Are Scams a Prelude to Web3 Games?

‘Scams’, ‘fraudulent’ or ‘nefarious’ activities have been a part and parcel of the Web3 gaming domain since its inception. While the Web3 gaming industry started almost 10  years back, its development and its looming scams spread like wildfire.

Talking about the nefarious nexus, many GameFi projects often launch regardless of the game’s development stage. A case in point, the fall of 2021 witnessed one of the biggest GameFi scandals when the ‘Squid’ cryptocurrency based on the Squid Game show collapsed to almost zero after rising to $2,800. To participate in the game of six rounds, users had to pay with Squid Tokens. While the game was scheduled to launch in November, the plan fell flat when at the time of the token’s release, users noted that it was impossible to sell the purchased currency.

The discovery of no official connection between the token, Netflix and the authors of the series raised eyebrows about a possible scam. With such news making rounds, the scammers immediately withdrew $3.38 million in total.

However, it didn’t deter the investors and other stakeholders from being inclined to and involved in the world of Web3 games even till today. So, before making a leap into the Web3 gaming project, dive right into some major and important details that define its course.

5 ways to spot scam Web3 games

The cornerstone of a GameFi project are the founders. So, their background check and past experiences are vital for consideration. Marketing and technology are the two pillars of the project, hence all the activities around their promotion, benefit distribution and market opinion must be kept under the radar.

While all this may seem to be a Herculean task, they must not be ignored keeping in mind the pie-in-the-sky promises from Web3 gaming token projects, as scams tend to revolve within. Although the list is endless, listed below are some of the most crucial factors that can help you spot the black sheep. Irrespective of the kind of association that you may develop with any Web3 gaming project, ensure that its a green signal at every step.

1. Background of the team

It takes a village to plan the Web3 scam games. Therefore, extensive research on the following is necessary:

  • Track record of previous projects by the founders
  • Past projects and experiences of game developers
  • Project managers and other departmental heads 
  • Key investors or stakeholders

Wondering why? Because, scammers lure amateur users or investors into their trap with catchy advertisements, landing pages and beautiful sites.

However, there are many projects in GameFi that are launched by anonymous people. Little to no information can be found about them because they are hidden behind pseudonyms. Therefore, pay close attention to all the background details of the team.

2. Reviews on professional platforms

Marketing gimmicks like attractive social media presence, websites, newsletters etc are quite common in Web3 gaming projects. But, one should rather switch to independent professional platforms to get authentic feedback. While the blockchain community is quick in responding to the advent of new projects, scammers are a step ahead in adapting and deceiving all. Skim through the list of shill activities done by scammers that you must stay ahead of:

  • Positive reviews about the company on third-party websites
  • Pre-registration of hundreds of accounts on large forums disguised as real users.
  • Floating newsletters and fabricated text about the project at a point of time from several accounts to create a buzz 

3. Stealth Marketing & Network Marketing

The world of Web3 games swings on the hinges of ‘Stealth Marketing and ‘Network Marketing’ ’. This might seem Greek to you, but unknowingly everyone becomes a part of it. Majority of the Web3 gaming projects:-

  • Generate pre-launch interest in their games by creating a buzz through multiple Telegram or Twitter accounts
  • Create a large network of followers and members and roll out favourable conditions to help grab the mindshare of the targeted group, then making them crave for the game. 

But, you must be wary of the number of people involved by their activity in chats and comments and the nature of the messages. Because a lot of Web3 gaming projects would turn out to be a boat without an oar in the long run if their only source of income is network marketing. 

4. Details of the smart contract

The project’s smart contract is another pivot to its success. And, an effective way to check the project’s smart contracts is to use any block explorers like Etherscan, BscScan, BlockCypher, EtherChain and many more

You can fetch all the important information such as:

  • Start date of the project 
  • Number of users
  • Number of tokens launched
  • Number of transactions
  • Links to previous and next transaction (both input and output)
  • Current and historical address balances

5. Vision and future income of the project

Every Web3 gaming project is established to make money. But, it is not true for all projects when the time comes. Therefore, it is important to understand where the added value will come from and how. You shouldn’t invest until the source of a project’s profit is known and duly verified.    

The Bottomline

Majority of the scam gaming projects often look rosy with their impressive landing pages and a token listing on a major crypto exchange. But, they eventually turn out to be a mud stack when their veil of fake partnerships, showcase non-existent employees, and stolen 3D renderings comes off.

In a nutshell, investing in a Web3 gaming project without due investigation is like throwing spaghetti on the wall and expecting it to stick. So, stay ahead of the scammers and toxic gaming projects with your diligent research.

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