22 March 2025
To some, blockchain technology is the future of finance; to others, it’s an overhyped enigma. Many struggle to define it, yet proponents of the technology believe it will change the way we conduct business, secure valuable data, and interact with digital assets. Despite blockchain’s potential to create positive change in financial markets and data security, its widespread adoption in other sectors reveals a more troubling reality. In particular, the rise of Play-to-Earn (P2E) NFT games has exposed the darker side of blockchain technology, where vulnerable players in developing countries are exploited for their labor under the guise of financial opportunity. This exploitation, which mimics a new form of colonialism, raises significant ethical concerns about the true cost of this digital revolution.
A “blockchain” can be thought of as a digital record that safely records transactions in bundles of information that are connected in a chain. These blockchains use mathematical algorithms to encrypt data so that only authorized users can access it. Blockchain’s most notable and popular function is supporting cryptocurrency. Because cryptocurrencies are decentralized, investors have faith in the security of blockchain transactions since each transaction is recorded on a digital ledger or contract that is subsequently added to the larger blockchain network. Many people are investigating blockchain technology for managing different kinds of digital assets because of its believed potential to be a safe way to store transaction data.
Blockchain has been adopted by several humanitarian organizations. For instance, the Kenya Red Cross Society has explored how blockchain can strengthen the monitoring of aid distribution.[1] By using digital contracts, blockchain ensures that funds or benefits are directed to the intended recipients. Improved communication between large humanitarian organizations, donors, and recipients in developing countries can help facilitate faster aid delivery. Humanitarian groups believe the use of blockchain eliminates the need for third-party oversight because it ensures secure transactions without the traditional security concerns. The World Food Program (WFP) introduced the blockchain-based Building Blocks program in Jordan to transfer cash to 10,000 Syrian refugees in the Azraq Camp in a secure and streamlined manner [2]. The Building Blocks platform stores all necessary information about the recipient and allows refugees to use the biometric data for making purchases.
Blockchain technology is also used to create non-fungible tokens (NFTs), which are unique digital tokens linked to specific assets on the blockchain. These assets can include artwork, music, trading cards, and more. Each NFT is associated with a particular cryptocurrency, which determines its value and exchange rate. One of the most troubling uses of NFTs, however, is in “Play-to-Earn” (P2E) games. These games allow players to earn cryptocurrency through gameplay, which can then be exchanged for traditional currency. As players progress through the game, they acquire digital assets in the form of NFTs that can be sold on blockchain-backed marketplaces. These platforms facilitate secure, high-volume transactions between players. These types of games, while seemingly offering financial opportunities, often exploit vulnerable players by embedding them in a cycle of labor and speculative investment, where the real profits are concentrated in the hands of developers and investors. In some countries, cryptocurrency earned through P2E games constitutes a significant portion of national cryptocurrency ownership. For example, the Philippines ranks second globally, just behind South Africa, with around 52 percent of its population owning cryptocurrency [3]. Much of this is driven by the success of the P2E game Axie Infinity.
In Axie Infinity, players collect and battle creatures called “Axies.” Winning battles rewards players with a cryptocurrency called SLP, which can either be exchanged for traditional currency or used to purchase upgraded Axies [4]. This creates a cycle where players invest their SLP to acquire stronger or rarer Axies in order to win more battles and earn more SLP. The game promotes itself as a fun and stress-free way to make money. At its peak in 2021, Axie Infinity had about 2.8 million active players in the Philippines.
Axie Infinity was created by the Vietnamese game developer Sky Mavis. While the game may appear to offer a legitimate opportunity for people to earn money, the reality is far more complex. To begin playing Axie Infinity, a player typically needs to invest around $150 USD to acquire a sufficiently strong Axie to start winning battles and earning SLP cryptocurrency. This upfront cost is out of reach for many low-income players which then forces them to rent an Axie from third-party programs. These programs capitalize on the fact that many players cannot afford the initial investment. As a result, players who rent an Axie must dedicate long hours to earn enough SLP to pay for the rental and, hopefully, make a profit. This creates a cycle where low-income players are caught in a system that requires considerable time and effort just to break even. This is problematic because it prevents players from ever actually making a profit, trapping them in a cycle of labor where they struggle to meet basic costs without any real opportunity for financial growth.
The developers of Axie Infinity target their advertising primarily at low-income countries, such as the Philippines and Venezuela. In places like Venezuela, which is struggling with hyperinflation, Axie Infinity is promoted as a way to earn significant amounts of money outside the constraints of the local economy. As a result, Venezuela has become Axie Infinity’s second-largest player base. While some players in these countries may earn money that significantly improves their quality of life, the reality for most is that Axie Infinity operates like a typical ponzi scheme. The more players engage with the game, the more SLP cryptocurrency they generate. As more players collect SLP, the cryptocurrency’s value rises, much like Bitcoin or Ethereum. However, SLP can be bought and traded just like any other cryptocurrency, and you don’t need to play the game to invest in it. The developers of Axie Infinity effectively use players from low-income countries as cheap labor to inflate the value of the cryptocurrency, making it more attractive to outside investors.
The targeting of the low-income countries by these major blockchain companies can be seen as a form of techno-colonialism, namely a sort of “crypto-colonialism” where the player base is serving the interests of these major crypto investors while being economically exploited. Axie Infinity turns play into labor while disguising labor as freedom and absorbs even leisure into an economic system that demands constant productivity. What appears to be an open, decentralized opportunity is in fact a controlled, extractive cycle where participation is framed as empowerment, yet players remain trapped in a precarious grind. The promise of financial independence by games like Axie Infinity masks deeper dependency on speculative markets, where wealth is funneled upwards while those at the bottom are left chasing diminishing returns.
In 2023, following widespread news coverage and public backlash, Axie Infinity experienced a significant decline in player count, particularly among Filipino players [5]. This drop was driven in part by changes that made it more difficult to level up, requiring players to invest even more time and effort. Even though Axie Infinity’s player base has drastically decreased, the persistent threat posed by other NFT games that use similar exploitative tactics is not lessened by Axie Infinity’s isolated crash.
Regulating NFT-based games presents a complex challenge due to their decentralized nature, which stems from the complexities of blockchain technology, and their multinational reach. This raises the question of whether consumer protection laws should be the responsibility of national governments where these games operate or if international organizations like the World Trade Organization or the United Nations should take the lead. As a result, no countries where NFT games are exported or imported have taken significant regulatory steps to address the exploitation of players within these ecosystems.
A targeted solution is the creation of Digital Labor Standards for NFT gaming, ensuring that earning mechanisms are transparent, in-game currency distribution is stable, and players receive fair compensation. These standards could include fixed minimum payout rates, protection against algorithmic wage manipulation, and a requirement for games to disclose financial risks upfront. Regulators could enforce compliance by requiring NFT games to disclose their blockchain smart contracts and revenue distribution models before allowing their tokens to be listed on major crypto exchanges, ensuring that only games with transparent and fair practices can access mainstream liquidity.
To further rebalance power, NFT games could integrate Decentralized Autonomous Organizations(DAOs) where players collectively govern in-game economies. Unlike traditional game development models, where companies can alter rewards, devalue assets, or introduce hidden fees, DAO-driven governance would let players vote on how rewards are distributed, how in-game currencies are managed, and which economic policies to implement, preventing predatory practices. Developers could be mandated to automate major economic decisions through immutable smart contracts, reducing the risk of centralized manipulation. However, to avoid governance monopolization, weighted voting limits and anti-whale measures would be necessary to ensure equitable decision-making.
These measures could serve as crucial steps toward safeguarding players in the rapidly growing NFT gaming ecosystem. By establishing clear protections against exploitation and empowering players with a voice in economic governance, a more equitable and sustainable environment could be created, providing a fairer and more just future with blockchain technology, avoiding it as another tool of exploitation and corporate control.
Image via Pexels Free Photos
Works Cited
[1] “Blockchain Technology in Humanitarian Programming: A Pilot Project in Cash Transfer Programming in Kenya.” Kenya Red Cross Society, 2018. Accessed January 27, 2025.
[2] “How Blockchain Technology Helps Refugees Shop in Conflict Zones.” World Food Program USA December 23, 2020. Accessed February 13, 2025
[3] “Cryptocurrency Ownership in the Philippines in 2024.” Festive Pinoy, December 2024. Accessed February 13, 2025
[4] Chow, Andrew, and De Guzman, Chad. “A Crypto Game Promised to Lift Filipinos Out of Poverty. Here’s What Happened Instead.” Time. July 25, 2022. Accessed January 27, 2025
[5] Larson, Stefan. “Axie Infinity Live Player Count & Statistics 2025.” Priori Data, January 4, 2025. Accessed February 13, 2025
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