Yes, the con men that are pushing this shit to their sheeple and then selling as soon as the price is high are, but everyone else is loosing money. Why do they keep doing it? Because it’s like gambling to them “this next one will for sure be a winner, I can feel it!”

People make money at it, but nobody makes wealth at it

Thank you for asking. Let me tell you the truth. NFT gamings, all of them, are Ponzi scheme.

If you look at NFT game as a game, sure, some games are good and have entertainment value, such as Axie Infinity.

But if you look at NFT games as source of income, then they are all Ponzi ?

Think, where the money comes from? Who will pay for the token, the “pet” you breed, the item you get from lootbox ? New user, i.e: new Investors.

That’s it. Use money from new investors to pay old investors.

If you are unlucky enough to hold the bag. I.e: player who have not sell their NFT before the game close. You lost your initial investment.

I’m going to pretend this article was mostly written by a bot and that there’s no way a living, breathing human sat down and wrote this. I’m lying to myself probably, but it helps keep me sane.

A lot of the underlying scams are very low-tech. I sometimes work for VCs and get asked to investigate blockchain stuff (a lot in 2022, not so much now!). I’ve vetoed 100% of deals after investigation. For brevity, I’ll only describe the main two type of crime I’ve encountered.

Embezzlement of funds raised is a common one. Most are not exactly criminal masterminds though, and you can see the project accounts being emptied steadily into exchange accounts if you’re really determined.

A lot of the rest is wash trading. Usually exchanges will give you a zero-trading-fees account, and tell you that you need to maintain a minimum volume, wink wink. So most of these scammers just trade between accounts they own, to create the illusion of a sudden rise in price (coinciding with a marketing push). This you can also sometimes catch by looking at orderbook timing. Sometimes you can break their bots too. Often they hire external entities to manage this, so won’t notice overnight.

Anyway, in this last case there is usually just an illusion of people making money at the top. The price spikes, but the whole orderbook is just someone trading with themselves. So if you buy in, they take your payment (and they make a little money)… but there’s no one to actually sell to. You can detect this sometimes by looking for orders being placed then filled within very short time intervals. A lot of these groups make a lot less money than they claim to!

This is easier for NFTs because they are non-fungible. One way you can do this is to track which ones are owned by your company and which are something someone else bought. So you only trade the NFTs that are internally owned in a way that makes them look like they constantly increase in price. Once an NFT is sold to an external account, you cross it off the list and never buy it back, and it’s magically immediately worthless.

If you mention these activities on their official channels, they will just ban you.

There’s also a whole slew of regulatory compliance issues, fake legal opinions, and so on… but I’ll spare you those as it is more boring to read about.

The whole blockchain space is a cesspool of inequity. Stay far away, unless you just like playing around with cryptography for fun. In that case, it’s a cool toy and it’s fun to build a few blockchains in an afternoon to play around with before getting bored and moving on to other technology. I have built a dozen or so blockchains and a few smart contracts to make sure I fully understand the technology before recommending my clients reject investment deals. This has (perhaps ironically) made me somewhat of an expert in the domain, albeit an unwilling one. I consider that path a career dead-end, and look forward to slowly forgetting about it.