GameFi crisis: what’s really happening with STEPN and Axie Infinity

The prolonged decline in the cryptocurrency market has affected the entire crypto industry. Investors had expected that GameFi would survive this crisis more easily due to the popularity of games and the economic stimulus of earning tokens (play-to-earn model). But recent events show that this industry seems to be failing. In this article, we looked at two of the most popular projects, STEPN and Axie Infinity, which are going through tough times right now.

STEPN is laying off?

STEPN, the most popular blockchain-based app for monetizing running and exercise, has been forced to lay off its staff. However, despite numerous reports about the firing of a large part of the staff, there is an unverified disproof of these cuts (specifying that only volunteer moderators were affected by the cuts). 

Meanwhile, the company’s official Twitter has no denial or confirmation for either the first or second message. We sent an inquiry to the company to clarify this situation.

Update with official answer

We deny the rumour that STEPN has been laying off staff due to the bear market. These are baseless claims that are factually inaccurate. We pride ourselves in being transparent with our community and we are choosing to address these rumours head-on to avoid any further speculation on falsehoods.

The reality is that STEPN has parted ways with volunteer MODs who have not been active in the last few weeks and months. In regards to our staff, STEPN is actively hiring for several roles so inquire here to be a part of the team! https://stepn.freshteam.com/jobs

We at STEPN are disappointed that we even have to address baseless rumours, but we will continue to do what we do best. We remain strong and continue to build, grow and evolve despite the bear market. Keep STEPN.

Opinions of ordinary users

Meanwhile, it’s no secret that the company is in trouble. Experts say that the company’s tokenomics at least requires a pivot of its model. There is a lot of fresh negative feedback on Twitter that STEPN no longer generates money. 

Against the background of the smooth life of the project’s founders, it is especially painful for ordinary users to see the drop in the project’s coin rate:

#Stepn founder bought a villa, crypto is full of scam. It is a terrible market for investors. #GMT #DOGE #CHZ pic.twitter.com/GHjYsX3K6H

— CryptoForBonus💰 (@NFTforbonus) October 13, 2022

Some people invested all their money into STEPN in the hope of earning (at the beginning, the project did give huge profit):

@Jerry10240 @cz_binance @Stepnofficial @solana @GMT_Token @GST_Token Sir, we have spent lakhs of rupees in this project, we have invested our entire life's earnings in this sir, you do something, plz we have lost lakhs

— IQBAL PATHAN KHAN (@qbBKtPtN1) October 13, 2022

Even quite loyal participants believe that the project created discriminatory conditions — by luring newcomers, STEPN put older participants in disadvantageous conditions:

https://twitter.com/khanjiCreations/status/1580206094626193408

An influencer who worked for the project for a long time is leaving the project and also confirms this problem:

https://twitter.com/khanjiCreations/status/1580502455615655936

In general, players massively confirm that not only STEPN stopped bringing profit, but with Axie Infinity, the situation is entirely similar.

I was in loss and stepped out. Because Axie Infinity and SLP gave me the same lesson. Pyramid type schemes won't sustain.

— hottie.bnb (💙,🧡) ❤️ Memecoin (@hottiebnb) October 12, 2022

 

Speaking of Axie Infinity

Axie Infinity has become the second popular NFT gaming project to suffer from crypto winter. According to the September game activity metric, the average monthly number of players on the platform fell to the January 2021 level of 701,477. This number is 74% lower than the highs at the beginning of this year. 

However, analysts believe that players are leaving not just because of the crypto winter and the 95% drop in the service token. Axie Infinity’s developers wanted to balance the tokenomics and unsuccessfully changed the monetization of the gameplay, discouraging newcomers and regular players.

As a result of these significant changes, the average volume of Axie’s coins sold for monetization dropped from 2 million to 311,000 coins in one month. 

But why so much noise?

In the past, these two blockchain games allowed for steady earnings of sums that exceeded the average minimum salary in developing countries. Many people quit their jobs and became involved in the game over many months, now finding themselves in an extremely difficult situation. This is one of the main reasons why Axie Infinity and STEPN are so hated now.

Certainly, both projects are going through tough times right now after skyrocketing at the end of 2021. Due to the long crypto winter, GameFi projects are rapidly losing their user base, and the future is highly doubtful.