Play2Earn Games Spark NFT Fever in Venezuela

A video game tied to cryptocurrency pays good money to those who are patient enough to spend many hours on it. But, how reliable is this alternate source of income?

This story starts with me joining a Telegram group with about fifteen hundred people online. Once I finish reading the fixed comments—where they usually post instructions and rules of conduct for the community—I realize the traffic has gone up by at least two hundred people in the last five minutes. The chat moves at a blinding speed, with several bots quickly answering the users’ questions. These questions tend to be recurring throughout the chat: “How do I add funds to my wallet?” “Where do I swap tokens?” “What time does the next update begin?” asked in English, Tagalog, Portuguese, and Spanish.

This group hosts the community of players of a Vietnamese game featuring virtual dragons that must be sent to fight non-stop, a simple and repetitive task. In an era where we can already experience augmented reality, the game has an archaic aesthetic, it doesn’t even have 3D graphics. 

So, what’s all the fuss about?

It’s simple: each time you click and send your little dragon off to fight for about one minute you earn money. Well, you really get a fraction of the game’s native token, and if you accumulate enough of them, you can swap them for cryptocurrency. This game is built on the same cryptographic network that holds the alternate cryptocoin or altcoin, Ethereum, so each time someone plays, they are mining resources from there. Each dragon is, in turn, an NFT (Non-Fungible Token) created over that same technology. They are unique, unrepeatable, and they are also worth money.

In these Telegram and Discord groups, you’ll often see people freaking out when there’s an airdrop event, where a limited amount of crypto coins or tokens are distributed to the community for free. 

The group moderators ask everyone to calm down and they let them know that it’s about to go down. They say that those who enter in the next five minutes will get a free NFT so they can start playing. The countdown feels like New Year’s Eve. When the clock hits the exact time (11:00 p.m.), I press F5 to reload the home page and I get an error screen. There were so many people trying to go in at the same time that the server crashed. The platform wasn’t able to take the avalanche of users coming from five different countries.

Let’s move on. I jump from Telegram to Discord—the base platform for gamer communities—and I go around the channels dedicated to NFT games updates, developing projects, some servers of the self-appointed crypto gaming gurus, ardent Twitch streamers, and meticulous YouTube content creators on crypto. I always see the Venezuelan flag among all the emojis and emoticons in the comment section.

The Venezuelan tribe inside these groups, forums, and chat rooms is quite large, and it competes directly with the Philippine, Vietnamese, and Argentine communities; countries that have adopted blockchain technology as a way to fight inflation, bad salaries, and bad economic policies.

It would seem like NFT based games are the next big thing creating FOMO (Fear Of Missing Out) in the crypto world.

However, I think there’s something bigger going on beneath the surface.

The Perfect Storm

I should make one thing clear to start with, cryptocurrency culture and NFTs are very complex and, while I’m no analyst or specialist in the subject, I think that—in order to assess a technology’s impact on a community—we have to observe the use it’s given through time.

When this NFT boom took off at the beginning of the year, the first thing we saw in the news was eccentric American influencers making million-dollar purchases of avatars, cards, and digital images that, just like traditional collectibles, were more or less valuable depending on how rare they were, their supply, and creator. This NFT consumption established something that may be seen as new status symbols on the internet—let’s remember that we were all locked up in our homes because of the pandemic—and some outlets compared having the Bored Ape Yacht Club avatar to boasting a sports car or buying designer shoes.

So, at the other end of the same table, play2earn games came up, built on the main blockchain networks, and—with their turn of the century aesthetic and repetitive dynamics—promised their players a small piece of that world that Elon Musk and other prophets of the future talked so much about. The idea was simple: you make an initial investment buying a few game NFTs—meaning characters, cards, figures—and then, by playing a few hours every day, you can pick up tokens which, just like video arcade games, you can exchange for crypto coins.

For most fans, this didn’t seem very attractive at first, but soon we understood that users of these games were elsewhere, mostly in developing countries, and weren’t afraid of spending many hours “farming,” playing, and competing for fractions of Ethereum, Matic, or Wax. Venezuela, undoubtedly, leads the top-ranking spots.

Farming culture in video games has been a way to get by on a daily basis for thousands of young people in the country.

We can’t fool ourselves, farming is a slow and tedious job consisting of extracting resources to then sell to other players who want to move forward faster. It’s a dirty job, but someone has to do it. In games like Runescape, really important events have taken place, where thousands of Venezuelan farmers banded together to conquer the virtual world.

Another important factor is that cryptocurrency has slowly found its way into the decimated Venezuelan economy. In spite of the low trust generated by the government’s crazy idea of creating a centralized digital currency like the petro—going as far as forcing people to use it—citizens have gotten used to talking about wallets, bitcoins, satoshis, faucets, and exchanges, the same way they talk about Zelle or BofA on the streets to pay for goods or services, or even to receive remittances and protect their savings. The FUD (Fear, Uncertainty, and Doubt) surrounding cryptos in other places, because of their volatility, is dispelled when you live in a country with such hyperinflation that, at this point, doesn’t even raise eyebrows anymore.

According to a report by Chainanalysis, in 2020, Venezuela was already in third place in terms of adopting cryptocurrency, only behind Russia and Ukraine, and fighting for the fourth spot with the USA. If we think about it, we might be facing a new economic dynamic, in which organized communities of local gamers enter to compete in masses in a market they’re already familiar with.

Another factor to consider is that NFT games are executed from browsers and they don’t need very powerful computers or phones, which is convenient in a country with a huge technological gap and where most people haven’t renewed their equipment since at least 2018.

It all points to Venezuela being a breeding ground for players. But inevitable questions arise: how much money can you make? Is it really profitable? Can you go up in ranks or is it just another pyramidal scam?

The Goose with the Ethereum Eggs

Back to the Telegram and Discord groups. I look for testimonies of players who have been doing this for a while and can tell me if they’ve made money as promised by the TikTok pontificators, or if it’s just a bubble about to burst.

I ask in the first group and the admins block me in a heartbeat. I do the same in the second group, and I’m expelled again. The level of hostility never ceases to amaze me. I get to a third group and they make me go through an “anti-witch” bot to make sure I’m not “a vulture.” Either way, no one wants to talk to me. They all say that I’m a scammer, that the government sent me, and that I want to write a clickbait article.

Although no one is put off by the markets’ volatility, the fear and mistrust towards someone who asks too many questions is tangible in the groups with our tri-colored flag. I go into the Discord server of an Argentine YouTuber and I yell echoing inside the cave: “Any Venezuelans here?” A couple of users timidly answer, and I finally start my first conversation through private messages.

I’m immediately asked for my press credentials, my editor’s Twitter, and the name of the outlet that employs me. “It’s Venezuela. You never know who you’re talking to,” he says. I’m straightforward and I tell him: “Look, man, I’m not a journalist, I’m just writing a short chronicle about this whole thing because I’m a nerd and I love these things.” He loosens up and we start talking. He says I can call him Matu; he’s around 40 years old, and he lives in the west-central part of the country, and he’s up to his ears in the NFT world. “I started doing a lot of research, and when I was ready to invest, I got COVID-19. That completely decapitalized me, since health care here is absurdly expensive. In the middle of all this, I decided to gamble my last cartridge on CryptoBlades and it was a huge success. Nobody expected it to be such a hit.”

CryptoBlades is a game similar to the one with the little dragons I described at the beginning: you have a knight you send out to fight every once in a while by clicking on it and getting rewards. The thing is, the value for the game’s native token went from 5 to 184 dollars overnight. It generated stratospheric profits to those who were hodling (waiting for cryptocurrency to go up in value to exchange it) and afford a pizza at the end of the month. “So, from there I went into all of them: Axie Infinity, Zoo Crypto World, Plant vs. Undead, Polkamon, My Defi Pet, Dragonary, and I’m eyeing games like Mist, Mirandus, and Guild of Guardians,” he said proudly.

We discussed how some of these games are kind of like the lottery, because—since some of them are still in development—they can go very high and make a profit or go very low if a hacker sabotages the system or servers crash.

“These are very risky games that can lead to a lot of stress, on top of the power outages or internet failures that can happen, but it’s worth it.”

Most of these projects in a developing phase have an average return of 30 to 750 dollars per month, and the more established ones have become a main source of income to many people. “The king of these games is Axie Infinity; this project has very important partners. Axie has investors like Mark Cuban, Samsung, Binance Exchange, among others…I believe that those people invest their money and give their image to a project because they see a future in it.”

Axie Infinity is, for now, the holy grail of NFT games. Its model seems to be profitable in the long run. However, the initial investment is one of the most expensive ones: to enter you must invest between 1,500 and 5,000 dollars in a team of three Axies in order to play, with the promise that you’ll get your investment back in a couple of months. The Philippines was the country who was responsible for making it so popular because, during the pandemic, it was the source of income for hundreds of vulnerable families. Until now, the game has generated over 900 million dollars in transactions only last month, and the game’s native token has skyrocketed to historical highs, with almost 900,000 active players per day. Since it’s such a large community, developers proposed an alternative so that the player base doesn’t crumble to the ground as a result of the high cost of their assets: it’s a “grant” system where users who already have several Axies teams basically sublet their creatures so that others farm for them. The point is that in time, they can all make enough money to buy their own characters. However, some specialists warn that this business method is quite fragile and can be used for scams and abuse.

After researching about groups and people in Venezuela who hand out these grants for the game, I couldn’t find much information. A new wave of local-mini-influencer-nerds is positioning brands by offering Axie grants and “job opportunities” in the virtual world if you join their community. They position hashtags, do live feeds, and increase their long line of followers with dangerous promises of exorbitant winnings. Where have I seen this before? Is this some sort of crypto-populism? Crypto-cult? I try to contact some of their evangelists, but no one wants to answer questions or talk about money.

Matu makes a confession almost at the end of our chat: “I’m going to tell you something, I come from working for eleven years in the oil industry and had to face the fact that the world is changing. That you have to be like the mouse from the book “Who Moved My Cheese?” In these eleven years, I’ve gone from working in the number one industry in the country to staring at its ruins. I’ve seen people attached to the company, even if they had nothing to eat at home; maybe out of love for something that once fed them, maybe out of loyalty, maybe out of hope that it would get better, I don’t know. I still think about my old work colleagues who are still there, and I feel for them; they’re entrenched in their position. Personally, I see NFT games as a very friendly alternative to make money from home, without the dangers one faces by going out, without being exposed to COVID.” 

By the end of the day, the people in the Venezuelan chats say good night. Since it’s night-time, the Philippine dawn is about to break and, on the other side of the world, players are waking up to start farming too, slowing down the servers. Undoubtedly, this scenario will little by little turn into something more frequent among Venezuelans. In the meantime, I buy a few NFT plants, hoping that if I water them enough, someday they’ll bear some crypto fruit.

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Daniela D'Santiago

Trujillo linguist based in Bogota. AI and new technologies enthusiast. Human development and migration.