Introduction
As one of the moderators of the fastest-growing Facebook Splinterlands group in the Philippines, I have been noticing a lot of gamers selling their cards, dark energy crystals (DEC), and even Splinterlands Shards (SPS) within the group. Some sellers are legitimate while I have observed that there are more sellers who seem to be scammers because their profiles are locked and some have even names using unrecognizable Chinese, Korean, Japanese, Greek, and Arabic alphabets.
This prompted our main moderator, @jacksonizer, to impose strict rules regarding the sale of the above-mentioned Splinterlands assets. Among these rules include that the seller should use a real account, account settings in public so that everyone can view the account, and lastly the account should not be a new account because scammers can easily create fake identities. I commend the action of our main moderator because he wanted to protect the members of the community from getting scammed because he saw posts of several members complaining that they have been scammed by so and so.
I think this strict group policy against scammers is one of the reasons why our group has grown exponentially. Currently, our membership is at now 8,100 strong from as low as 50 members the first week of August.
Going back to peer-to-peer trading of Splinterlands assets, about two weeks ago, I created a Facebook poll which was posted in our FB Splinterlands Group. I was intrigued by this phenomenon because why would players risk getting scammed when trading peer-to-peer when they can buy these assets in the in-game and secondary markets. So I asked our members the reasons why they engage in peer-to-peer trading?
The questions and responses are in Filipino but I will translate them.
Question: Why do you prefer to trade your Splinterlands Assets peer-to-peer (Black Market, using Gcash and other Modes of Payment)
Responses:
Gcash (an online payment system) is faster and easy to use - 44 votes
There's a discount if transactions are through peer-to-peer - 10 votes
There is an additional cost of gas when converted DEC in Metamask - 5 votes
I do not know how to use Metamask or other crypto wallets - 3 votes
I can scam if the transaction is done via peer-to-peer - 1 vote
This poll is not scientific and cannot be generalized but it sheds light on why Pinoy gamers are resorting to black market the sale of these NFTs and virtual currencies.
Interestingly, these peer-to-peer transactions have created other economic activities in the Splinterlands community in the Philippines, and these activities, I have observed, are not limited to our FB group. These are described as follows:
Piloting Service
Expert gamers advertise their skills and promise to level up the rank of the one availing the service for a fee. There is no standard rate here, I am just sharing one post where the gamer posts his rates and the rates even have tiers; the higher the rank level, the higher the commission he charges. So enterprising! Service is paid in Peso but some also charge in DEC.
Sharing your game account is quite risky because you will have to share your password.
Vouching
Vouching is the process of making a public statement that a certain seller or buyer is trustworthy. Because sellers and buyers are anonymous, transacting parties often ask for proof that they are not scammers. Often, sellers and buyers keep a screenshot of their past transactions as proof. Sometimes buyers ask another member of the group to vouch for the legitimacy of a certain seller in a post. Legitimate sellers can rely upon that there will be someone who will vouch for them. In this picture that I have attached, the buyer even asked for the passport of the seller and asked someone to vouch for the seller.
However, vouching does not automatically solve the problem of scams. It is easy to conspire with another user and dupe the buyer. Hence, be careful still even if someone vouches for another person.
Middlemen
The middlemen act as third-party who will ensure that payment will be paid and the product will be delivered to proper parties for a small fee. This phenomenon is kinda contrary to the principle of blockchain which is trustless and permissionless. It is one of the unexpected consequences but we cannot blame people for engaging in such activity because the game is decentralized and people are free to do what they want regarding the Splinterland assets.
Middlemen are usually respected members of the group like the admins and moderators. Some players who have Youtube channels with a large subscriber base sometimes offer themselves as middlemen.
Splinterlands Scholar
Even though the price of Splinterlands spellbook is cheap. There are some players who cannot afford the game. I saw a post before that a community member is looking for someone to sponsor him/her to buy a spellbook. I sent this person a private message telling him/her that I will buy the spellbook but he/she has to pay it and pay a daily DEC interest until he/she has fully paid the spellbook. I even gave him/her the idea that he/she can pay using Bitcoin Cash which he/she can earn from posting quality content in Noise.cash.
Insights
The growth of peer-to-peer trading and black market outside of the in-game market poses a question in my mind if this is ever allowed under the Terms of Condition of the game.
The loss of profit in terms of the market fee is interesting to explore but since this is a peer-to-peer transaction it is really difficult to quantify the loss of Splinterlands. Another interesting thing is the cost of scams, I heard a lot of people have been scammed in the black market but the cost has not been computed. Finally, this play-to-earn blockchain game has spurred various and unintended economic activities whose long-term impact on the economic aspect of the game cannot yet be measure.
It would be interesting to see if such activities will continue in the future even during bear markets.
Disclaimer
This is to inform the reader that I was not paid to write this article and I have no employment relationship with the game developers.
