I'm very unlikely to invest in two kinds of NFT projects:
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
- Anything involving P2E
- Anything involving "metaverse"
I find myself having to explain why over and over again on Discord, so... here's a thread, because I'm tired of repeating myself, lol.
👇
First, an extremely important disclaimer: I could be monumentally wrong about all this.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
This is my *opinion*, and why *I* won't invest in this stuff. So long as I'm right about the stuff I *do* invest in, I can afford to be wrong about the stuff I *don't* invest in.
This is a good first meta-takeaway:
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
It's a lot cheaper to be wrong about the stuff you didn't invest in, than about the stuff you did invest in.
So if you feel quite uncertain about a space... don't invest in it. Invest where you have conviction, where you know you're right.
Let's take P2E first. I've talked about P2E before here https://t.co/9yPCjoMNfQ
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
There, I was mostly decrying the presentation of P2E as "the future of gaming", which as a lifelong gamer I found both unconvincing and utterly depressing.
Since then, P2E has evolved a little bit.
First of all, the space finally wised up that everyone is already doing P2E games all day long: they're called jobs. You play/grind some quests which can vary from utterly meaningless to quite fun, and you earn fiat money.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
The world is already the largest, most complex P2E game.
And you know what *everyone* would love to do when they finish their day of grinding for fiat and log in to a nice game of Super Dragon Mario Ballemon Prime?
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Yeah, grind for eth. That's what we want to do.
</sarcasm>
And on top of that, of course, the mechanics of P2E are unsustainable as pitched. So the space has evolved a little bit and switched to Play *And* Earn. That's a little bit better. At least it tones down the absolute barefaced lie that everyone will actually "earn".
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Because as we saw in my older thread, P2E cannot enable everyone to earn, because P2E is just gambling. Every P2E game is, quite simply, a casino. It might be a wolf-themed casino or a pokemon-themed casino, but it's still a casino.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
In a P2E casino, the same rules applies as in all casinos:
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
The House Always Wins.
Eventually, Money In = Money Out, and some of the Money Out has to pay the casino's costs, so players lose money on avg.
So it's not Play To Earn unless you're deluded or lucky.
The balance can of course be tilted so certain sub-groups make money on average.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
I can totally see how someone in the Philippines who has a choice between grinding at a really hard and uncertain job for $10/day and grinding Pokemon games for $10/day will choose the latter.
But still, Play And Earn.. PAE?.. is still a casino.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Casinos and other gambling houses are fine and sustainable businesses.
The model has existed for thousands of years.
And I won't invest in NFT casinos right now for four reasons.
Btw, if you like this thread, you can find many more like it at https://t.co/FRGyA8H9Rh You'll also find my NFT daily market health index: https://t.co/tuySNnEcMB . And my transparency report, to see what I *am* buying. https://t.co/aGCjv0mAZl
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Pls RT tweets you like... Thanks 🙏
The first reason I won't invest in P2E casinos is the hype. Hype, as I've talked about b4, tends to result in overpriced projects, and when hype goes up it always comes down.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
With successful P2E launches like Pixelmon the hype is so loud it drowns out all other signals.
A little bit of hype is ok, but top P2E launches are usually fuelled by hysteria. How else can you explain $70m going to an undoxxed team with an average demo?
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Hysteria makes it really hard to:
- assess the project fairly
- get through to the founders
That latter point is important. If the project is super hyped with tens of thousands of ppl, the founders are usually inaccessible. Even if they are, they're too busy to answer questions from common plebs so I can't evaluate the project's most important metric.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
And either way, there's so much hysteric positivity that it's really hard to get a sense of the actual value of the project, to "assess it fairly". I have no idea what the project might be worth eventually.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Investing in mega-hype is just a gamble.
The second reason is, it's a very crowded market right now. Everyone has been banging on the GameFi drum for months. There's a bajillion projects launching. Most of them, as usual, will go to zero. More of them than in other spaces, because of the competition.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
How many P2E Pokemon clones do we need? We already have Axie. Maybe that can be improved a little, but almost every P2E project I see is basically Axie in different clothing.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
I know the NFT space is keen on copying things, but c'mon. Have some decency, lol. Try sth new.
Pokemon clones are the higher end stuff in P2E. At the lower end you have nakedly game-free "p2e games" like the wolf game where literally the only thing you do is find out if you won money,.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
They're basically slot machines for NFTers.
P2E is a super-busy space full of identical projects and hype... and it's hard to tell winners from losers. This does not make a winning combination.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
These two factors would be enough for me to not invest in P2E casinos even if some will do well.
But that's not all.
A third reason is because, quite simply, as a gamer, the games just aren't good, and not games I like at all.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
So I also don't invest in pokemon clones for the same reason I wouldn't invest in Farmville or The Sims. Both are very successful games, but I can't stand them.
You might say "but surely if it makes money that's all that matters".
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
No ser.
It matters to me to invest in things that I want to see more of in the world. I don't want to see more dumb slot machines for dopamine zombies. So I don't invest in them.
I don't think the P2E space is capable of coming up with a game that's not as unpalatable as Farmville. I'd love to be proved wrong, but it won't be with a handwavy "this one is really different! It has... <insert pointless words>!".
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
My very first interaction with a computer, in 1987 or so, when I was 7 years old, was with a game (called LARN).
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
My first computer was a C64. Came with 100+ games on floppy disks.
I've played... a *lot* of games.
I still play games, though more rarely.
I know what a good computer game looks like. I love good video games to this day. And so I can tell when I'm being served reheated garbage rather than haute cuisine.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Everything I've seen in P2E so far looks like reheated garbage to me. No originality. Not much fun either.
Until I see a game that at least can make me believe that it might actually be fun to play, like, genuinely, like games like...
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
- The Last Of Us
- PixelJunk Monsters
- Life Is Strange
- Civilization
- Warcraft
- WoW
- Baldur's Gate
- Starcraft
- Trine
- Diablo
- Among Us
- ...
- Xcom
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
- Flight Control
- Plague Inc
- Plants vs Zombies
- World of Goo
- Limbo
- Doom
- Hearthstone
- ...
These are *all* games I've played and loved for many hours. Many are from small studios and didn't cost $100m and aren't "AAA" games. But they're all *GOOD* games.
When I see a P2E game that makes me think "oh that sounds like fun, I'd like to play this" - maybe I'll invest.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
So far my tally of such games in the P2E space is a big fat zero. The closest was that Snake game, but the economics didn't work out.
So I'm not investing in it.
A fourth and final reason I won't invest in P2E is because, even if it is true that some day, someone will build a genuinely fun game that also has earning elements... I think that's extremely hard and it's unlikely to come from the current crop of projects.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Most P2E projects are just cashing in on a meta trend. There's a lot of hype around GameFi, so ppl are like, ok, let's start a gaming NFT project. And the obvious thing to do then is a P2E game with collectible pokemon or whatever. They're optimising for the money.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Building a good game is like balancing a card castle on a suspended platform. So many things that need to be carefully thought through, tradeoffs, mini games inside mini games, dopamine boosts and serotonin rushes and all sorts of little things that make the game really good.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
Building a good game with crypto incentives built-in, is like trying to build that card castle with a wrecking ball swinging madly around.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
It's just made something really hard into something insanely difficult.
Someone will crack it, of course, but it's gonna be a while.
And I doubt it will be someone who's optimising for following the hip GameFi trend to raise more money. The formula that finally cracks it is much more likely to come out of left field from a project like Loot than from Axie Clone Number 10392.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
So that's it for why I don't invest in P2E at the moment. I might trade it, but hold it long term? Nah.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
- It's just casinos mostly
- Too much hype
- Too much competition
- The games aren't good enough
- Building an actually good game is too unlikely
Because of all those factors, I think most of the P2E games, by a long shot, will go to zero sooner or later. The only thing sustaining them will be ponzis, and when the ponzi money runs out, the game will die.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
If you won't hold it for 10 years, don't hold it for 10 minutes.
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
In the NFT space I adapt that to: if you won't hold it for 2 years, don't hold it beyond a safe quick flip.
I will be surprised if any of these games is still around in 2y.
What about Metaverse?
— Daniel Tenner (swombat.eth) (@swombat) February 8, 2022
I think for that one you'll have to come back tomorrow, because I have an actually fun game to play now - DMing a Curse of Strahd D&D game. No one will earn any Eth for playing it, but I assure you fun will be had.
Well, in a Strahd sort of way.
gm & gl! pic.twitter.com/reF1KFzGZg