NFT, Play-To-Earn and Blockchain Gaming has been the hottest words and trend during 2021 and it could be like that untill the end of 2022, or it could even go further beyond even more as the world is slowly recognizing and accepting everything digitally - payment, arts, music, gaming and more.
In this article, I will discuss this very interesting topic where its trend has continuosly gaining more and more momentum over the past few months and why lots and lots of projects relating to it has failed miserably resulting to bad experiences and huge losses for most investors and players - the blockchain gaming and its Play-To-Earn experience.
Sustainability Is A Must For A Rewarding Game.
Over the past six months, during the hot trends and hype of NFT gaming, we saw hundreds, if not thousands, of new Play-To-Earn games emerged that promised exciting experience and rewards players within the game. Not just talking about a cent of rewards, but a indeed a huge amount of it.
Those short term "successful" games gave early players an enormous rewards without thinking ahead for the future outcome. And because the game was giving too much from its treasury, it has just been depleted instantly than anticipated and people who were hyped because of the said potential earnings in the game jumped into but just turned out to be jumping on the sinking boat - their money invested was just given out to pay early players and they ended up nothing in returns as the game announced its closure.
Reasons Why Games Can't Sustain For A Long Time.
There are lots of reasons why games failed miserably even though it was supposed to be a successful project, and I will mention everything as much as I can.
1. Not enough use cases for the token.
As of today, most blockchain games has dual-token system used in their game - the Governance token and the rewarding token. But back in the early months of blockchain gaming in 2021, there were only one token being used in every project that serves as the main token and the reward token in the game.
However, no matter which, this still doesn't change the fact that the project can still fail when their token(s) does not have much use cases to cover the supply and save the price from tanking when players sell their earned token in the game.
Most of the game focus on harnessing the game itself, partnerships, the quality for better game experience but didn't give enough time to study the tokenomics and possible outcome in their economy in the future. With that, games who didn't think of the potential mistakes in their economy and recklessly giving out so much to players ended up failing the project to run longer and announced its closure to their project leaving its investors and players to deal the losses and probability of getting scammed.
2. Was not ready to handle a growth in user base and its effect.
With a user base of the project growing, it could also mean a growth in transparency, growth in terms of their token's price and especially a growth of players that will potentially sell an earned token rewards.
This was one good reason why a price of the game's token could tank in just a few days, week or months. A good example of this was Axie Infinity's reward token $SLP and Cryptoblades only token $SKILL.
Back in mid 2021 where blockchain gaming was about to boom, Axie Infinity multiplied their user base many times making the price of the two token, $AXS and $SLP, to break all-time highs. However, months passed, the price of $SLP started to shrink slowly simply because players continuously selling their earned token in the game. And because there is a scholar feature, where players don't need to buy an NFT and just borrow from players and play the game, and not enough usecases for $SLP, the price keeps on going down and was breaking all-time lows by all-time lows and it will continue to be like that if no necessary actions is taken.
3. Infinite minting and selling tokens from the developers. (Bonus)
If you are one of the people who experienced different kinds of NFT games, then you should have probably realized why the price of the game's token keep on making red candles (huge selling volume) even though the game was going great. A small act of FUD (fear, uncertainty and doubt) leads to a huge selling pressure in the chart. It is not new and there is only one reason or that - developers keeps on selling the token.
For this to happen, the developers of the game needs to have the right to mint new tokens of the game or the Liquidity of the token is unlocked. This is only possible when the ownership of the contract was not renounced and the Liquidity was only locked for a short time. If this is the case, the developers can take advantage of it and make a fortune out of their investors. This is one huge reason a project can fail no matter how great and huge the community is. New people or investors might take the price of the token go up but developers can just dump it on them. Always make sure to know what you are investing with.
Original image from Cointelegraph.
Wa jud koy hanaw ani Ry. Kutob rakos BCH og Pi. Hahaha 😆