A move-to-earn project. — Photo sggp.org.vn

Blockchain has been gaining much traction in Viet Nam in recent years and is hailed as a game-changer in the gaming industry, but insiders are concerned that many GameFi projects are more of a scam than a real business.

Nguyen Ngoc Dung, chairman of the Vietnam E-Commerce Association, revealed that over 600 blockchain projects have come on the scene in the past few years, and the majority are GameFi, a terminology describing the incorporation of blockchain in games for monetisation.

He said GameFi projects offer such high profits that investors pile into the industry to make easy money. The mass exodus of profit-seekers has turned Viet Nam into a GameFi powerhouse with the proliferation of game-making studios.

However, the lucrative industry has attracted scammers who set up studios and paint an optimistic picture of their projects to lure investors. The projects sound good on paper but are just for show. In most cases, they end up unfinished with no money returned to investors.

One of the most notorious cases is the Ccar, Cpan, Cguar project which was claimed to scam over VND2 trillion. Others include Zodiac and Crypto Bike, with damages of VND50 billion and VND30 billion, respectively.

The latest case involves a move-to-earn project that employed false advertising to promote its games. The project claimed on its website that its business partners are big names, including DEO Network, Pencil and Mooka. The corporations deny any partnership with the project.

Once customers click on the website, they must connect their e-wallets to Metamask, and a cryptocurrency wallet used to interact with the Ethereum blockchain. Experts urge customers not to make the connection, otherwise, they could lose all their money in their e-wallets.

Dao Tien Phong, a managing lawyer at Investpush Legal, asserted that offenders leveraging technology to scam investors would face criminal penalties under the Criminal Code.

The code stipulates that scams in e-commerce, online payments, online currency trading, online capital raising, multi-level online marketing and online securities trading constitute a criminal offence with a prison sentence of up to 20 years.

Chainplay, a one-stop hub for all-things blockchain gaming, surveyed 2,428 investors on GameFi in June.

The survey found that three in four investors join crypto because of GameFi. Sixty-eight per cent of GameFi investors stay in the market for less than a year.

Eighty-nine per cent of crypto investors saw their GameFi profits decrease in the last six months, with 62 per cent losing more than 50 per cent of their earnings.

In 2022, investors worldwide spent an average of 2.5 hours per day participating in GameFi, which is down 43 per cent compared to 2021 (4.4 hours).

Seventy-three per cent of the respondents shy away from GameFi investments because they fear rug pulls, Ponzi schemes, and pyramid schemes projects.

Eighty-one per cent of GameFi investors prioritise the fun factor over earnings regarding future GameFi projects. — VNS