‘House of cards’: Fears of scam surge as Axie Infinity craze explodes in Philippines?

As the Axie Infinity mania has spread in the Philippines, there has been a significant increase in fraud concerns.

Detractors warn that the game is a “house of cards,” with some comparing it to a fraud scheme fueled by anticipation and conjecture.

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The NFT-based online video game developed by Vietnamese company Sky Mavis is well-known for its in-game economy, which is built on Ethereum-based currency.

Axie Infinity, which operates on the P2E (play to earn) financial model, has emerged as the greatest winner in the world of blockchain games in recent months. According to Sky Mavis, approximately 35% of Axie Infinity traffic, as well as the largest proportion of its 2.5 million daily active users, originates in the Philippines, where a high level of English proficiency, a strong gaming culture, and widespread smartphone use have all contributed to the site’s popularity.

In Axie Infinity, players engage in battles with colorful blob-like Axies, and are primarily rewarded with “Smooth Love Potion” (SLPs), which may be traded for cryptocurrency or cash, or reinvested into the game’s virtual realm Lunacia.
It is a non-fungible token (NFT), which means that it is unique and has a specific set of skills and features. They are recorded on the blockchain, which is a digital ledger that cannot be altered. Axies can be purchased, sold, or rented to other players. Owners can also breed them in order to produce young Axies that are more valuable. At the height of the game’s popularity last year, a beginner squad of Axies might cost hundreds of dollars, making it out of reach for many ambitious players in developing nations. The cheapest Axies cost $37 each, bringing the total cost of a basic squad to $111.

Players who spend more money, on the other hand, receive better Axies, giving them a higher chance of winning battles and earning SLPs and, in some cases, the game’s second crypto asset, AXS. Guilds and “scholarships,” which are profit-sharing arrangements in which participants are charged a percentage of their revenue, have been established by those with the financial means to field more profitable Axie teams. According to reports, the owners’ cut might be as high as 30%. Its supporters and inventors hail it as a watershed moment in the growth of the internet. As the number of daily active players increased in 2021, the price of Axies and SLPs increased as well, creating concerns about the game’s long-term viability.

When Axie Infinity revealed that it will migrate the primary network from Ethereum to its own sidechain dubbed Ronin, the market reacted negatively. The transfer of its primary network would result in the team having complete control over the data in the chain, resulting in the entire system being increasingly centralised, which would be contrary to the decentralised nature of the blockchain. Sky Mavis generates income from the game mostly through breeding and marketplace fees, while Axie Infinity has produced more than $1.2 billion in revenue to far. It has also gained the support of wealthy investors, notably US billionaire Mark Cuban. However, some gaming industry observers believe the company’s economic model is unsustainable, citing the necessity for fresh players to keep money flowing in.Axie Infinity is a fictional character created by Axie Infinity. That is a Ponzi scheme in the throes of collapse.

They’re down 90 percent and in a screaming plummet, while their Axie token is down 37 percent from its high. That one is likely to have a negative impact on a lot of impoverished people in the Philippines. Many people abandoned their jobs to participate in Axie’s play-to-earn game. Because all of the money comes from subsequent participants, it is a Ponzi scheme by definition. The NFT market is in worse health than it appears. People are creating rubbish art at an alarming rate, and they are buying it at inflated rates in the hopes of selling it to a larger idiot. If you look at genuine resales on OpenSea, you’ll notice that they’re not happening very often. The stock of bigger idiots is running low. As I’ve previously stated, this operates in the same manner as selling Beanie Babies on eBay.

The asking prices are approximately US $5,000, the actual sales are under $50, and the majority of the products have zero bids. NFT markets do not have a visible crash; rather, they merely stall. The majority of NFT marketplaces do not publish statistics that reveal this. Around the year 2018, not knowing what’s going on in popular culture went from making you appear lame at parties to providing you with protection from pyramid scams. The Securities and Exchange Commission (SEC) cracked down hard on initial coin offerings (ICOs) in 2018. First and foremost, they were successful in having a few outright frauds convicted, such as the one in which a person claimed to hold gold and real estate but in fact did not.

Then they just sent out letters to every initial coin offering (ICO) they could locate, asking them to “please explain why your investment offering to the US public does not need to be registered as a public offering.” A large number of initial coin offerings (ICOs) were abruptly canceled. In a pyramid, money travels up a hierarchy, but in a Ponzi scheme, money flows from new members to old participants; consequently, in reality, there is little difference between the two. The price of the Axie currency is only sustained by new purchasers (by definition), and the coins being sold are nothing more than early adopters cashing out. Any cryptocurrency that is “going to the moon” has this dynamic; coins being offered at 10,000 percent ROI are ponzi schemes, early adopters are compensated by late adopters, and the person who purchased at the top has already lost their money. Because there is also a multi-level dynamic,

I believe Axie to be both. When I was watching the gameplay clip, I was taken aback when they announced, “You can rent out your in-game goods to generate money!” People speak about power fantasies in video games, but I never imagined that it would extend to the role of a landlord. Which takes me to my second argument, which is that individuals are aware of the dangers they are incurring. Casinos are still permitted in several states. Someone who put their life savings into Smooth Love Potion was certain to lose it in some other way. If you don’t realize that your 100 percent apy isn’t sustainable in a DeFi ponzi scheme, it’s on you.

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