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Crypto’s hottest game is facing an economic maelstrom

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Re: Crypto’s hottest game is facing an economic maelstrom

#81
post #36

Earlier quoted context omitted.

"Providing value" is doing some serious heavy lifting in that sentence - MLM/Ponzi schemes can definitely argue they "provide value" and its telling that its your metric for not being a con. In a traditional ponzi scheme many people get paid, until the last people are left holding the bag.

As a video game maker myself I'd say that video games generally provide value. If this particular video game provides as much value as its valued at is not for me to decide, but for the people who play it and invest in it.

What if the only value is speculation or rent seeking on people that are poor? It’s already the case that the pay to earn economy crashed deeply. You keep saying value but without saying what that value actually is. Until a Ponzi scheme crashes everyone in it thinks it’s providing value after all.

As a videogame maker myself I’d rather give my games away for free than setup the kind of economic trap Axie has.

Re: Crypto’s hottest game is facing an economic maelstrom

#82
post #75

Earlier quoted context omitted.

> HN is very dismissive on these topics. In general, when ever crypto topics come up, the pro-crypto side tends to do a pretty terrible job of establishing that there are "some pretty incredible innovations occurring in crypto, gaming, and defi." Perhaps you could list some and change our minds? I just saw on Twitter how some one is minting NFTs using the art of a deceased artist and their family is scrambling to fig…

I'm not involved in nor have I ever bought anything crypto related. But I'll say this for it, it's the most interesting new tech to hit the internet in the past couple decades. Everything else has been pretty incremental over that time period, crypto is something really new and I suspect that's why its adherents are so obsessed by it.

VR was pretty hyped a few years ago.

Edit: Also, what exciting things are you seeing? Almost everything I see is either proposing smart contracts for intractable problems, proposing defi for intractable problems or is a straight up scam.

Re: Crypto’s hottest game is facing an economic maelstrom

#83
post #4

I've been playing with https://euphoria.money which is a 'fork' of OHM on the Harmony block chain. It brings back memories of high-yield investment programs (HYIP), which are a type of Ponzi scheme. I don't want to accuse them of anything, but it's a little "if it's feels too good to be true, then it probably is" So much of the DeFI yield farming comes across somewhere between Ponzi scheme and the insanity that prece…

I invested some token money on OHM to learn more about it. The APY figures will come down in 1-2 months based on certain funding/staking levels. I stayed away from all forks of OHM.

Lot of interesting projects happening in DeFI 2.0 and DAO space. One example: https://www.klimadao.finance/

Re: Crypto’s hottest game is facing an economic maelstrom

#84

Earlier quoted context omitted.

There is no “success of the company that you can share in”. This is a zero sum game: as long as more people buy tokens to get in the game, then it continue going up, and every one feels like they are getting richer. But anyone selling their tokens is taking money out of the system, from all the players. If everyone sell their tokens, there will be exactly the same amount of money that comes out than that went in, jus…

Investors also buy tokens because they think it will go up, not only people playing the game. Yes, people will lose if it goes down, but that's what it's like with everything. Some players will win, some players will lose, some investors will win, some investors will lose. There is absolutely nothing wrong with this. This is how the world works. If people think the project has value then it will go up in value and if…

Because that's actually not how the world works.

With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade.

If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient.

Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think.

Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors.

Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value.

Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out.

All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.

Re: Crypto’s hottest game is facing an economic maelstrom

#85
post #51

I'm heavily invested into axie (5 figures), happy to answer any questions.

Did you pay the $1,000 entry fee yourself or did you get a “scholarship” like the article mentions? How does one invest more than the $1,000 entry fee? Do you sponsor “scholarships”? How long ago did you start playing and how much time have you put into the game? What return (if any) have you made on your time/monetary investment? What return (if any) do you expect to make and over what horizon?

Thanks for agreeing to answer questions! I’m very intrigued!

Re: Crypto’s hottest game is facing an economic maelstrom

#86

Look at how addicting Candy Crush, Clash of Clans, Genshin Impact, etc. are. Now imagine games like these but you have the ability to win real money. Or imagine a digital casino, because that's basically what this game is. I'm surprised these games aren't more popular. Maybe because if they truly become mainstream, they're basically guaranteed to be shut down or heavily regulated. Either that or millions of people wi…

> Or imagine a digital casino

I find pretty much every casino game beyond incredibly boring. The only appeal seems to be greed-- if you take that away (or decide you don't value it), they lose all luster for me. I know this opinion isn't universal - some people will play simulations of those games for hours with no real money on the line - but I can't be the only one. There are so many much more enjoyable games out there that cost a lot less (or nothing) to play.

I've thought for a very long time that if they ever manage to come up with casino games that are actually fun for more people to play for long periods, it would be a catastrophe for gambling addiction. All the same, I can't help being curious what it would look like. I'm honestly amazed it hasn't happened yet; you have to wonder whether there's some kind of hard barrier holding it back. How anyone can sit so long in front of a machine which consists of nothing but pushing a single button completely befuddles me.

Re: Crypto’s hottest game is facing an economic maelstrom

#87
post #39
post #30

Earlier quoted context omitted.

This is impossible because the money has to come from somewhere. The 1% aren't going to pay people to play games.

Organized sports disagrees.

Very, very, very few people can do full-time sports. You never hear of companies changing their compensation because prospective employees are going into sports instead.

Re: Crypto’s hottest game is facing an economic maelstrom

#88

Earlier quoted context omitted.

It seems like we are really going fast towards game regulation based on what I saw. Gambling with real fake money for teens in a game designed to be basically a pokemon clone with all ways to keep users engaged? It may not be a ponzi scheme, but if it keeps growing, we will hear about it as a new panic in US.

I’ve been seeing a lot of ads recently for mobile games with cash or crypto payouts.

This is going to be super interesting in terms of regulation. For example how Second Life is set up to cash out. How many of these companies are actually compliant?

Re: Crypto’s hottest game is facing an economic maelstrom

#89
post #14
post #4

I've been playing with https://euphoria.money which is a 'fork' of OHM on the Harmony block chain. It brings back memories of high-yield investment programs (HYIP), which are a type of Ponzi scheme. I don't want to accuse them of anything, but it's a little "if it's feels too good to be true, then it probably is" So much of the DeFI yield farming comes across somewhere between Ponzi scheme and the insanity that prece…

Just looking at that home page, they are saying the APY is 725,002.4%. If that isn't an insane red flag, I don't know what is.

That APY is misleading in several ways. It implies that if you put $100 in it will be 7250x bigger in a year. But this assumes that the price won't change, i.e. you get one token for $100 now and in a year you can exchange 1 token for $100.

In reality this seems unlikely, given that Eurphoria($WAGMI) are giving out 0.81% per 8 hours 12% per 5 days, and doubling the amount of tokens in 30 days. So in 30 days I should be able to get $200 back out, and in 1 year I should be able to get out ~$725000. 2 years and I can take out over 3 billion. Yeah okay.

It's more complex than that with bonded DAI, etc, so there is some fractional reserve of capital (at the moment it looks like 10%).

The other thing with this and all these APY numbers (yield farming, incl) is that they imply that the numbers will stay the same. I.e. will hold for a whole year. In watching uniswap/sushiswap/etc this is not even remotely accurate. Those numbers (even 200%) are fleeting, they last for a day or a week. It's not stable and therefore those numbers are meaningless.

If you're small, even being a liquidity providers on a more stable pair which return ~20-30% (i.e. a possible number) don't stack up once you include Ethereum fees. It takes quite a bit of time to earn back all the fees you spent setting it up (unless you have lots of capital)

For comparison, OHM $100 now should be $4000 after one year or $300,000 after two years.

Re: Crypto’s hottest game is facing an economic maelstrom

#90
post #15

I wonder if, in the future, a significant portion of the population will have a full time job playing one of these crypto games. They'll be paid based on their in-game social achievements, which will include things like "cares for the (virtual) environment", "demonstrates commitment to diversity", "encourages others to follow health mandates", "uses de-escalation techniques in conflicts." New mission types and achiev…

This is basically like saying if everyone had the ability to print their own USD, people wouldn’t need traditional jobs anymore.

The intrinsic value of cryptocurrency is basically zero. Even the scarcity factor doesn’t have much weight because it’s trivial to just create a new currency and “print” more. Unless the US government or some other government backs a coin, that’s just how it is.

So a “job” where people mine coins all day is producing absolutely nothing of value. If someone is making money in that situation, that means someone else is being scammed somehow.

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