use have fueled the popularity of the game, according to Sky Mavis. this game title.
In Axie Infinity, players engage in battles using Axie (game character). After each battle, the player will be rewarded with “Smooth Love Potion” (SLP) – a currency circulated in the game. With the money received, players can exchange for crypto, cash or invest back into the virtual world of Lunacia in Axie Infinity.
Dominic Lumabi usually spends two hours a day monetizing Axie Infinity. On average, he earns PHP 8,000 – 10,000 per month ($155-195), almost half of what he made at his previous job as a content moderator.
“The pandemic is a key factor in helping Axie Infinity attract so many players,” said Leah Callon-Butler, a blockchain consultant in the Philippines.
Users have to spend money to buy Axie
However, to be able to start playing this game, players are required to buy 3 Axies. Axies can then be traded with other players, and players can raise them to create new Axies. If at the time of the new game, the cheapest Axie was 37 USD, but now to buy an Axie, players need to spend hundreds of dollars.
However, as players spend more, they will get better Axies, and this will give them more chances to win battles for SLP.
For veteran players, they form groups and give “scholarships” to new players. Owners of Axies can receive up to 30% from this form.
“Scholarship” is the term used to refer to the act of giving an Axie back to a player who is unable to enter the game because of insufficient funds. After that, players will use Axie in battles, and when they make a profit, they will have to share a portion of the profit with the owner.
“We lend our assets to new players to generate income for themselves, and we want a 10% return,” says Luis Buenaventura, an owner of a group called “Yield Guild Games” in the Philippines. profit from them”. Yield Guild Games has awarded 8,000 “scholars” to players, and there are 60,000 other players waiting to receive this “scholarship”. For people in their 20s and earning less than $400 a month, Mr. Buenaventura says this has changed their lives.
A model that is prone to collapse?
As the number of daily users grows strongly in 2021, the price of Axie and the SLP coin will also start to increase sharply, and this raises many questions about the sustainability of the game.
Sky Mavis made $1.2 billion in revenue from producing Axie and charging in the marketplace, and they attracted the “shark” Mark Cuban. However, some analysts say that this business model is not sustainable, because players have to constantly put money in.
Jonathan Teplitsky, a blockchain expert at Horizen Labs, warned that money-making games are a model that is prone to collapse as they emerge from hype and speculation. “If Axie Infinity wants to win the next market crash, they have to build a world that doesn’t depend on the mood of the market,” he said. However, Mr. Nguyen Thanh Trung, co-founder and CEO of Sky Mavis said: “There is more value that players receive than money.”, and he pointed out that Axie Infinity is not a game. zero sum.
A “zero-sum game” is a term in game theory where what one person gains is equal to what another loses, so that the net change in wealth or gain is zero.
Users are not affected by fluctuations in the in-game economy
The economy of this game has seen some volatility over the past few months. In 2021, when Axie Infinity announced an update that made it easier and more efficient for players to trade, the value of SLP coins increased by 900% from 3.5 cents to 36.5 cents in less than 1 week. However, by the end of January 2022, the price of this coin fell below 1 cent and has recovered to about 3 cents, but this figure is far from what it was in 2021.
“People are starting to understand that money doesn’t just fall from the sky, to make money they need to really understand how the game works,” Buenaventura said.
Meanwhile in Manila, Mr. Lumabi’s monthly income has more than halved, but he is unaffected by this. “As long as I can get between 100 PHP and 1,000 PHP a month, I think it’s still a profitable investment,” he said.
Summary from The Japan Times newspaper
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