#Play2Earn & SDGs
In August 2021 Axie Infinity, a #Play2Earn NFT game posted USD848million in monthly sales up 481,000% from USD176,000 the August before. A large amount of this growth was due to adoption by players in the Philippines who represent over 40% of the player base, and who were playing the game to replace money lost due to tough covid restrictions.
As the adoption grew in the Philippines stories started to surface of families and communities coming together to play the game, to earn a cryptocurrency, which was then exchanged and spent to support local people, and communities in need. The Avocado Guild, a local community group focused on offering Axie Infinity scholarships, launched the #Play2Enrich program with the express aim of introducing those in need to play the game and to share in the revenue generated.
Under the banner of this movement, Avocado guild volunteers have distributed support to many communities in need at a time when local government and international non-government agencies have been hamstrung by the pandemic. And all of this has emerged from a decentralized leaderless system.
The most notable example of this is the case of the San Carlos City Fire, that on August 31st resulted in the burning of 70 houses affecting over 375 people. With over 200 ‘scholars’ located in San Carlos City, the Avocado guild community were able to quickly mobilize resources to support the affected to address immediate needs, and then went on to offer scholarships and training to families in need so that they could earn and replace income lost by the tragedy.
It’s arguable that in August 2021, Axie Infinity, an online game did more for Sustainable Development Goals (SDGs) in the Philippines than the whole sustainable development sector combined.
There are now over 80 organized Axie infinity scholarship guilds and there are probably thousands of others associations of players who lend each other Axie’s to play. The revenue share profit incentive of lending NFT assets to generate income 24/7, drives adoption of the scholarship model, and consequently new users to the game.
Yield Guild Games (YGG), one of the most celebrated of scholarship guilds has a fully diluted market cap of a little over USD6billion. YGG collects in-game assets and loans them to #Play2Earn players under a similar scholarship revenue share model — only they do this for multiple games.
And the movement is just getting started.
Axie Infinity is continuing to grow month on month daily active users, posting over USD2billion in NFT sales in the last 3 months alone. This, compared to a total NFT sales of USD94million for the whole of 2020 for the whole of the NFT market.
If this is not jaw dropping enough, the #Play2Earn space could just be the onramp for the developing world market to explode into all the other services and assets available in the crypto world. When you look at the crypto adoption globally, it’s pretty clear that it’s not the rich who are the early adopters- its largely the developing nations, thirsty for security and sovereignty.
Gabby Dizon of YGG stated in a recent Bankless podcast that “Defi is bringing gamification to the finance industry, and #Play2Earn is bringing finance to the gaming industry”.
Perhaps #Play2Earn is bringing the masses to crypto.
If these trends continue, and we see the #Play2Earn movement continue to spread, bringing in more people from developing countries into a digital asset world…
I'm almost speechless at the scale of the impact that this could have on the sustainable development funding sector.
When people talk about the greatest wealth transfer in history, they are usually referring to the USD35trillion that will be transferred between Baby boomers and their heirs over the next decade. The creation of wealth that will result as the developing world embraces #Play2Earn, digital assets and cryptocurrency could potentially be even greater than the “greatest wealth transfer”, if not in real numbers, at least in impact.
Today the global cryptocurrency market is valued at USD2.2trillion, with an estimated 300 million users, which is about 3.8% of the worlds population. Much of this asset value is held in developing countries, where asset holders see outsized gains when framed in local currency terms. As this networked market grows individual wealth will grow, as will people’s ability to impact the world around them, and their local communities.
This story, however, is a double edged sword, as people become less dependent on Development Funding and more independent to do as they please, there will be less ability to influence communities towards good SDG outcomes. Although, this is great news, it could also be the birth of a new growth period that is largely absent of SDG influence.
This change should be the at the top of the SDG agenda — the game has changed. We need to change our solutions, we need to disintermediate where value is being lost, we need to bring back transparency, we need to rebuild trust. But most of all we need to establish real solutions that incentivize good SDG behavior and that value and engage local stakeholders as the critical actor towards progress.
We could be at the beginning of a renaissance in sustainable development.
