Blockchain games are becoming increasingly popular. However, there are ongoing debates in the gaming community about the merits of NFTs. Some see it as exploitative, while others see it as legitimately useful. Nevertheless, we cannot argue that some investors have made money from NFT games.
With this in mind, how can you invest in NFT games without getting your hands burned?
What is an NFT game?
Simply put, NFT games are games that use non-fungible tokens. They are more than just a way to store crypto collectibles in your wallet; they include player interactions, purchasing avatars and weapons, and the potential to generate revenue from NFT games via the play-to-earn model.
NFTs are expected to play a significant role in driving growth in the gaming industry. They allow developers to earn from their work while allowing players to earn by interacting with them. In addition, NFTs use blockchain ledgers to validate unique digital collectibles, which is essential to how NFT games work.
CryptoKitties, released in 2017 on the Ethereum blockchain, was one of the earliest games to incorporate NFT characters. It allows players to buy virtual cats, add them to their collections, breed them and sell them. The project is one of the early attempts to utilize blockchain technology for recreation and leisure activities.
How do NFT games work?
NFT games blend conventional game design with traditional game architecture to give users greater control over in-game assets such as characters, weapons, skins, virtual territories, etc. These games are built on blockchains and run on digital assets. Having an NFT token standard for in-game assets also helps developers retain their rarity and uniqueness.
NFT games can be compared to regular video games. The main difference is that prizes and loot won in an NFT game do not need to be kept in the NFT game. Instead, you can transfer your items to another game or exchange them for cryptocurrencies.
The Play to Earn NFT model allows users to develop income streams. The more you play and the longer you play, the greater your profit potential. As a result, the reward is not only competitive but also monetary.
An NFT has no intrinsic value; it is valuable to the extent of the value it provides to its holders and how much people want to own them. The value of an NFT can also vary depending on factors such as content, utility and scarcity.
NFTs keep track of who owns which assets in the game. They are also made in defined quantities and cannot be changed. NFT games are built on a blockchain, meaning all players can see and interact with the game.
Understand how scam NFT gaming projects work
Many NFT gambling scams use social media accounts. Fraudsters hack or buy verified social media accounts or accounts with thousands of followers, usually on Twitter or Discord, and use them to impersonate popular NFT gaming projects. They usually have an army of accounts that they tag to make comments that support the project. They also use bots to send automatic replies, retweets and tag other users.
These scams offer high compensation to lure you in and sometimes send links containing malware designed to help them hack into your computer. Then, after a series of attacks, they often block access to their website or comments on social media.
Some NFT game scams use the rugpull scam technique. The promoters use marketing to attract buyers or investors and suddenly stop the trading activity, running away with the money collected from the sales. One of the more recent examples of this is the Squid Game Token Scam. The digital token was inspired by the popular Netflix series “Squid Game”. First it marketed itself as a play-to-earn cryptocurrency, then the game developers got away with more than $3 million.
The many other NFT-related scams increase the need to be cautious when getting involved in NFT games.
5 ways to spot a scam NFT game
Below are five things you should check to avoid getting involved in an NFT gambling scam.
1. The project team
It is important to understand who is behind the project and how long they have been involved in the NFT environment. You can determine this by looking at how long the founders’ or developers’ accounts have been active. A well-known project can be more reliable than one involving unknown people.
If the information about the project groups cannot be verified, this can be a red flag. Although the NFT system promotes anonymity, even the most anonymous NFT developers leave a paper trail in society. However, not knowing who the developers are does not automatically mean that a project is a scam.
2. Reviews
What people say about the project matters. If you check out reviews, you can see what other people think about the project and even the developers.
Unfortunately, reviews may not be entirely accurate. Companies pay experts to post positive reviews of their products and services. Some people set up hundreds of accounts to create these reviews to create a false public image. For this reason, you should not rely solely on reviews.
3. Engagement in social media
Twitter and Discord are key platforms for building NFT communities. You can monitor projects on these official social networks to see how people interact with them via comments and chats. But of course this is not an absolute standard for verifying the authenticity of a game project.
People buy fake followers and engagements to make their social media accounts appear bigger. Therefore, you should be careful with an account that was only created recently but has a lot of followers. However, some projects become attractive very quickly and therefore gain a large number of followers in a short time.
4. Project roadmap
A strategic plan must show the project’s goals and desired results. The plan should include practical steps and milestones needed to achieve the goal. The road map must be clear and easy to understand; it must also be flexible and at the same time centered around the big picture and the solutions it provides.
Having a well-defined roadmap is no guarantee of success. It only reveals the creators’ goals and expectations for the project, and there is no certainty that they will be realized. A strategy that seems overly ambitious and a project that seems too good to be true can be red flags. It is also not a good idea to invest in any NFT game if you are not sure of its long-term viability.
5. Confirm NFT
Using a blockchain explorer to verify the blockchain metadata is one way to validate the authenticity of an NFT. A blockchain explorer like Etherscan will provide details about an NFT. For example, it allows you to see block mining activity, transaction fees, ownership history, number of uses and the total number of issued tokens. Additionally, verifying the NFTs in the game will help you distinguish the fakes from the originals.
Avoid NFT gambling scams
When checking the authenticity of a gaming project, you should leave no stone unturned. Take the time to research the project, the people behind it, and the goal, using all the methods we’ve shown you. Unfortunately, as more NFT projects are launched, fraudsters also develop new ways to defraud players and investors. With this in mind, you must be vigilant and verify the transparency of any NFT gaming project you intend to invest in.
