Waikato 20-year-old’s $103m NFT scheme causes controversy in gaming world

Source: Stuff / Brianna Mcilrailth

A Hamilton man who runs an online gaming platform has provoked controversy after raising US$70 million (NZ$103m) selling digital artworks as NFTs which he admits were not up to expectations.

Martin Stephen Van Blerk, 20 – known to many on gaming platforms and Twitter as Syber, and Dippy on YouTube – designed Pixelmon as an NFT game aiming to be the “largest and highest-quality game the NFT space has ever seen”.

It was similar to the popular Pokemon, where players travel through a virtual environment collecting Pokemon characters while walking around the real world. But on Pixelmon, players buy and collect NFTs which are playable tokens.

Pixelmon’s website promised: “The aim is to build a virtual metaverse where you can play with friends, battle and train Pixelmon, trade items, decorate your home and customise your virtual character; endless experiences await.”

The game quickly amassed 200,000 followers and those who got in early, by purchasing 3D art NFTs for the game, were promised access to exclusive in-game items and events.

About 7750 NFTs were sold via a Dutch auction – meaning their price dropped by 0.1 Ethereum (ETH) every 10 minutes until a bid was made – with a starting price set at 3 ETH (around US$9500, or NZ$14,500, at the time).

As a result, Pixelmon raised around US$70 million (NZ$103m) from crypto enthusiasts.

But when the artworks were revealed, the audience was not impressed at the amateurish execution, with some social media posts ridiculing the quality of the NFTs.

Social media users called him a scammer, and one user said it was “absolute scum behaviour”.

Van Blerk told Stuff the launch went “really well», and the response from the gaming community was “amazing”, but online he admitted the quality of the art was not up to expectations.

“It’s been a roller-coaster,” he said. “It all went well, except unfortunately lately the art for the actual project didn’t go as planned and that’s led to a few of the responses on Twitter.”

He said the artwork wasn’t created by a “big-scale professional team” and it was difficult to deliver to the expectations.

“There were very high expectations of this project because of the size it grew to,” he said.

The art was all personally funded by Van Blerk and created by online artists. He said he spent about NZ$15,000.

Van Blerk said being called a scammer wasn’t fair.

“It is very harsh and incorrect because we’re not an art project, we’re a game project, so people didn’t purchase the art as an NFT.”

But on the Discord platform online, he said Pixelmon had made a “horrible mistake».

“To put it simply, we are sorry. This is unacceptable. We felt pressured to push reveal, and the reality is we weren’t ready to push the art work. This does not represent the brand, and we will fix this as we have let many people down with this reveal.”

Van Blerk admitted he hired artist to work on them for less than the price of a single Pixelmon, without telling the artists it was for NFTs.

Van Blerk promised to pledge US$2m from the US$70m in order to revamp and redesign the NFTs at a higher quality.

But he admitted he had spent some of it – he had spent 280 Ethereum on BAYC, Azuki and CloneX NFTs, had swapped out $1.3m and sent another 13 Ethereum to an exchange.

”I’m more excited personally about the project more than the money itself, when the money came in I was thinking ‘oh my gosh I can create a really good game with this’,” he said.

“We’ve created one of the most talked about communities in the NFT space.”

Associate Professor Alex Sims from the University of Auckland Business School said it appeared to be a case of “over promising and under delivering”, and not necessarily a scam.

“This serves as a good reminder for people to be wary of purchasing products, both physical and digital, including NFTs, before they are developed,” she said.

She said there was considerable hype over NFTs and the metaverse and people needed to be careful which NFTs they purchased.

“People buying products that are yet to be developed must do their due diligence. Look at the history of the people behind the project, if they have a track record of issues, then steer clear of them.”

Van Blerk has a history of raising money on Kickstarter for projects but some customers have complained they never received the products.

Van Blerk co-founded VidFunder with his father Hendrik, a platform where YouTubers could gain funding from their fan base for any video idea they had.