The controversy on Earth2's professionalism [Long Read]
What you will read below is just my opinion on why (maybe) you feel in doubt when considering investing in Earth2. The argument I'm trying to make is just to highlight where Earth2's Team got things wrong. And from my perspective, it's just one thing they did wrong in comparison with everything else they did EXCELLENTLY.
So, you (as many) might have some doubts, but in the bigger picture lays only the fact that we are witnessing a startup growing faster than any startup before. In general, startups face the problem of growing after they have their product ready. In this case, the situation is quite opposite: they had a very quick and huge growth before having their product ready or time to test it properly. It is what it is, a unique situation for both Earth2 and for us, their users. But the situation is more a signal of a great opportunity than a reason to run away from it.
It all started in December, 2020 when users on the Official Earth2 Discord server were 'screaming' SCAM on whatever argument was in the chat about the greatness of the game. But the problem really wasn't the game itself (it is barely a game in this phase) or the community discussions around it, but the team's communication that had no structure, no plan, and no predictability whatsoever.
Why is this important?
First of all, the mechanics of the platform in the current phase can be simply put in one sentence: "On this platform you register, buy some squares, the price goes up and then you can sell it for profits." This, without clear information on the role of the properties in the game, attracted a huge number of users looking to invest in 'get rich quick' schemes, users with a very high risk 'appetite' who saw the opportunity in two major areas:
Buy land in famous places (landmarks) and sell it with huge profits when landmark enthusiasts will join. - this was backed also by Earth2 official website stating that real-world locations with high foot traffic will play an important role in the game (without any details).
The referral mechanics together with Land Income Tax (LIT) is appealing, especially when the game went viral, tiles were sold very quick, and New Land Value increasing exponentially with every f5 (refresh) pressed
The two opportunities cooled off as fast as they arise because:
When "nothing new happened in the game" the hype was gone & new land purchases decelerated; this having a direct effect in price increase and LIT income.
Earth2 team dropped in the Official Discord Server and said all man-made buildings will be wiped for a fresh building start in the game; this having a direct effect in famous places being sold quickly by landmark enthusiasts.
On top of the hype cooldown, the accelerated growth the platform had in just 3 weeks also accelerated the bug incidence. And what bugs we had the opportunity to see!!
The cooldown in hype had one major effect on the community:
Without the Earth2's team properly communicating a roadmap or explain the current state of the project some (not a few) of the early users got skeptical about the game and started a sell-off to get their initial investment back. This made it obvious for all users who invested that the "Net worth" they see in their profile page is not actually "Value" unless they can sell their properties at the current New Land Value price. On top of it, the marketplace got flooded with 50%, 60%, 70% discounts on properties since players that joined in early December were having a +1000% increase in their property value, so a 70% off would still bring them 330% profit.
So, why join if the price doesn't move? Why advise others to join if no official specific details on what future phases will bring? Why engage in the game if there's only mystery around how tiles work, how price works, how resources work. And, the most important: what is the business plan behind Earth2 since no one knows how many employees they have, who leads who, what are their scaling plan, and so on.
The bug incidence had other major effects in the community:
With Earth2 going viral and a plethora of users joining in a very short period of time, like all improperly planned infrastructures, the platform collapsed. Hundreds of thousands of users couldn't access the platform (where they put their money) for weeks. No communication on the incidents was ever made properly and, of course, no mitigation communication was ever made. All the community on Discord got was: "we're working on it, we are 24/7 on it, will fix it and get back to you in Announcements channel".
On top of it, serious bugs started to be exploited. And, as I said, what major colossal bugs!!
Some users started noticing that when you bid on a property you want to buy from another player, your balance gets debited with the amount you bid. Then, when you cancel the bid, the amount gets credited (back to your balance) to your account. Only that, because the platform being slow, you could cancel the bid AGAIN, and AGAIN because the canceling wasn't happening fast enough. Then, when the canceling got through players noticed that the amount they bided was credited to their account each time they canceled the bid. So, a new Leaderboard was born: Bug abusers. Some users started pressing the "cancel bid" so many times that they grew their accounts to hundreds of thousands of dollars just by doing that.
The complexity of the problem increased when they started buying new land with that money, then selling it to other players, and until the Earth2 Team noticed the problem there was a massive complication in reversing the transactions (that still goes on to this day).
Marketplace Listing Scam - bug
Scammers joined the community, of course. Where they smell money, they just jump in and brainstorm their schemes.
And there was a smart scheme I'll describe it in steps so it's easier to follow (don't worry, it can't be done anymore):
They list a property to the marketplace at a VERY low price ($0.01)
The property is instantly listed on the marketplace so other players see it on top of the list
They immediately change the property price to a HIGHER price ($10) but this change doesn't get propagated quick enough since other players already opened the property page knowing they got themselves a great deal.
Players just blindly press the "Buy It Now" button thinking they will pay $0.01, but they pay $10 because that is the new price.
Of course, without proper communication and just some vague messages in Discord Server, not all players were aware of this. And I'm referring here to Earth2 players who don't use Discord. And they are a lot (maybe the majority)
There are other scams, but not related to bugs so I'm not going to get into details.
Everything above led to thousands of players requesting a withdrawal. And, of course, the Earth2 team wasn't planning for this so they got overwhelmed by the requests. Without a proper process in place to track and resolve it, they got themselves another issue: 4 - 8 weeks withdrawal time. Frustration started to grow in the community, users lost their confidence and other players just kept screaming that the game is a scam. Fortunately for Earth2, they got themselves a pretty cool community and proofs of withdrawals started to pop in the chat so people got their trust back.
But this doesn't solve the problem, and a withdrawal process is a very complicated process to set up to speed. Some f us working in legal and finance understand this, but the vast majority of players don't. On top of it, considering that many users joined Earth2 for the investment opportunities they come on board with the expectations set by trading platforms they used before, where the withdrawal process is almost instant.
It was all about setting the expectations right. And this is properly created with communication. Planned, structured communication.
Earth2 is maybe the best platform and game idea in the market right now. Considering the pieces we get from the team on the next phases, we have ourselves a massive investment opportunity + best game ever made + a platform with endless opportunities in terms of business, advertising, and escaping the real world. Also, an AR/VR environment that looks promising enough to be already classified as the best real-world replica's terrain system ever created.
And their plans (if you can put them together from the pieces they throw on Twitter and Discord) are solid, visionary, unique.
They only need to start communicating with all users via email or notification or any other in-site communication channel.