[adnzzzzZ]

Investors also buy tokens because they think it will go up, not only people playing the game. Yes, people will lose if it goes down, but that's what it's like with everything. Some players will win, some players will lose, some investors will win, some investors will lose. There is absolutely nothing wrong with this. This is how the world works. If people think the project has value then it will go up in value and if they don't then it won't. I don't understand why people make it so complicated and try to imply that there's anything wrong with this.

[sailingparrot]

Because that's actually not how the world works.

With traditional company, some consumers are paying it for a service. Apple is making 300B$ a year because a lot of people are willing to partake large amount of money in exchange for some good that they (think they) need such as a laptop or a phone. The consumers have no expectation of getting that money back later, it's a trade.

If you think Apple is a good company and will be more successful in the future, you can decide to invest it in, and you buy a share of that company to some other investor against cash. In theory, it's possible for every single investor of Apple to make more money than what they paid for through dividends: As long as Apple keeps making products that people are willing to pay for, it will make money, and investors get a chunk of that money. Here value is created by work happening in the entire value chain needed to produce the good. Because if you had to make your laptop yourself with a pickaxe, it would be quite inconvenient.

Also, if everyone suddenly decides to dump all their Apple stock, it will go down a lot, but not to zero, because the company as an actual intrisinc value: they have hundreds of billions of $ in cash in their war chest, have a lot of valuable physical things, and will continue to make hundreds of billions every year no matter what people on the stock market think.

Overall it's not a zero sum game, because consumers are providing an external source of cash to the investors.

Now, the more a stock is overbought, the closer it becomes to zero sum. Tesla for example, if it fails to realise the bright future that everyone is betting on, then it will get ugly as it's current stock value is disconnected from it's current intrinsinc value.

Axie is very different, the price of the token only rise because of investors (here players), there is no external source of money going in that could make everyone richer. It's a bunch of people sitting in circle around a pile of cash with the promise that they will be able to take a random piece of the pile later on. And if you want to be able to sit with them, you first have to put cash on the pile yourself. Looking at the pile of cash getting bigger and bigger is exciting, but you will have to fight everyone else to get more than you put in. Oh and while you are sitting there waiting for the pile to get bigger, the people that organise the event are shovelling money out.

All (most?) crypto games today are zero sum. However it's possible in the future that they may not be. I am thinking specifically about the ones that brand themselves as "metaverse". If the game in itself is interesting enough that people are engaging with it for a long time, then companies will want to start advertising in it, and if shares of that revenue are reinvested in the in-game economy and not just entirely taken by the company behind the game, that could be an example of external influx of money.

[adnzzzzZ]

>Axie is very different, the price of the token only rise because of investors (here players)

There are players and investors who actually only buy the token and don't play the game. These are different people. Here the "external" source of money for players would be the investors who don't play the game and for investors it would be players playing the game because they think it's fun. In Axie's case that's probably a minority of people, but that's obviously not the case for most games, you only need to look at games like Genshin Impact to see that people are willing to spend tons of money on good games just because they want to spend money on it.

So yes, in this particular case it's a bad business, and I agree that the same is true for most other crypto games right now, but there's zero reason for it to remain the case in the future. Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.

[sailingparrot]

> Here the "external" source of money for players would be the investors who don't play the game and for investors it would be players playing the game because they think it's fun

They are all part of the same system, both the investor and the players buy or get some AXS, and both hope that AXS will go higher so they can make actual $ later on. None of them are putting $ in the system that they do not want to get back later on, which is very different from someone buying an iPhone: they know Apple will never give them that money back. So it's still a 0 sum game, no matter if some people are playing and others aren't.

> Nothing about the setup fundamentally prevents people from spending real money on real games, and from the token's value to increase as a result, like any normal company.

I agree, that's the last part of my comment. But mechanisms need to be put in place for people to spend (and not invest) actual money in the ecosystem, say through advertising, or buying things (that you cannot resell later at a higher value), and the profit needs to be in part redistributed to the community. That's not happening today in Axie, maybe it will eventually, but today it is indeed a Ponzi scheme.

[adnzzzzZ]

Sorry but I just disagree. A game that is free to play and where every item is bought and can be sold later for a higher price doesn't stop being fun and engaging just because people can sell what they bought when they feel like they don't wanna play anymore. The idea that there absolutely need to be people who are buying things without the intent of ever selling them isn't what would stop from making it a "ponzi scheme". Like I said, people sharing in the success (and failure) of a company's valuation is not a ponzi scheme.

>and the profit needs to be in part redistributed to the community.

This already happens through the token's increase in value. The notion that this redistribution can ONLY happen if there are money sinks in the system is misguided and old fashioned.

[iamevn]

How is the token increasing in value outside of people speculating on it? The only money entering the system is investors and fees drain that out of the system. Without people spending, not investing, the system is doomed to hurt people who are left holding tokens when everyone else has cashed out.

[adnzzzzZ]

>The only money entering the system is investors and fees drain that out of the system

? Fees are generally extremely small. All the money that enters the system is from investors and from players. The fees are minimal and have almost no effect on this.

>Without people spending, not investing,

Those are the same thing because both players and investors can cash each other's money out. There's literally no distinction between both things.

>the system is doomed to hurt people who are left holding tokens when everyone else has cashed out.

That's the case with every stock that currently exists. When a company fails there will be bag holders who lost a lot of money. Ideally the company doesn't fail and keeps making games forever.

[smoldesu]

So what you're trying to tell me is that trickle-down economics works in the context of an app?