How I learned to stop worrying and love the gamification of finance
Gamification has a bad name in finance, and rightfully so. Trading apps fired confetti when you bought options. Meme stocks turned rent money into casino chips. Say “gamified finance” today and people picture slot machines packaged as financial products.
The gamification itself was not the problem. The problem was the mechanisms powering these experiences: leveraged bets where you could lose everything. Game mechanics are tools that have been leveraged for nefarious purposes, to make gambling more addictive. However, when built into the right products, they can bring tangible benefits to users.
Three questions separate gambling and gamification.
First, what’s the worst case? In gambling, it’s losing everything you put in. In good gamification, the worst case is small, known, and capped before you start.
Second, where does the upside come from? In gambling, winners are paid out of losers’ principal, minus the house’s cut. In good gamification, prizes come from...
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