Investing in play-to-earn games such as axie infinity game is better than merely spending money on in-game purchases in other online video games that would yield no returns.
The associate vice president for investment instruction of the Junior Fellowship for Financial Literacy – an organization formed by Ateneo de Manila University students – stressed a list of things that must be considered and evaluated before investing in axie infinity game.
Generally, people need to know their objective and risk tolerance level. For me, the first thing you must consider before you enter any investment is the risk. How much are you ready to lose, and how comfortable are you to lose?
As an investor, I warned against making decisions based only on the hype toward a product. And, it is not wise to jump on the hype. You can earn through hype because you go along with the trend you make with people, but you may be constrained without a proper exit plan.
The price volatility of cryptocurrencies must also be considered as they are harder to predict than stocks. Early in the second quarter of the year, the SLP soared to a rate of P20. As of Sept. 14, 3:00 p.m., the SLP was valued at P4.40.
Axie Infinity seems volatile, and that’s the scary part. It can be unpredictable sometimes, so you cannot make a long-term plan for it if that’s the case. It is easier to create long-term goals than stocks because you have the fundamentals.
Overall, some financial experts believe axie infinity game is risky, considering it was created in 2018 and has only recently gotten the hype in the market. Although you could earn a good passive income from it, the problem is it’s not always about the returns.
Suppose you are a potential manager or scholar. In that case, you need always to treat whatever money you are making from axie infinity game only as a “blessing” or a backup source of income, even if your earnings from it tremendously exceed your primary source of income.
Axie Infinity’s two-year history is enough for it to gain credibility. As an expert in the cryptocurrency world, I am used to assessing the risks of whatever wants to take my money. Axie Infinity has been operating since 2018. That’s already four years. Come to think of it; there must have been players since then. They have not shut down either. The developers are still working, and the game is still gaining popularity.
What are the risks involved?
The game would be more stable if threats on the system were handled well. Cyberattacks such as DDoS can halt a site’s operation by flooding it with several malicious traffic.
Meanwhile, other controllable risk factors also threaten axie infinity game players, such as getting banned from the game. That is his top-most concern. An individual playing on multiple accounts is among the grounds for getting banned.
With the scholarship, the main risk is having your account banned. When your scholar’s account gets banned, even the manager’s account would be banned as well, which is why you still need to hesitate to take in scholars from people you don’t know.
Aside from getting banned, players should also fear having their wallets hacked through phishing. A social engineering attack is often used to steal user data, including credentials and credit card numbers.
Phishing scams are prevalent when it comes to cryptocurrencies. That is why you need to be careful of the links you click, as well as the cryptocurrency sites you visit. You also need to be cautious of Ronin Wallet.
Ronin Wallet is a Google Chrome extension that allows users to play axie infinity game and other decentralized applications running on Ronin, an Ethereum sidechain explicitly built for blockchain games. Ronin Wallet and Metamask are two crypto wallet accounts needed to cash in and convert Ethereum to Axies.
What are the Regulations?
In the Philippines, where their minimum wage falls between P316 and P537 per day, Axie Infinity has presented itself as an appealing option to expand families’ declining economic capabilities amid the pandemic fallout.
The primary reason was how taxes were not deducted from their generated income. However, recent reports said the Department of Finance (DOF) recognizes transactions made from axie infinity game as taxable.
Based on reports, Finance Undersecretary Antonette Tionko said the cryptocurrency earned from the game is taxable. However, the government is yet to establish a mechanism to collect taxes from digital assets.
However, she disclosed that both the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) have yet to decide if an “Axie” would be characterized either as a security or a currency. She said its characterization would determine how it should be taxed.
Sky Mavis has not yet registered in the Philippines. Both the SEC and BSP earlier said they are still studying the regulatory touchpoints regarding Axie and that they are not yet requiring the company to register. Sky Mavis told players in a statement a month ago to comply with their home country’s regulations and tax rules.
Under the law, a foreign entity must secure prior registration with the SEC if they want to do business in the country. By registering, their onshore operations will be subject to Philippine tax laws.
If individuals decide to transact with unregistered entities, the SEC said the government could offer little to no protection against harm and any form of misconduct from these companies.
Plans to impose taxes on earnings from axie infinity game have since triggered adverse reactions from the Filipino Axie community. They also wondered how the government would track those earning from the game if the nature of cryptocurrency allows anonymity.
Finally
Despite people’s high level of interest in cryptocurrencies, Miranda asserted that skepticism toward them will always be present. I encourage you to understand cryptocurrencies and how they work before assuming that investing in axie infinity game is a scam, considering its prerequisite of buying at least three Axies before getting started.