People have always sought easy money through games, movement, or simple actions, but these ventures often end in disappointment. Is there a sustainable future for earning money through daily activities?

The Hamster Kombat Airdrop: Lessons Learned

The Hamster Kombat airdrop left thousands, if not millions, of users disappointed. This isn’t a new phenomenon; the crypto community has witnessed the rapid rise and fall of several mechanisms that promise earnings through simple actions. What insights have we gained from these experiences?

Early Appearance: Hope for Stable Earnings

The advent of web3 games sparked significant interest in earning cryptocurrency through basic activities. Play-to-earn (P2E) games emerged, allowing users to earn cryptocurrency and NFTs through gameplay.

Axie Infinity was a pioneer in this space. Players needed initial capital to purchase Axie, a virtual NFT pet. By completing tasks, battling other players, and leveling up, users could earn tokens. These tokens were tradable for other digital or fiat currencies, and items could be sold on crypto exchanges and NFT marketplaces.

The game was initially seen as a viable earning option, especially in the Philippines during the 2020 pandemic. Filipino crypto enthusiasts formed guilds, offering opportunities to earn money through P2E games. However, in-game inflation led to the decline of Axie Infinity. The price of its utility token, Smooth Love Potion (SLP), dropped significantly. At its peak, Axie Infinity had over 2.7 million monthly active users (MAU), but by July 2024, this number fell to just over 310,000. The decline was exacerbated by a large-scale hacking incident in March 2022.

Healthy Habits Replace Gaming, But Not for Long

As P2E games declined, move-to-earn mechanics gained attention. STEPN was a notable example. However, its profitability suffered due to an influx of users, and some experts likened its mechanics to a financial pyramid.

Despite suspicions, early players managed to make significant earnings. However, the project’s cost maintenance mechanisms failed, and its popularity led to its downfall. Instead of using in-game tokens, users converted them to tradable tokens, hoping for further growth. By September 2024, STEPN’s MAU dropped to less than 19,000 from over 705,000 in May 2022. At the time of writing, the native GMT token is priced at $0.1464, down 96% from its all-time high (ATH).

Mechanics Become Simpler

The evolution of the “to-earn” segment led to tap-to-earn mechanics, simplifying the process further. Hamster Kombat was a popular project in this category. However, it faced backlash due to the size of its airdrop.

Signals of Hamster Kombat’s potential failure were evident in its tokenomics and audience composition. With 75% of the token supply intended for the community, many users quickly sold their tokens, creating pressure on the coin price. The project’s referral mechanics built a large user base, but this also posed a risk of collapse.

Will the Community Learn from Past Failures?

Yat Siu, co-founder and executive chairman of Animoca Brands, highlighted a significant issue for blockchain games: the lack of established distribution channels. Large platforms like the Apple App Store and Steam often restrict games involving NFTs. However, he believes that increased interaction with blockchain through accessible apps will encourage mainstream game developers to invest in web3 gaming.

Bozena Rezab, co-founder and chairman of GAMEE, sees the phenomenon of such games as a driver for mass cryptocurrency adoption. She noted that 131 million users received Hamster Kombat tokens, indicating the potential of casual gaming to drive crypto adoption.

Is There Any Hope for Making Money?

Who benefits from to-earn projects? Typically, project creators and early participants. The benefit for users in web3 games is debatable. While there have been successful cases of withdrawing in-game currency, the large number of active users makes it difficult for developers to cover all earned money.

Play-to-earn, move-to-earn, and tap-to-earn projects often fall victim to their rapid popularity. Most of these games operate on a pyramid scheme model: new players fund old players until interest wanes, leading to the project’s downfall.

Are all easy money projects doomed to fail? Not necessarily. The main issues are poorly designed tokenomics and reliance on a constant influx of new users. The future of earning mechanics will depend on the ability to implement sustainable business models. However, as long as these mechanics resemble a pyramid, the web3 gaming world will continue to experience high-profile ups and downs.

#Cryptocurrency #StableCoin #CryptoInvestment

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