Tap-to-earn games are thriving but their tokens face potential risks

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As a seasoned crypto investor with a keen interest in the blockchain industry, I have witnessed firsthand the meteoric rise of tap-to-earn platforms in recent times. With Notcoin leading the charge and amassing an impressive market cap of over $1.6 billion, it’s clear that this sector is here to stay. However, I also recognize the lessons we can learn from the past experiences of play-to-earn and move-to-earn platforms.

The sector of “Tap-to-Earn” in the blockchain industry is experiencing remarkable growth at an unprecedented rate, with major platforms amassing large user bases totaling in millions.

Notcoin, one of the first tap-to-earn platforms to launch an airdrop, has seen its market cap jump to over $1.6 billion, making it the 50th largest crypto in the industry by market cap. Notcoin is not alone as Hamster Kombat accumulated over 230 million users and almost 33 million YouTube subscribers in less than two months. Its videos have accumulated over 600 million views.

As an analyst, I’ve noticed that TapSwap has experienced significant growth, with a user base of over 63 million people. Among these users, approximately 20 million engage with the platform on a daily basis. Additionally, TapSwap’s YouTube channel has attracted over 4 million subscribers.

There are other similar platforms to TapEarn that have made their appearance, with some of the most recognized being AvaCoin, DotCoin, and YesCoin.

Based on Notcoin’s evaluation, it is reasonable to anticipate that platforms such as TapSwap and Hamster Kombat will hold substantial value once they become available for trading following their upcoming launches.

Three primary factors have contributed to the substantial expansion of these platforms. Initially, they boast a user-friendly design that only necessitates having the Telegram app installed on your smartphone. Secondly, through social media, these tap-to-earn platforms have gained immense popularity and are reaping the rewards of the network effect. Additionally, all of them extend referral incentives to their users.

As a researcher studying the cryptocurrency market, I’ve observed that some projects offer enticing opportunities for significant gains when they distribute their tokens through airdrops. By participating in these events, token holders have the ability to exchange their digital assets for fiat currency.

Lessons from play-to-earn and move-to-earn

The concept of “Tap-to-earn” games hasn’t been the only viral trend in the blockchain gaming sector. In fact, platforms such as Decentraland and Axie Infinity amassed considerable player bases, numbering in the thousands, during the height of their popularity in 2021 with their “Play-to-earn” models.

Recently, the buzz surrounding them has significantly dwindled, with their highest value tokens dropping by more than 80% from their peak. According to DappRadar’s data, Decentraland attracted approximately 829 unique active wallets (UAW) within the last month, while The Sandbox saw fewer than 2,300 UAW during the same period.

In various other sectors, a similar pattern has emerged. Notable move-to-earn platforms such as Sweatcoin and StepN amassed substantial user bases during their initial stages. However, the value of Sweat Economy’s token has plummeted by more than 95% from its peak, slashing its market capitalization down to $46 million from over $150 million. Similarly, StepN’s GMT token has witnessed a significant decline in market cap, dropping from $2.2 billion to just $318 million.

As a crypto investor, I’ve noticed the surge in popularity of tap-to-earn tokens such as NOT, HMSTR, and TAPS. However, it’s important to keep in mind that these tokens could experience a significant price drop once the hype subsides. The potential risk is that their value may not be sustainable based on their current use cases alone. Therefore, I would advise exercising caution and considering diversifying your portfolio to mitigate this risk.

To address this issue, Notcoin is broadening its approach. Recently, they introduced Notcoin Explore, a venue for debuting Web3 initiatives within Telegram. This platform has drawn in more than 400 projects since its unveiling.

The potential danger for tap-to-earn token recipients lies in their immediate impulse to sell, leading to a downward price pressure. This behavior has gained traction among recent distributions such as zkSync and Wormhole.

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2024-07-10 17:46