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How to reduce loss/risk in NFT Gaming Platform
The goal of investment, business, and trading is to manage risk as little as possible while also managing money. Since the NFT gaming platform was created, we have seen how successful it can be as a business.
Regrettably, social media seems to be highlighting the potential profits of the NFT gaming platform while ignoring the failure stories.
It is crucial to remember that NFT players also suffer losses.
Media portrayals of NFT games aren’t entirely accurate. You need to become familiar with a few fundamental problems with NFT games. All of these earning potentials carry the risk of losing cash or digital assets.
The foundations of NFT Gaming Platform risk management are discussed in detail in this article.
Risk Factors in the NFT Gaming Platform
Infrastructures for the NFT gaming platform are created on the blockchain. Because they are blockchain-based and offer gameplay rewards, these games give you ownership of all associated digital assets. Also, since the underlying technology for NFT games is blockchain, there’s the promise of security.
However, it is best to understand security and loss risks better in light of recent attacks on crypto entities. Here are some difficulties with NFT gaming that could lead to monetary loss.
Scams
You will see a lot of “projects” that promise profits if you follow NFT gaming-related topics on Twitter. But not all of these NFT projects are reliable. Many are merely scams with attractive designs. Additionally, there have been a number of rug pulls where developers stole money from investors.
The two most frequent obstacles in NFT games are rug pulling and scams. Scams on the blockchain were estimated to have cost $14 billion in 2021. Anonymity, which is meant to be a benefit to the ecosystem, actually increases the risk of being scammed.
Investment Loss
Buy-in is necessary for many NFT games, either for characters or utilities. On occasion, though, players lose their NFTs after visiting a dubious website. Players occasionally lose NFTs from games to their opponents.
Loss in terms of value
Based on perception and utility, NFTs are valued. The value of the NFT assets linked to a game declines if it becomes irrelevant. In NFT games that cease operations after only a few months, many players lose money. When a game isn’t well-made enough, this can occur. A game’s economy wanes and it fades away when players stop participating.
The difference between value creation and value extraction in NFT games is currently a very urgent problem at the time this article is being written. This is due to the play-to-earn model that NFT games use as their foundation. Early adopters seek to enter the game (through their investment) and extract value from these games as quickly as possible.
The number of people looking to extract value also increases as the number of players does. There will therefore be more value extractors than value creators when the growth in the number of new players starts to slow down. Recall that the value is created most by new players who invest in the game.
There is a chance that the project will fail if this disparity persists. A loss will eventually occur if the project fails and you have not received a return on your investment. You must learn to reduce these legal NFT risks, over which the developers have no control.
Phishing and compromise of accounts
The crypto community is accustomed to account phishing. Scammers get in touch with NFT owners to induce money transfers to fictitious accounts. The con artists may occasionally craftily demand information about your coin wallet.
Scammers might transfer some cryptocurrency to your account as part of some other types of compromise. It is risky to purchase such cryptocurrency from unreliable sources, and attempting to withdraw it will put your account at risk. Keep in mind that your NFTs are also stored in your crypto wallet.
Since the blockchain is a decentralized system, it is your responsibility to play NFT games with as little loss as possible.
How Can Loss Risk Be Reduced In Crypto Gaming?
You must effectively plan how to avoid losing money when playing on the NFT gaming platform by learning risk and money management techniques before and after you begin.
Secure Your Wallet’s Seed Phrase
No application requires the seed phrase from your wallet. Constantly keep it secure. Make sure you are on official websites even when you have to enter your wallet address. Your wallet’s key is in your seed phrase. Do not continue to use digital platforms, please. It should be noted on paper.
Do a lot of research on the NFT Gaming Platform.
It’s difficult to do research on NFT games. There can be both too much and too little information at times. Read the whitepaper of the game you are researching and contact them with any inquiries. Become familiar with the developer’s plans. Find out their growth strategy, especially if the new player’s rate of growth starts to slow down. Be aware of what will occur when growth is stopped.
Observe scams
Be wary of a variety of scams, including phishing, bid-rigging, pump-and-dump schemes, etc. Your NFT risk management instincts must come into play as soon as you become involved. These problems with NFT games don’t just disappear on their own.
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