NFTs Are Becoming a Major Source of Income for Crypto Newbies in the Philippines to Colombia
Before April 2020, Paul had never purchased cryptocurrency, let alone even heard of an NFT. Less than a year later, his NFT trading profits have netted him around 17 times the yearly minimum wage in his native Colombia (around $3,100 annually) and allowed him to buy his first house. He isn’t the only one, either. …
Before April 2020, Paul had never purchased cryptocurrency, let alone even heard of an NFT. Less than a year later, his NFT trading profits have netted him around 17 times the yearly minimum wage in his native Colombia (around $3,100 annually) and allowed him to buy his first house.
He isn’t the only one, either. In developing countries around the world, NFTs are offering an unprecedented avenue for income during a global pandemic.
Non-fungible tokens are unique, non-interchangeable tokens used to represent digital property stored on-chain. NFTs have boomed in the past couple months, with single tokens from renowned artists and musicians selling for hundreds of thousands or even millions of dollars. But Paul’s story shows it’s not just celebrities benefiting from this new technology.
Paul on Sorare
Paul, who goes by “Gocka” on Twitter, specializes in the officially licensed Global Fantasy Football (American soccer) NFT trading card game, Sorare, which allows players to collect and build teams to compete against one another.
Paul started out in April with an $80 euro deposit after a friend insisted that Sorare would be a good way to make money based on his interests in football and financial markets. He was scared, as it was a lot of money for him at the time.
“It is really important to understand that I am risk averse,” said Paul, who graduated from school with a degree in International Trade. “I don’t take financial risk. I only buy value.”
Learning the Market
Initially, Paul was shocked at the high prices that so many cards fetched.
“An unknown goalkeeper [from] Belgium for 30 euros? Who will buy that card,” he wondered.
But after giving himself some time to study the market, Paul discovered that he had a knack for picking out valuable buys. After making a bit of money on a few good trades, he decided to take Sorare seriously and invest some more. By August, he was trading constantly, and other people were reaching out offering him money to manage their accounts, too.
Then, in January, Paul decided to sell his gallery and cash out for 42 ETH. Within just a few months, he had managed to turn an investment of under $5k into over $65k gross profits.
He says that his gallery would have been worth over 150 ETH if he had waited until February, but that he doesn’t regret taking the money out when he did as he was able to take a vacation and buy a house. As of March, Paul had rebuilt his Sorare collection.
Paul plans to leave his day job in the near future. “[Sorare] can actually be full-time work if passionate people are willing to enter the market,” he said.
In the Philippines, Axie Infinity, an Ethereum-based collectible monster game, has developed a dedicated following of players who farm the game as a means of supplementing income.
(A group of people playing Axie Infinity in the Philippines – Photo Credit: Emfarsis Pte Ltd.)
“For context, the minimum wage here is a little over $200 a month,” said Gabby Dizon, a Philippines-based Axie community member who co-founded Yield Guild, a gaming guild centered around training people to farm “play-to-earn” games. “It’s not a high amount, but for the people here, being able to earn maybe $300, $400 is basically life-saving for them.”
In Axie Infinity, every in-game asset is an NFT, including items, plots of land, and the titular Axie creatures themselves. Through various gameplay mechanisms, such as winning competitive Axie battles, players can earn Small Love Potions (SLP), an ERC-20 token that also functions as an in-game currency for breeding new Axie monsters.
SLP trades on Uniswap, giving it easily convertible monetary value. Since the beginning of 2021, the value of SLP has grown 200%, from around $0.02 in January to around $0.06 in April.
According to data on DappRadar, Axie Infinity is the most popular game on Ethereum, with over 23k active users over the past month (measured by the number of unique wallet addresses interacting with the dapp). Dizon estimates that around 80% of these players live in underdeveloped countries including the Philippines, Indonesia, and Latin America.
Yield Guild operates primarily through Discord and Facebook.
Community leaders guide new players, many of whom are entirely new to the crypto space, through basics like setting up an Ethereum wallet and onboarding to the game, to actual gameplay elements like battling and farming currency.
(Axie Infinity – Photo Credit: Emfarsis Pte Ltd.)
Yield Guild also owns and breeds Axies to lend out to some new players as “scholarships,” removing most of the upfront costs normally associated with starting the game for people who can’t afford it on their own.
Regular guild members keep 70% of the SLP they produce, with 20% going to the community leader who taught them, and 10% going back to the guild (which Dizon says is mostly eaten up by gas fees right now).
Especially adept players can become community leaders themselves.
Covid lockdowns played a major role in Axie’s popularity in the Philippines.
“A lot of people were laid off, stuck at home, no work, getting hungry,” said Dizon. “Then word started getting around that there was this game you could download and play and actually turn it into real money.”
It sounds too good to be true, so Yield Guild initiated a campaign for their players to display the results of their Axie earnings using #salamataxie on Facebook. “Salamat” is Filipino for “thank you.”
(A man playing Axie Infinity on a bike in the Philippines – Photo Credit: Emfarsis Pte Ltd.)
“People started to share pictures of mothers providing for their baby’s needs, fathers who bought [a] motorcycle, families getting together, house renovation, sons and daughters buying gifts for their parents,” Kookoo, a Yield Guild community leader who also posts crypto gaming content on YouTube, told The Defiant.
Prior to the pandemic, Kookoo worked in the travel agency business providing tourist services in Philippines’ Cebu province. Business had been booming, but after mandated Covid lockdowns hit, his industry was forced to shut down. KooKoo had a little bit of money in crypto already, so he reinvested it into breeding more Axies to sell and loan out for “scholarships.”
“Now, Axie is our primary source of living,” said Kookoo.
To be sure, most players don’t earn enough to make a full-time living.
“It’s not consistent because it depends on several factors,” said Dizon, citing win rate and time spent on the game as examples. “You have to be a good player or you have to play a lot, and at least win enough.”
Market price fluctuations of SLP can affect profit too, leading some players to stack their SLP until the price is high, and then sell.
Axie farming’s long-term viability is yet to be seen post-pandemic, but in a struggling economy,any form of potential income can be a game-changer, especially when that income can be earned from the safety of home.
At least for now, NFTs hold that potential.
[UPDATED APRIL 7TH @ 12PM EST TO CORRECT “SALAMAT” SPELLING]
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