Good morning Here’s what happens:
Prices: Markets are calm given the protracted long weekend in the US and the plethora of economic data arriving this week.
Insights: Animoca’s Yat Siu is hurting GameFi’s cause by ignoring Ponzi issues.
Quiet long weekend keeps bitcoin above $30,000
With the US out of action for an extended long weekend, markets are weak as Asia begins its Wednesday trading day.
Bitcoin is down 1.1% to $30,807, while Ether is down 0.8% to $1,939. The CoinDesk Market Index (CMI), a measure of the performance of crypto markets, is down 0.9% to 1,262.
Data from CoinGlass shows that while open interest in the $14.38 billion market continues, overall trading volume has declined, with major exchanges reporting declines of between 15% and 20%. The liquidation volume reflects this: only $148,000 worth of positions were liquidated in the last four hours and $7.2 million in the last 12 hours.
CoinGlass’ long/short ratio shows that long traders still have a slight advantage over short traders, but the trader sentiment survey paints a mixed picture, with a large cohort of neutral traders splitting the bullish and bearish crowd.
As CoinDesk previously reported, liquidity continues to be an issue as fiat liquidity dwindles, which could weigh heavily on risky assets like tech stocks and cryptocurrencies. With plenty of economic data rolling out this week, let’s see how traders react.
Animoca co-founder Siu shouldn’t dismiss GameFi’s Ponzi issue
The GameFi industry is working hard to rid itself of the notion that it is a cesspool of Ponzi schemes.
During an interview at the Collision web conference in Toronto, Yat Siu, co-founder and CEO of Animoca Brands, criticized these efforts.
“The GameFi as Ponzi narrative is an American narrative. If you go to Asia or the Middle East, you wouldn’t hear about it,” Siu replied to a question from YouTuber A.Cole. “This is due to a misunderstanding of what GameFi really is.”
Ponzi schemes are investment scams that promise high returns and where old investors are paid by new ones rather than legitimate sustainable business activities. To its critics, GameFi’s play-to-earn model is a Ponzi scheme, as it relies on a transfer of wealth from new to old players rather than fairly engaging gameplay.
Siu further argued that GameFi is not about creating financial value, but rather about opening game finances to transparency.
Siu is not wrong on this part. There have been economies of scale in games for quite some time; US politician Steve Bannon made big money running a virtual World of Warcraft gold trading counter in Hong Kong in the early 2000s.
But he’s been incredibly dismissive of the real problem GameFi has with Ponzis — which others have recognized as something holding the industry back.
In a 2022 essay in which Vader Research, a Web3 gaming market research firm, lays out its investment theses, it argues that the current wave of Web3 gaming is not designed for fun-seeking traditional gamers, but “for Ponzi-return- seeking crypto swords and gold farmers.” Scholars.”
“We believe Ponzis will slow adoption of Web3 gaming,” they wrote. “[Many projects] Using complex tokenomics to disguise their Ponzinomics nature will set Web3 gaming back several years in terms of acceptance by real gamers.”
Vader points out that GameFi projects offer “unrealistic returns,” which she says not only threatens the long-term adoption of cryptocurrencies, but also hampers the growth of true Web3 gaming.
And a year later, there’s some confirmation of that idea as we see what happens when the inflow of resources no longer exceeds the outflow.
Data from CryptoRank.io shows that Animoca Brands’ token basket is down 18% over the past 6 months and 17% over a longer time horizon of 3 years. In comparison, many other investors are well in the green for both timeframes, given the mini-bull market in 2023 and overall cryptocurrency growth over long time horizons.
A16z, for example, is up 20% in the last six months or 375% in the last three years.
Perhaps the industry would be better off listening to the research institutes of the Sith Lords and not those who defend Ponzinomics by saying everything is misunderstood.
The Hash reviewed the day’s top stories, including Elon Musk’s announcement that Twitter is introducing new “temporary limits” on the number of tweets users can read per day. Additionally, Atrium Founder and CEO Supriyo Roy joined the show to discuss the release of a DAO-funded animated film that brings NFTs to life. And an update on Azuki a week after the release of the Elemental NFT.
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