Do NFT games inspire capitalism?
NFT Games

Do NFT games inspire capitalism?

The general consensus is that video NFT games designed to be played for money are about power fantasies: kill enough dragons to level up to 99, sell enough wolf skins to buy a showy gold cape, and become rich, strong, or successful in the game’s world—even if you aren’t in real life. Catdicax, a 30-year-old lady from Finland, thought of Runescape as a place where she could work hard and put out effort to get more in-game items. She had amassed a collection of pricey artifacts over the course of 10 years of playing NFT games that she could earn money for.

On the other hand, Catdicax finally started to feel restless. Working so hard to get Runescape’s virtual axes or cloaks looked pointless and like a grind. In 2019, Catdicax came upon axie infinity, a blockchain-based video game where players acquire and level up collectible virtual animals called Axies. NFTs that stand in for the players’ Axies battle to win cryptocurrency tokens that may be used to breed more animals.

The NFT games industry is about economics, not the typical play that generates gaming enthusiasm. Rarer Axies fetch astronomical premiums, similar to holographic Charizards on steroids: 2020 saw the purchase of the rights to a stocky, wingless angel called Axie for $130,000 in bitcoin. Smooth Love Potion, or SLP, tokens earned by winning Axie-fights may be exchanged for cryptocurrencies on online marketplaces before being turned into actual money.

Catdicax describes herself as having lived in poverty all of her life.

(Catdicax uses her screen name because she worries about sexist trolling and fears being “targeted” because of her riches.) She is currently observing as the price of each of her digital Axies rises from a few dollars to as much as $500. Catdicax stopped being a spectator. She had a few properties. And she understood that many potential play to earn game players who couldn’t afford to buy their own Axies would rush at the opportunity to profit off hers when Axie Infinity became popular in late 2020.

Catdicax started hiring people she met online, the bulk of whom were based in the Philippines, to help her with her video game grind. As part of an Axie loan scheme, or a scholarship in Axie lingo, these players may get a share of her earnings. Catdicax was engulfed by a fresh power fantasy from a video game: that of being a manager.

“Wow, this is great, I thought. People in the Philippines are making twice as much playing this game as they would in a typical job “She clarifies. “The same goal also applies to me. I also wanted to help other people.” (In actuality, a study by analytics company Naavik found that the bulk of gamers made little more than the $7.03 daily minimum wage or less, with only the most proficient players making more than the Philippines’ average daily salary of $41.49). And that’s before the costs of the scholarship managers are subtracted.)

The phrase ” NFT games” has become popular in the bitcoin world. The term describes a rising category of widely played NFT games that employ blockchain technology to reward players with virtual goods that have real-world, or at the very least, virtual currency value. Uplands, splinterlands, and Alien Worlds are also featured. The most famous of the three is Axie Infinity, which was created by Sky Mavis, a Vietnamese woman.

The sector is expanding: Gamers spent more than $2.32 billion on blockchain-based exclusive gaming items in the third quarter of 2021, according DappRadar, a cryptocurrency analytics company. The recipients of venture capital grants from Andreessen Horowitz have made significant investments in start-ups in the industry, including leading a $152 million investment round in Sky Mavis in October. And probably most importantly, thousands of individuals play simultaneously: As of August 2021, it has 1.8 million daily users, according to Axie Infinity.

When Axie Infinity launched in 2018, the sole element related to cryptocurrencies was the link between Axies and NFTs, which are unique money units that may be created on the Ethereum blockchain. Later, in late 2019, Sky Mavis published the SLP tokens and decided against peddling them to users in favor of letting players collect them in-game. 

Do NFT games inspire capitalism?

Aleksander Leonard Larsen, cofounder and chief operating officer of Sky Mavis, asserts that his company is trying to change the way people make money by playing NFT games online. In reference to NFT games with business models centered on players acquiring exclusive products or features, Larsen continues, “Other NFT games businesses are continuously attempting to extract as much money as possible from players.” He contends that NFT games like Axie Infinity and others reward skilled players with worthwhile virtual items.

Even better, these resources are kept in the player’s bitcoin wallet rather than merely existing as numbers on an MMORPG server. An NFT is required to own an Axie; SLPs and Axie Infinity’s other currency, AXS, are ERC20 tokens. Sky Mavis has also been progressively implementing a monetary policy that seems to be meant to avoid token excess, almost like a private central banker. The company has tightened restrictions on users who establish several accounts, reduced the number of tokens accessible in non-fight mode, and made it more difficult to accumulate tokens overall.

Analysts talk about “Axie overpopulation” causing inflation in a non-ironic manner. (It turns out that the little bastards’ immortality is the main problem.) Axie Infinity tokens may be traded for ether on Katana, an automated cryptocurrency market maker, which Sky Mavis revealed in November. This creates a low-cost, direct connection between the game and the developing field of cryptocurrency-fueled decentralized finance, or DeFi.

For us, providing DeFi services “was an obvious evolution,” says Larsen. DeFi will unavoidably result if you have a wallet that stores both your digital belongings and anything that can be stored using fungible assets. DappRadar reports that Katana quickly rose to the top of the list of DeFi apps in terms of user traffic.

Few people would suggest the gameplay of Axie Infinity when asked what keeps players coming back. In a May survey of his Twitter followers, Sky Mavis inventor Jeff Zirlin found that 48% of them were most excited about “the economy.” And Axie Infinity’s economy, like any other economy, has a bustling labor market.