Blockchain gaming has really caught the wider public’s attention recently. It has become one of the biggest crypto trends, attracting millions of new users towards cryptocurrencies.
The most popular type of blockchain gaming is the Play-to-Earn model – a unique amalgamation of Decentralized Finance and Gaming, allowing players to have fun while earning valuable assets in the form of tokens, NFTs, or other digital rewards. These projects are specific, and the gamer’s primary goal is to earn.
However, because these games involve the concept of in-game purchases and real-world currencies (stored in wallets), they offer scope for ponzi schemes and a possible platform for fraudsters.
How do some Gamefi Ponzi schemes work, and how to avoid them?
Ponzi schemes work when old investors are paid back with new investors’ money without any value being added at all. These keep functioning with potentially never-ending investors coming in.
Many Play-to-Earn models use this “pyramid” structure to lure in players solely on the pretext of “staking money to make profit”. This, in reality, turns out to be “pay-to-play” disguised under the “play to earn” analogy.
More players are added in a certain timeframe than the already existing ones, ensuring the demand for NFTs. If the number of new users falls below the level of existing users, the same will apply to the demand for NFTs as well — and the value of the token will plummet.
Play-to-earn games that attract gamers via high investment yields are quite unsustainable on account of high distribution of tokens without burning mechanisms and strong use cases in place to control the supply, eventually causing a bad plunge in token prices.
One must be wary of such schemes wherein people are required to invest in order to make some profit. If it sounds too good to be true, it probably is.
Pocket Arena setting an example for a sustainable play-to-earn model
Pocket Arena, a free play-to-earn NFT gaming platform, has developed a sustainable economic model with a robust mechanism in order to maintain a healthy economy by the strategy of combining NFTs and esports at its core.
Players here can play the games for free and turn the XPs they earn into POC tokens, that have real-world value, stored in wallets. There’s no obligation to invest, but those who wish to, can.
Take Pocket Arena’s flagship game, Castle Defense, for instance. It works on the premise of buying the fresh NFTcastle, earning XPs, and upgrading castles. In this case, one can choose to buy a castle and hire a player to use the castle in-game, or simply apply to enhance a castle owned by someone else. This way, all parties benefit.
NFT Castles with XPs collected will eventually have more intrinsic value because these XP can not be bought by POC nor by other financial instruments. This XP collected is purely due to the efforts, skills, and time contributed by eSports players. These are priceless and can’t be bought with money.
That is the reason that this XP can be exchanged into real rewards, which can be used for NFT item purchases or can also be cashed out. However, this doesn’t work in the opposite direction where XP can be bought with POC. That is a very clear principle for Pocket Arena that we value the spirit of esports.
Implementing burning mechanisms of these XPs is also important to prevent the inflation of POC prices. In order to win the battle and Esports, you will have to upgrade your in-game items and need to pay some entry fee with XP to participate in the battle as well.
This burning mechanism is very common for the traditional gaming industry as a Pay to Play. Users are required to pay considerable money to upgrade their game items. However, in Pocket Arena, these game item upgrades can be paid with your earned XPs. The XPs make your NFT Castle truly unique and valuable. These high-priced NFT Castle can only be enhanced with the help of highly skilled esports players. If your player has no skills, then he/she will just end up wasting your XP by upgrading wrong items and using them in non-strategic ways.
Eventually, Pocket Arena will pursue the mechanism that true and high-skilled Esports players will enjoy the biggest benefits. Also, those who have no skills can also share the benefits by hiring these pro-players.
From an end-user’s perspective, one gets to experience high-quality entertainment with eSports features (Castle Arena’s PvP battle and eSports mode within PA casual games), and get rewarded with POC tokens.
Moreover, we are fully committed to ensuring that the platform is safe, secure and fair for gamers by conducting regular audits of players’ wPOC in order to detect those which have been collected in illegitimate ways. These users will have no more room in Pocket Arena as we have introduced aPOC that makes sure these XPs are not manipulated via our strict audit process, including KYC. We have seen from a few pioneering gaming projects like Axie Infinity had suffered by some initial whales who used bots.
Pocket Arena’s mission is to create a sustainable eSports platform that everyone can enjoy and engage in safe in-game item trading via blockchain technology.