“We believe in a world future where work and play become one,” proclaims video game developer Sky Mavis’s website. In the Philippines and other developing countries, the studio has given us a preview of that future, and it’s bleak. During the COVID-19 pandemic, millions of desperate Filipinos replaced their usual income sources with endless hours spent on Axie Infinity, a “play-to-earn” video game created by Sky Mavis. An unstable, exploitative economy soon grew around it, which many economists regard as a gigantic Ponzi scheme.

In the game, users purchase, train, and battle adorable monsters known as Axies, earning Smooth Love Potion (SLP), an Ethereum-based cryptocurrency; the Axies double as non-fungible tokens (NFTs) and can themselves be sold for profit. When Axie Infinity first caught on in 2020, it could provide a decent living: one early adopter made $487 in fifteen days, well above the Philippines’ minimum wage of around $11 a day. Filipinos, who mostly have internet access but often lack bank accounts, would go on to make up 40% of the game’s userbase, which peaked at around 2.7 million. By 2021, some landlords, gas stations, and restaurants in the Philippines were accepting payment in SLP. As Axie Infinity became more popular, however, SLP began to depreciate, while the cost of starter Axies surged to 40% of the average Filipino’s monthly salary. Unable to afford their own Axies, players began leasing them from managers who took a 30% to 50% cut of their earnings, leaving them with as little as $29 per week.

Then, in early 2022, the crypto market crashed, and SLP lost 99% of its value. Around the same time, North Korean hackers broke into Axie Infinity’s systems and stole more than $600 million worth of cryptocurrency, mainly from players. But if exogenous shocks hadn’t brought down the game, it probably would have collapsed under its own weight: even Sky Mavis admits that Axie Infinity is “dependent on new entrants” to prop up SLP, a classic mark of a Ponzi scheme.