Wall of Shame image assisted by Dall-e AI.
The Hou$e Always Wins
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The house always wins. Other than ”what happens in Vegas, stays in Vegas,” nothing is more true when it comes to gambling, online, in person or now the metaverse.
Casinos in the Metaverse?
The Players
- Secret Society XX (SSXX)
- Gambling Apes (GA)
- Monkey Bet DAO (MBD)
Part of the buzz during the initial bull run in the NFT world was a promise of a new virtual space, one where anything goes - you can launch your own Web3 casino next to Snoop’s place, create a virtual nightclub, curate your own VR gallery space or buy land near the Bored Ape clubhouse. The appeal of Web3 is that the rules were yet to be written. Unfortunately, that also brings out the scammers. Much like the ICO gold rush of 2017, the promise of being an alpha adopter in crypto comes along with an increasingly high level of risk, especially in rapidly emerging technologies like Web3, the metaverse and NFTs.
These are just three examples of failed NFT projects that I personally held but have dumped at various times (usually held longer than I should have after ODing on hopium with Gambling Apes). This is just one person navigating the nascent world of NFT and Web3, but there is also a must-read blog dedicated to how Web3 is actually going.
Metaverse AI-designed casino or Vegas during COVID?
The Problem
The Slow Rug - Secret Society XX
Do Your Own Research (DYOR) is something you will see everywhere in the NFT and crypto space. When you don’t do enough of it, you get burned and you invest in projects like the Secret Society XX. What initially seemed like an ambitious but potentially viable metaverse casino project turned out to be a fairly unsophisticated rug, with the team just disappearing from social media in January 2022. The name of the project has changed numerous times on OpenSea and social media (typical of scammy projects), no development actually occurred on any online spaces and the much-hyped purchase within Decentraland was likely fake. I should have known better. We all should have known better. FOMOed into this one in a late-night OpenSea session, thankfully at a price near the mint. It could have been much worse had I been vying for the rare versions which gave holders an even larger % of the casino profits. A passive income junkie’s dream. An anonymous team, a lofty goal, an unproven concept, a new area of revenue generation environment to both develop or exploit and a whole bunch of ETH at play are some red flags that should have gone up, especially trying to buy in at a higher floor valuation and not just minting and flipping the project.
Banned from the OpenSea - Gambling Apes
From its inception, Gambling Apes (GA) appeared to be a promising mint and long-term hold project. Within hours of its launch, the project sold out, demonstrating that the concept resonated with many and that the excitement surrounding the artwork was well-founded. What happened with GA is a little harder to separate issues the team contributed to the problem and what may have been outside of their control. One thing is for sure there was a breakdown of communication when the shit started to hit the fan. If you weren’t in Discord, you would have been surprised to find out OpenSea no longer recognized the project and the Twitter account had disappeared or been banned. Why? Nobody seemed to know. No one would have blamed you if you thought you had been rugged. Even before this mini-fiasco, the promise of a profitable Web3 casino whose co-ownership was part of an NFT project didn’t materialize as many had mapped out. Unlike Secret Society, GA actually launched a gambling portal. Dismal volume at the beta casino and abysmal monthly profit/loss reports, once the initial casinos were online, along with a naive approach to marketing in a space that is established, didn’t help make things any better.
Initial data from the casino was unconvincing and, to some, disheartening, especially considering it was a nascent project situated in a hybrid Web2/3 space. I had big hope for this project, especially after the successful launch, cool artwork and sportsbook on the horizon.
These are just some of the questions the project will need to address if there is any hope of recovering.
It was obvious to anyone in the NFT and crypto space that a bear market was going to define 2022. How would GA reinstall confidence in the project? The floor had slipped from nearly one ETH all-time-high to settle around the pathetically low .138 in early December (down from .280 on just Oct 10). As of Dec 29th, the floor on Looks Rare was .180 and by April 17th, it was an abysmal .038 with a market cap of 4.871 K. This is a nearly 97% drop in the floor price over time. There is no denying the project had a buzz during the NFT bull run but judging by the price and volume on LookRare, this project is all but dead in the water.
The Bait & Switch - Monkey Bet DAO
How it started.
How it’s going.
If you were following influencers on #NFTTwitter, there was a good chance you had Beanie’s tweets on your notification list. While he didn’t publically get behind Monkey Bet DAO (MBD) like he may have other projects he was invested in (Pixel Vault, Punks Comic, Metahero, Wolf Game, Fractional/Tessera) many who were drawn to the project first became aware of it through Beanie’s tweets. Judging by a quick glance through one of Gary Vee’s public wallets, he is holding at least 3 or 4 useless MBD NFTs too. His tactile endorsement likely moved some units as there is a dedicated group of NFT hunters that love to copy trade or just FOMO into projects that Gary has sunk money into.
Beanie’s tweets may not be financial advice, but he did bail from his endorsements of MBD early on. Were his followers his exit liquidity or did he see the writing on the wall? (Probably a bit of both.) As for Gary Vee, it would be fascinating to hear him interviewed on the project. He may not have had stacks of ETH riding on the project, but most NFTs seemed to be bought in the 2-4 ETH range, likely during the initial buzz around the project. More time looking at transactions and the blockchain would confirm this.
Despite launching a USD casino, MBD was forced to recalibrate the project to an arcade-style gaming website, not a functioning gambling project. Again, this information was barely communicated with NFT holders. A newsletter, Substack or random blog could have easily alleviated some of the tension between the holders and developers. Airdrops of millions of worthless MB tokens won’t make up for the fact it is an arcade, not a revenue-generating online casino.
Along the way the Pit Boss claims and the slots were terribly handled, with many long-term holders missing out thanks to poor communication and sloppy execution. Even now, getting solid info from the team is nearly impossible. Why this was never improved is a bit suspect. They have done little but window-dressing for long-term holders, content with the fact they completed their initial roadmap. A graphic and checkpoints don’t make a project. Who cares if nothing really stuck? It doesn’t seem to bother them that they have pivoted completely from the original vision of the product. There was some discussion online that the fact the team’s first language was not English contributed to the difficulties in communication with the MBD community, but that can’t be the sole source of these problems. Hire someone or use AI to ensure your ideas and plans can be clearly communicated. That excuse does not measure up to the problems the project had. You didn’t have to have Gary Vee mentoring you to have figured this issue out.
“In March 2000 when all those internet stocks which were grossly overrated and collapsed, Amazon was sitting there at seven or eight dollars per share, the same thing will play out in the NFT space.” Gary Vee
DYOR - The Perils of Web3, the Metaverse and Online Casinos
Web3 casinos are online gaming portals that use blockchain technology and smart contracts to enable decentralized and transparent gambling. While Web3 casinos offer many benefits, they are still relatively new and untested technologies, especially those associated with NFTs. There are several ways in which they can fail or become compromised.
Some of the ways in which Web3 casinos can fail include:
- Security vulnerabilities: Like any software or system, Web3 casinos are susceptible to security vulnerabilities, hacks and attacks. Hackers may try to exploit these vulnerabilities to steal funds.
- Bugs and errors: Web3 casinos are built on complex and rapidly evolving technology and there may be bugs or errors in the code that can cause the system to malfunction or fail.
- Lack of adoption: Web3 casinos are still a relatively new and niche technology and do not have widespread adoption or a customer base. This can make it difficult for Web3 casinos to attract players and generate revenue, especially in certain countries that have established online gambling industries.
- Regulatory challenges: Both NFTs and Web3 casinos operate in a decentralized and unregulated environment and this can create challenges in terms of compliance with laws and regulations. Some countries may have strict laws that prohibit or restrict online gambling and Web3 casinos may be at risk of being shut down or facing legal action. The failure of both Gambling Apes and Monkey Bet DAO to deliver on their vision demonstrated this. This is only amplified by the increasing adoption of government-fronted online gambling in new sectors in both Canada (recently allowed single-event betting) and the United States (more than 30+ states now allow online gambling).
NFTs can be used in Web3 or metaverse casino projects to represent digital collectibles, players or game assets, but there are several potential problems and challenges associated with the use of NFTs in these projects.
Some of the problems of NFTs in Web3 casino projects include:
- Lack of interoperability: NFTs are typically based on specific blockchain platforms and they may not be compatible with other platforms or systems. This can create challenges in terms of interoperability and exchange, and it can limit the use and value.
- Scalability and performance issues: NFTs are digital assets that are stored on the blockchain, and this can cause scalability and performance issues if the blockchain is not able to handle a large number of transactions and data associated with NFTs. This is essential if a casino is to grow to meet user demand.
- Regulatory challenges: NFTs are a relatively new and unregulated technology and this can create challenges in terms of compliance with laws and regulations. Some countries may have strict laws that prohibit or restrict the use of NFTs and Web3 casino projects that use NFTs may be at risk of being shut down or facing legal action.
- Lack of adoption and user engagement: NFTs are still a niche and relatively unknown technology and Web3 casino projects that use NFTs may struggle to attract and retain users. This can limit the growth and sustainability of these projects., especially in the competitive online casino industry.
Metaverse casinos will offer a unique and immersive gaming experience and they can incorporate a wide range of interesting features that enhance the user experience and the gameplay.
Some examples of interesting features of a metaverse casino are:
- Virtual reality environments: A metaverse casino can use virtual reality technology to create immersive and realistic environments that simulate the experience of being in a real-world casino. These environments can include different themes, such as futuristic, ancient, or fantasy, and they can provide a rich and engaging atmosphere for the users.
- Digital avatars: A metaverse casino can allow users to create and customize their own digital avatars, which represent them in the virtual world. As NFTs, these digital assets can be programmable to change over time, either through a token-based design system or through some other method.
- Social and communication tools: A metaverse casino can provide social and communication tools that allow users to connect and communicate with each other in real-time. These tools can include chat, voice, and video and they can enable users to form communities and networks within the metaverse casino.
- Gaming and entertainment: A metaverse casino can offer a wide range of gaming and entertainment options, such as casino games, arcade games, sports games, music and other activities. These options can provide a diverse and engaging experience for the users and they can encourage users to explore and discover new experiences within the metaverse casino. This will help differentiate these casinos from other gaming experiences.
- In-game rewards and incentives: A metaverse casino can use in-game rewards and incentives to motivate and reward users for their participation and engagement. These rewards can include virtual currencies, tokens, items, or experiences, and they can provide a sense of accomplishment, gamification and recognition for the users.
As far as casino games go, it's possible that the metaverse could offer a wide range of unique and exciting experiences that are not currently available in the real world or in traditional online casinos. Some examples of games that could potentially be offered in the metaverse include:
- Virtual reality casino games allow players to experience the thrill of a real-life casino from the comfort of their own homes
- Augmented reality games that use a player's physical surroundings to create a unique and immersive gaming experience
- Multiplayer games that allow players from all over the world to compete against each other in real-time
- Games that incorporate elements of popular culture, such as movies, TV shows, or music, to create unique and engaging experiences
How Did It Play Out?
The Secret Society Collection aka The Slow Rug
TL;DR: The SSXX metaverse casino project was a scam that lured investors with promises of revenue sharing and gambling opportunities. The team disappeared from social media in January 2022, never delivering on their promises, and leaving investors with worthless NFTs.
Gambling Apes - Banned from OpenSea & Killed on Twitter
TL;DR: Gambling Apes (GA) started strong but faced challenges, including communication issues, lacklustre casino performance, and poor marketing. It struggled to differentiate itself in the established online gambling market and attract customers beyond NFT holders.
Additionally, the initial data from the casino was unimpressive, which raised questions about its potential in the established online gambling world. Concerns include differentiating the Web3 casino, attracting customers beyond NFT holders, developing effective advertising strategies, and comparing it to other crypto sportsbooks such as Wagerr. As a result, the project's value and volume have significantly declined, leaving a pale imprint of what it could have been.
Monkey Bet DAO - Bait & Switch
TL;DR: Monkey Bet DAO (MBD) initially gained traction through influencers but faced challenges such as poor communication, a pivot from a revenue-generating casino to an arcade-style gaming site, and issues with Pit Boss claims and slots. The difficulties highlight the importance of effective communication, adaptability, and understanding value vs. perceived value in the NFT and online gambling sectors. Future projects must learn from these mistakes and navigate the complexities of these rapidly evolving industries.