Filipino developers and players in the rapidly growing NFT (non-fungible tokens) agreed that the industry must be regulated, including taxation, as they noted unclear government regulations in the very new industry where the Philippines is seen becoming a global hub.
Leaders of Filipino-owned tech startup MetaDhana Studio, which developed and is marketing the Philippines first locally-developed NFT – Rooster Wars, believe that taxation can be embedded in the game itself as they recognized the need for government regulation of the growing NFT space.
MetaDhana CEO Mikhail Jon Peñalosa said at the Kamuning Bakery forum, stressed that government has a hard time coming up with regulations on this very new area.
“People are already making full time income through NFT playing in gaming leagues,” he added. But, he pointed that, “Until now the regulations are not clear. Which are the taxable events, which are the taxable events? Which part of this is taxable or is it the conversion of the token to Philippine peso. Is it the actual gains oif tokens from gaming? We don’t know, not very clear.”
Penalosa said they are very much willing to work with the regulatory agencies. “We are very pleased to be working with the government,” he added.
Michael John Pena, MetaDhana chief technology officer, also stressed they want to help government in the regulations because right now the industry very unregulated, but not to the point of strangling developers that they could no longer innovate.
“One aspect were thinking, we want to regulate developers who are raising funds, liability clause and stuff like that,” said Pena noting that these developers just raised money but do not pursue their ventures.
Community leagues, which are composed of NFT players, also welcomed some regulations by the government. But just like the operators, they also want to have clear guidelines as to what can be taxed – token or the Philippine peso conversion, one time taxation or every time you earn from playing the game.
He said the NFT ecosystem and the government are working to come up with some form of regulations.
MetaDhana is a team of game designers and creative artists from animation studios that create and engaging game with production level visuals where a game can be made from scratch or modified from its library f over 20 games. It is a next generation media and technology organization that democratizes artificial intelligence (AI), blockchain, games and creative development for creators and various crypto ecosystems through its consortium.
One of their products is the so-called Rooster Wars, a play to earn game that they would introduce next month, April, via an ICO (initial coin offering), another form of cryptocurrency that businesses use in order to raise capital. MetaDhana plans to offer eggs (tokens to be used to play) for P5,000 per.
Rooster Wars is a player vs player (PVP) online multiplayer game where players can collect, and play to earn by fighting with their roosters in the arena, using the egg as a token to be able to play.
Company officials believe that Rooster Wars can be an alternative to “e-sabong”, but said they cannot be qualified as gambling. It is not also a bloodsport.
Penalosa also raised their ambition to make the Philippines a global NFT hub as he cited the success of Axie Infinity, a Vietnamese-owned play to earn game, that generates as much as $150 million in a given transaction. Now, Axie averages $30 million to $100 million in transaction volume.
He said the Philippines is the world’s biggest NFT market followed by Thailand, Indonesia, Brazil, and Africa.
According to Penaloza, NFT is a multi-billion industry globally with around $5 billion size in the December to February period alone and still growing.
“And what’s interesting is the Philippines is actually one of the highest trading volumes, we command at least a good chunk of that,” he said.
What makes the Philippines attractive to NFT gaming is the fact that research on Axie showed that 40 percent of Filipinos already know what is NFT and 40 percent are already aware of it but not yet taking action.