Infiltrating cryptocurrency game farms, a boon for Filipinos?

Author: Eli Tan

Compiled by: Ehan, Wu Says Blockchain

Recently, about 20 people crowded on the second floor of Joniel Bon's newly opened internet café in Quezon City, 10 miles from Manila. They sat in front of computers equipped with 34-inch curved monitors, starting to play games like "Heroes of Mavia" and "Nifty Island," while music from Taylor Swift and Maroon 5 played in the background.

Playing these games can become a full-time job, and some of Bon's customers have settled in, munching on pizza to recharge. These games reward players with cryptocurrency for completing daily small challenges. Typically, players exchange their tokens for the country's currency, the peso, earning about twice the daily minimum wage of $11 in the Philippines.

(A café named NFT X Street)

40-year-old Bon has always dreamed of his business thriving; however, two years ago, when the crypto market crashed, his hopes for a booming gaming community were dashed. Now, Bon's new internet café shows signs of a resurgence in cryptocurrency in the Philippines, which has long been a hub for crypto activity. This month, Bitcoin hit an all-time high, marking the end of the 2022 market crash recovery and driving the resurgence of cryptocurrencies like Ethereum.

New billboards for cryptocurrency companies have appeared all over Manila. People have started harvesting virtual crops from a crypto farming game called Pixels as a new source of income. Overseas Filipino workers are also returning home to earn cryptocurrency through the metaverse.

(Players in the internet café checking their crypto wallets)

(Anime figurines decorated in the internet café)

According to data from Chainanalysis, cryptocurrency trading volume in the Philippines increased by 70% month-on-month in November and December, reaching $7.3 billion. Game developer Pixels reported that the number of Filipino players surged from 80,000 in November to over 830,000 in March. Additionally, about 30% of global crypto gamers come from the Philippines.

(Joniel Bon on the left)

The resurgence of activity has raised concerns among some Filipino officials. At a cryptocurrency conference in Manila last November, Kelvin Lee, then a commissioner of the Philippine Securities and Exchange Commission, stated that the government is working to address how to regulate the technology as cryptocurrency becomes popular again.

In the past, cryptocurrency was a center for fraud. The tokens issued by crypto games are more volatile than Bitcoin and Ethereum, meaning this boom could collapse again.

Lee stated, "We want a safe operating space," while acknowledging that a strong cryptocurrency industry could benefit the Philippines, which heavily relies on outsourced customer service and IT jobs. "If the industry space itself looks chaotic, disordered, and illegal, how can you operate well?"

Lee declined interview requests after leaving the commission this month. Last month, the Philippine central bank told local media that it plans to launch its own digital currency in the next two years. During the pandemic lockdowns, cryptocurrency became particularly popular in the Philippines. Although over 40% of the population lacks bank accounts, most Filipino households have internet access, allowing cryptocurrency to spread to rural areas. During the lockdown, people began playing the Play-to-Earn game Axie Infinity, developed by the Vietnamese company Sky Mavis. In this game, players battle Pokémon-like characters to earn a token called Smooth Love Potion.

(People playing Axie Infinity, photo source Jam Sta Rosa/AFP)

At its peak in 2021, Smooth Love Potion was accepted as a payment token by landlords, gas stations, and some restaurants in the Philippines. However, a year later, when the crypto market crashed, thousands of Filipinos lost their savings in Smooth Love Potion. Characters in the game could once be traded for thousands of dollars, so valuable that some Filipinos even took out loans to buy them. However, when the cryptocurrency market collapsed, these characters became worthless. "When everyone was entering the game, it was running very well," said 30-year-old farmer Ian Dela Cruz, a former Axie player. "But when everyone tried to exit, the game stagnated."

(Former Axie player Ian Dela Cruz stayed in the crypto industry and became a game streamer on Twitch)

Some Filipinos who successfully made their first pot of gold through Axie have become entrepreneurs, establishing their own companies and gaming collectives known as "guilds," which continue to grow. Teresa Pia, 27, a former Axie player, quit her job as a kindergarten teacher in 2021 to run a crypto gaming guild called Real Deal, which has 54,000 members on the social media platform Discord. Pia stated that she views her Discord channel as a "new classroom," where she teaches many overseas Filipino women how to trade and invest in cryptocurrency. With the resurgence of cryptocurrency, many women have now earned enough money to return home and reunite with their families.

(Former Axie player Teresa Pia teaching members how to trade and invest in cryptocurrency on Discord)

Pia said, "The money they receive may seem small, but when converted to pesos, it's a lot for them." Dela Cruz stayed in the crypto industry and became a game streamer on Twitch, a streaming platform owned by Amazon. He is now the captain of one of the largest esports teams in the Philippines. He said many farmers have started playing Pixels and harvesting virtual crops to earn cryptocurrency as extra income. The game's American founder, Luke Barwikowski, stated that Filipino farmers have provided him with suggestions on how to make Pixels more realistic. "Some users directly provide us with their crop schedules or watering habits."

Even by crypto standards, the industry in the Philippines is rife with opportunists. Phishing scams are rampant in the online crypto community on platforms like Discord and X, as are "pig butchering" scams, where scammers target victims with fraudulent messages. Former players have stated that during Axie's heyday, some guild leaders exploited vulnerable players, taking half of their earnings as membership fees. Bon believes that, in addition to providing computers and resources for guild members, his role is that of a protector. "That's family."

(The Dela Cruz family's farm in Pampanga province, where many farmers have started playing Pixels)

While cryptocurrency is a boon for many Filipinos, some say they can turn to other opportunities if the industry collapses again. Dela Cruz dreams of managing more farms with his brothers without relying on cryptocurrency for income. He said, "Fresh air, the sound of chickens, you can't find that online."