If I told you that you could make US $600,000 by selling a virtual gaming character, you would have a difficult time believing me. But this actually happened in November 2020 when “Triple Mystic Axie” – a character in Axie Infinity was sold for 300 Ethereums or US$ 600,000.
Welcome to the second edition of the Fin-Sulat. Let’s dive into the world of Crypto .
The Token character
Gamers of the popular blockchain-based gaming company – Axie Infinity, buy and build an army of ‘cute’ virtual characters for battle against each other. However, starting up in Axie-land is not easy or cheap.
You can only play if you purchase three Axie NFT tokens needed to create the first army and this is a significant startup cost. However, once you start playing, your Axie army can yield tangible rewards in crypto tokens. And this is where things get interesting.
A few smart cookies realised that the crypto experts who lack the funds can be employed by those who have the funds to participate in Web3 platforms like Axie Infinity. The employees then get paid in tokens, which could be used to either grow their virtual clout by amassing NFTs or cash out by exchanging these tokens for crypto.
There’s a crack in this glass-castle
Sounds like a swell plan so far, doesn’t it? Unfortunately, this castle of dreams was built on a shaky foundation. As soon as the world’s crypto-economy entered the turbulent zone, we saw the token economy take a nose-dive with it.
With the value of tokens falling, Axie Inifinity’s value also fell almost overnight. Players had nowhere to go with their tokens and cryptos at less than half their value. Suddenly, one of the biggest gaming crypto companies saw a crash of larger than 40%.
But why did this happen?
As gaming remains the primary use of cryptos and tokens, they don’t really have any real value except for their use within companies like Axie infinity. This is also the reason for the volatility of the crypto as the uses of crypto are rather limited, it is heavily dependent on the few applications. It’s balancing an egg with the help of another egg – neither of the two is stable enough to provide support to the other.
Looking for that silver lining
The question begs to be asked; on one hand, there are many small businesses that need funds. On the other hand, there are a bunch of folks sitting on piles of money with not many places to put them in. Can the two worlds not come together?
Maybe they can.
BSP can consider the liquidity of crypto and allow for more real-world applications of crypto like lending, trade finance, and cross-border remittances. With a few regulations, the already progressive BSP could use this rather creative way to revitalise its lending space.
Alternatively, like many other central banks, the BSP can also launch its own stablecoin that doesn’t affect the conventional economy to mitigate the volatility of the crypto economy.
Let’s make crypto a force of good instead of just a cute virtual character.
What do you think? You can let me know your thoughts and comments by writing to me at jerome.ocampotan@idfy.net
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He said, she said
