People began “farming” game currency in-world as soon as they had large enough economies. This is commonly known as “gold farming” and involves players buying in-game currency with the intent of selling it to “real-world money”.
Game developers often view gold farming as a negative because it allows users to make a living from their game. Most game developers do not like the way gold farming affects their game’s economy. Game developers want to avoid problems with financial regulators because of the regulatory issues that surround real-world currency movements.
Game developers have banned accounts that are associated with gold farming since the beginning of time. We still see large-scale, human-powered gold mining operations all over the globe. These operations are often found in low-income areas and provide both locals with valuable jobs and gaming opportunities, according to Quantum Code.
The Delphi Podcast has a series called Metaverse Musings that focuses on the modern gold farming operations based in Venezuela. Piers Kicks, my good friend from Delphi Digital, speaks with the head of a real Runescape Gold farming operation. It is an engaging listen.
A New Era
We are now in a new era, where gold farming is no longer considered an illegal activity and can be done as a regular business. The blockchain is a global financial system that allows users to create virtual worlds and games. Blockchains allow users to transact and acquire items with any person, with the assurance that their transactions will not be blocked. All game assets, which can be described as native financial infrastructure, are able to make this possible. This allows users to buy and sell from anywhere and at any time.
What does this mean for gold farming in NFT? We are at the edge of a major shift in NFT farming. NFT farming will soon rival early bitcoin mining operations in scale and revenue generation.
NFT farming will not be the same as bitcoin mining. This is because greenhouse gases are involved. Half-joking. NFT farming will be powered (at least temporarily) by people in low-income countries. Bitcoin mining is powered only by machines. Both will be of immense benefit to networks, gamers, and farmers. Perhaps most importantly, NFT mining will provide value to employees who perform the mining. All types of gold farming operations pay substantially more than the minimum wage in their region/country.
Axie Infinity Farming
What does an NFT farming operation look like? It’s simply people playing games to earn NFTs or in-game currency. This type of activity can be seen in the NFT game Axie Infinity. Many people are fighting Axies in the Philippines for the sole purpose to obtain a crypto token called “Small Love Potions,” which can be used to breed more Axies. This is covered in great detail by CoinDesk’s article.
SLP is in constant demand. It is a crypto token that can be traded at any place that accepts it. Farmers and holders can take their assets wherever they are. This means that your assets are not restricted to the game.
Axie Infinity farming is ideal as the farmers have the option to keep growing SLP tokens and sell them, or to use the SLP tokens for breeding other Axies. Each Axie has its own value. These types of farming opportunities in NFT are rare today, but I believe we will see an increase in NFT farming over the next few years, particularly with the introduction of new token models.
Platforms Launch Tokens for Incentivization
The Compound money-market protocol launched the COMP token. It taught us that it is possible to launch a cryptocurrency token to encourage specific user behavior. COMP can be used to reward users for lending assets or providing liquidity to their asset pool. This token helped people see that there could be real upside to a platform’s success. Everyone began to launch tokens rewarding users for doing X or Y activities.
Rarible, an NFT art platform, launched the RARI token, which is directly tied to the NFT ecosystem. Users are rewarded based on how much they trade on Rarible. This token can be used to farm NFTs by selling and buying them on the market. The token-economic system was hugely successful and Rarible became the most popular NFT marketplace in a matter of hours. Rarible’s rapid rise to prominence and its success is a shining example for the rest of the ecosystem. I anticipate that many platforms, games and virtual worlds will soon launch their own tokens.
One trading card game could offer a token for users who win duels. A token could be launched by a collectibles project that rewards users for acquiring collectibles. If users build in-world, a virtual world could issue tokens to reward them. Virtual worlds need content. They are boring without content. This is why tokens can be used to encourage content creation. For teams that want to use tokens to encourage specific behavior, there are many options.
You might have noticed that I didn’t touch on the functionality of these hypothetical tokens. I only talked about how users got them. Because NFT projects can enable any type of functionality, this is why I didn’t touch upon the functionality. One will be used to manage the platform, another for revenue sharing and one for specific functions (e.g. breeding, reducing trading fees). These are the most important.
NFT farming is rapidly becoming more common. It will be possible to farm many different assets in-game, including NFTs, erc20 tokens and other non-ethereum-based tokens. I see this becoming a huge opportunity. Gabby Dizon, my friend in the NFT farming arena, is available to help you.
NFT farming will be as big an opportunity as I think it will. This will lead to a war between the game developers who ban bots and the savvy users who make them. Today, games allow users to farm. However, if bots are discovered by developers, they will be banned.
Rise Of The Bots: Artificial Intelligence to Farm NFTs
Before NFTs, there was a constant arms race between game designers who create systems to detect bots and those who use them to farm gold. Bots are a problem for game developers because they give bot owners an unfair advantage over players who actually play the game and put in long hours. Bots are almost always banned once they’re discovered.
The world I envision will exist, in which billions of dollars are at stake through NFT farming, will mean that the technology developed within this industry is going to be extremely advanced. NFT farmers will be able to create highly sophisticated AI bots that operate as humans so they are undetected. This amount of money could make it possible for top AI talent to move into the ecosystem and create their own NFT farming bots.
To be competitive in the bitcoin mining business, a company must have millions of dollars of capital. It will soon be just people living in low-wage countries who are using their computers to mine tokens in games and virtual worlds. This could lead to massive server farms that run sophisticated AI and are solely for farming. Take a look at the incredible growth and success of bitcoin mining: from mining with a laptop to the large-scale industrial facilities that we see today. It is clear that any incentive can make a difference if it is large enough. NFT farming is just beginning and will grow into a multi-billion dollar industry every year.