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Cryptocurrency News Articles
The Hamster Kombat Airdrop Saddened Thousands of Users, but This Scenario Is Not New
Oct 02, 2024 at 01:27 am
The emergence of web3 games has generated massive interest in earning cryptocurrency through fairly simple actions. Play-to-earn (P2E) games became a new type where users can earn cryptocurrency and NFTs through activities.
People have always dreamed of getting rich quick by playing games, exercising, or tapping a screen, but these schemes often end in disappointment.
The Hamster Kombat airdrop left thousands, if not millions, of users feeling cheated. However, this scenario is not new in the crypto community. Several mechanics that supposedly allow users to earn money for simple actions have risen and fallen rapidly. What lessons can we learn from these experiences?
The emergence of web3 games sparked massive interest in earning cryptocurrency through simple actions. Play-to-earn (P2E) games became a new genre where users could earn cryptocurrency and NFTs by performing activities within the game.
Axie Infinity was a pioneer in this space. To start the game, users needed initial capital to purchase Axie, a virtual NFT pet. By completing tasks, engaging in battles with other players, and advancing through levels in the game, users could earn tokens. These tokens could then be exchanged for other digital or fiat currencies, while items could be sold on crypto exchanges and NFT marketplaces.
And being a pioneer, the game was—no joke—considered an option for real earnings for a long time. It became especially popular in the Philippines. In 2020, as the world grappled with a pandemic, borders closed, and people lost their jobs, enterprising Filipino crypto enthusiasts began forming guilds, offering ordinary users the chance to earn money on P2E games.
However, Axie Infinity was plagued by in-game inflation. As a result of its constant growth, the price of its utility token, Smooth Love Potion (SLP), began to decline. To maintain high demand for SLP and AXS (the governance token), an infinite number of new registrations, including players who have neither one nor the other, are needed.
If the number of monthly active users (MAU) was more than 2.7 million at the peak, then in July 2024, this number was just over 310,000. The decline in Axie Infinity indicators occurred during the correction period of the entire digital asset market after Bitcoin (BTC) reached its previous all-time high (ATH) on Nov. 10, 2021.
The large-scale hacking of the game in March 2022 played an essential role in its decline in popularity. The outflow and lack of new users led to the fact that existing users could no longer earn money. The stories of some platform users turned out to be even sadder. In an attempt to make money on investments in the game, some players got into debt. They failed to make money on the project.
With the P2E games era fading, a new type of earnings with the move-to-earn mechanics entered the web3 arena. The most famous example of such a game is STEPN.
However, its profitability fell significantly due to an influx of users, and some experts found signs of a financial pyramid in the STEPN mechanics themselves.
At the same time, suspicions about the project do not change the fact that the platform’s early players actually managed to make good money. Users could recoup their investments, while the losses significantly exceeded the earnings for those who joined at the hype stage.
Why did a game aimed at instilling healthy habits fail? The cost maintenance mechanisms laid down by the project’s team did not justify themselves. STEPN was ruined by its popularity: instead of using in-game tokens, Green Satoshi Token (GST), users actively converted them to tradable tokens, Green Metaverse Token (GMT), in the hope of further growth, especially after the rally in the spring of 2022, when the token reached an ATH of $4.11.
According to Dune, the project also had a significant decrease in MAU — in May 2022, this figure was more than 705,000, then in September 2024, it was already less than 19,000.
The project’s creators on the official website state that the play-to-earn format can be seen as an element of a Ponzi scheme, but STEPN has nothing in common with it. According to them, the developers have built strong tokenomics into the platform, ensuring the project’s coin value stability.
However, in essence, STEPN had no real economy and lived off the money of new users who bought virtual objects for thousands of dollars in the hope of getting their investment back in a couple of months while doing imaginary, useless work.
To maintain the necessary audience activity, a steady influx of new players who would buy game currency and NFT artifacts from old players is required. With a massive influx of new participants, such projects are possible. However, the principle of profit distribution in do-to-earn
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- NEIRO Makes a Grand Entrance into the Top 100 Cryptos as Whales Accumulate, A Possible 50% Surge Beckons
- Oct 13, 2024 at 11:05 am
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- Memes Lab: A New Meme-Themed Telegram Game That Uses the Tried and Tested Recipe Popularized by Hamster Kombat and Other Tap-to-Earn Apps
- Oct 13, 2024 at 11:00 am
- By collecting coins in the Meme Labs app, players become eligible for a token airdrop, which means that the in-game rewards will be transferable to real-world value.