NFT games are a mix of day trading and precarious work, experts say

Amid the popularization of NFTs, games that use cryptocurrencies in their virtual economies are increasingly common. Play-to-earn games attract attention for the promise of easy money, but they end up resembling a kind of low-paying job, according to experts.

To join many of these games, the user has to deal with an initial barrier which is having a digital wallet and buying an NFT. The difference is that cryptoassets will not be waiting for a buyer on OpenSea, a platform dedicated to the non-fungible token market.

Digital authenticity certificates, within the so-called NFT games, or cryptogames, have a practical function. They represent characters, equipment, or abilities that allow the user to actually play the game.

But while in conventional games the player is rewarded with virtual coins that are only useful in the ecosystem they came from, in play-to-earn games what the user receives when performing certain activities is a token.

The term is used to refer to assets that operate on a blockchain, such as bitcoin and ethereum. The difference between a token and a common gaming virtual currency is that it can be converted into conventional currencies, such as the real and the dollar, following a daily rate.

This means that rewards that were previously intended only for customization and enhancements, as in popular games like League of Legends and World of Warcraft, also serve as assets in the cryptocurrency market.

In the case of Axie Infinity, an NFT game that has 2.8 million daily active players, the token is the SLP (Smooth Love Potion), whose price peaked in mid-2021. According to the official website, the original game Vietnamese has generated US$ 3.6 billion (R$ 18.5 billion) since its launch.

Axie Infinity’s gameplay consists of using the initially purchased NFTs — now represented by cute pets with their own attributes — for turn-based battles against the computer or other players, as in the Pokémon franchise.

It is by winning these fights and completing optional daily challenges that the player obtains SLPs, which can not only be used to improve the Axies team and facilitate future battles, but also be converted into reais.

But who pays the user with tokens is not SkyMavis, a developer based in Saigon, capital of Vietnam. As in apps like Uber, the game works as an intermediary platform between its users and the market, with its fees and rules. The market, in the case of Axie Infinity, is crypto-assets.

NFT game economies are often designed by experts to make sense. It is on the basis of this trust, also supported by the cryptography of blockchains, that the SLP has value, as does bitcoin itself.

“What this dimension of blockchain and cryptocurrency does is to support these virtual economies, with investors guaranteeing the structure, functioning and balance of that context”, explains Thiago Falcão, professor of Digital Media at UFPB (Federal University of Paraíba). ).

While the promise of earning extra income by playing on mobile or desktop attracts users of varied profiles, from teenagers to financial experts, tokens are highly volatile assets that need to be liquidated in the market. It is as if, instead of a worker receiving his salary in reais, he received it in shares.

“The most appropriate consumption of these games requires the player to enter the culture of cryptocurrencies, to understand fluctuating prices, buying and selling. It is an introduction to day trading, to the stock market”, says Falcão. “You can play in an unsuspecting way, but you won’t get anywhere.”

The initial cost barrier of play-to-earn games gave rise to work-like relationships. In “scholarships” (or “escolinhas”, as they are called in Brazil), account owners informally recruit users to play for them and, thus, divide the winnings, whose percentage varies from 30% to 50%.

Entrepreneur Jean Maia met Axie Infinity in November 2021 through Instagram profiles dedicated to finance and cryptocurrencies. He started playing after getting a place in a little school, without having to invest out of his own pocket.

“We used to earn between US$ 150 (R$ 770) and US$ 200 (R$ 1,000) a month, but when I stopped, in January, we were earning US$ 30 (R$ 154)”, says he, who spent two hours a day in the game.

“Today I have two NFTs, one worth US$ 120 (R$ 616) and another one worth US$ 150, stopped, trying to sell, because of the low game”, he laments.

Heloísa Passos, CEO of Sp4ce, a Brazilian company specializing in cryptogames, estimates that around 80,000 Brazilians were playing Axie Infinity at the end of 2021.

In his opinion, the success of the game is due to its structure, which should be the rule in an environment in which few can sustain themselves in the long term, and where interested parties are subject to attempted coups.

According to the UFPB professor, NFT games have more to do with precarious work than with video games, because people feel forced to spend as much time on their devices as possible in search of a profit that may not come.

“It’s not a fun thing. They’re not mechanisms created for entertainment, but gamified work structures. In NFT games, there’s very little left of what makes a game, a game. The pleasure, the subjective and social experience of playing, none of that exists. in these cryptogames”, he says.

Psychology student Vanessa de Barros was not as lucky as Jean. After spending a few weeks playing at an Axie Infinity school, where she earned R$70 a week, she borrowed R$5,000 from a friend to invest in a personal account.

Vanessa used the money to buy the starting NFTs and build a team of Axies with the confidence that they would have a quick payback. But, with the devaluation of the SLP and the dollar in recent months, the account is now worth R$ 2,000, with cryptoassets that it would only be able to settle by lowering the price even further.

“I know I won’t enter another [jogo NFT]. I’m waiting for the SLP to go up to try to recoup at least what I’ve invested, and I don’t think it’s worth the stress,” she said. “I’d rather pay to play than play to receive.”

For Passos, the main reason for the devaluation of the SLP in recent months was the excess supply and lack of consumption in the game’s ecosystem, a fault of the developer itself. This means that more SLPs ended up in users’ wallets than were held back in the game.

She believes that players who intend to take a risk in any of the cryptogames should be aware of a series of red alerts, such as promises of high return on investment (ROI), the lack of public documentation about the project (whitepaper) and dependency from the entry of new players to the appreciation of the tokens.

“It is important that people, before entering this market, understand well how it works, so that they can better invest their money. Before entering the game, a research must be done”, he said.