Gambling Coins Are the Latest Meta. How Did We Get Here?
Hamster racing, snail racing, and now marble racing. It’s all happening in Web3.
Hamsters.gg, a platform purporting to be the first ever to livestream hamster races, has rapidly gathered a dedicated following of betters in the Web3 space eager to amass fortunes through races. Hamsters are put into specially designed racing lanes equipped with automated starting gates. Prior to the beginning of each race, users can place wagers on the racing hamster they favor.
The concept quickly became popular, leading to the creation of numerous similar platforms featuring different animals, such as Snail Trail ($SLIME), Race (RABBIT), and Rat Roulette (RAT).
CoinGecko, a prominent cryptocurrency analytics platform, has even taken the step to create a dedicated category on its website specifically for this niche. At the time of writing, the market cap for animal racing coins is $7.44 million.
While stranger things have caught the interest of the NFT space, the question remains: Why is there a growing fascination with these unconventional racing tokens?
How did we get here?
It’s no secret that the crypto landscape is currently bearish, and NFT sales have been experiencing a downturn for a while now. At the start of 2023, we experienced an optimistic moment where sales were up 43 percent. However, this trend wouldn’t continue as the year wore on. The floor prices of popular collections — such as Azuki and Bored Ape Yacht Club — saw steady declines, and highly-anticipated drops resulted in letdowns.
When the performance of traditional investments is lackluster, some investors explore alternative strategies, particularly those that may offer substantial returns, such as coin presales, quick-flip NFT projects, and pump-and-dump schemes.
In line with this, the pursuit of more lucrative opportunities has played a significant role in fueling the increased interest in gambling tokens. Investors are attracted to these high-risk, high-reward avenues as they seek to maximize their profits, even against the backdrop of a broader market downturn.
The situation isn’t entirely unfamiliar. Not long ago, we observed a similar trend with the frenzy surrounding meme coins such as $PEPE and $WOJAK.
While this may present opportunities for some individuals to get rich quickly, it doesn’t help with crypto’s already negative reputation associated with scams, possibly hindering the industry’s ability to gain broader acceptance.
Parallels to traditional markets
The excitement surrounding the potential to capitalize on these types of fast-paced investments isn’t unique to Web3. It’s no different from individuals who continue to spend on lottery tickets or casino games during periods of economic downturn.
In fact, according to a study from the National Library of Medicine, “participants who experienced financial problems due to the economic crisis were 52 percent more likely to have bought a lottery ticket during the recession period compared to those who were not affected financially by the crisis.”
In essence, this underlines a fundamental similarity between traditional and digital economies. Whether or not this trend will last, it reveals the age-old human inclination to seek opportunities for rapid wealth creation, even amid economic downturns and against considerable odds. The combination of thrill, novelty, and potential for profit is a compelling proposition that continues to draw more and more people to these streams of income.
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