Exploring the Best of Blockchain Gaming: Your Ultimate Guide

TL;DR

This write up serves as a comprehensive guide to explore blockchain gaming covering the following areas:

• What do blockchain gamers look like?: Blockchain gamers mostly locate in SEA with attention paid to the earning potentials at the moment, future games developed will need to focus on being fun and creating a sustainable economy, and studios will need to regionalize the marketing efforts in order to penetrate markets with higher spending.
• Contents and adoptions: Currently, CCGs and strategy-based games are the most popular, however, ARPG, Open Worlds, and Hyper-Casuals could lead the next wave of popular games. Teams should prepare community strategies, and programmable royalties could be a method to avoid reliance on centralized market trading places.
• Content-driven studios vs. Publisher model: We’ve yet to see a clear winner in the publishing space for Web3, offering simple onboarding features such as an easy-to-use wallet could be a key to winning the race. Content studios could pivot to being publishers after making hits or establishing IPs, though the route to success is less predictable for early start-ups.
• Blockchain game cosmetics & XR: XRs enable phygital experience for gaming, enabling gamers to experience immersively and bring items to life, infrastructures are nascent and plenty of opportunities lie ahead.
• Scaling Infrastructures: Infrastructures need to scale further to provide a seamless experience for gamers, partially off-chain designs that are weakly trust-based could be considered for execution speed purposes, while the design stacks for fully on-chain gaming should be modularized while staying liquidity favorable and interoperable with other dAPPs/chains.
• Fully on-chain gaming unleashes the potential of composability and interoperability, sparking new game mechanisms, tools such as specific Defi tools and UGC content sharing enablement software, standardized frameworks for the data layer, smart contract iteration layers, computation layers as well as proposal implementation protocols are all crucial components.
• Gamer identities: Gamers have a unified identity in blockchain by default, but avatar and account abstraction could be used to create multiple identities across different platforms. Realistic avatars blur the boundaries between games and social media, which could both help to onboard more users to Web3 and increase the retention rate.
• Open Economy Challenges: A sustainable game economy is hard to achieve whether open-looped or not, it’s crucial to identify value-extracting/creating actions and regulate actively to prevent death spirals. Tokens/NFTs issued pre-game launch could create unwanted stakeholder problems and games should always maximize token sinks while being careful of using faucets. Teams should take an active stance in regulating the economy in the earlier stage of the game before shifting power to DAOs, and should utilize stress-analytic tools for simulations whenever possible.
• The F2O model is suitable for well-funded studios with a plan to implement gatcha system as well as a clear monetization plan towards traditional fat tail players, but less funded studios should stay cautious. It’s yet to prove itself as a better solution for designing a blockchain game economy.
• Blockchain Game Developer toolings: To make the life of developers easier, I’m expecting the emergence of tools such as fully on-chain game engines, ZK-WASM tools, data interaction APIs/SDKs, plug & playable verticalized development tools among others.

If you are buidling in blockchain gaming, reach out!

The newbie on the block: blockchain gaming

Games to me are the perpetual injectors of adrenaline and dopamine, the industry has been growing in popularities steadily ever since the invention of video games back in 1958, and the market revenue currently sits at a staggering $185bn per year.

The spectrum is wide: arcade, consoles, browsers, mobiles, cloud, XRs, etc, gamers have plenty of choices when it comes to their preferred platforms. In recent years, we’ve also seen a burst in popularity for blockchain gaming, which currently is estimated to be around $4.6 billion in size and will grow to $65.7 billion by 2027, it’s a rapidly evolving category of gaming.

From Cryptokitties to Axie Infinity to the rollercoaster rides of gaming guilds, capital surged in and faded along with the trend.

Despite the rise and fall, however, innovations are here to stay, and I truly believe that gaming could serve as a gateway for the mass adoption of blockchain technology, there are plenty of uncharted territories yet to be explored. In this write-up, I endeavor to break down some of the challenges and shine lights on potential areas of opportunities, such as :

• What do blockchain gamers look like?
• Contents and adoptions
• Content-driven studios v.s Publisher model
• Blockchain game cosmetics & XR
• Scaling Infrastructures
• Fully On-chain Gaming
• Gamer identities
• Open Economy Challenges
• F2O Model
• Blockchain Game Developer toolings

Let’s dive right in!

What do blockchain gamers look like?

Before we dive deep into each specific topic mentioned above, we should aim to find out who is gaming in blockchain and why they play, as it helps developers and investors to look for the correct target audience for their purpose, bear in mind as a nascent sector the data sample of blockchain gamers is rather scarce.

The most active region currently is SEA, followed by LATAM and Africa. In essence, blockchain games are more popular in developing countries than in developed countries, and the ARPU (average revenue per user) for blockchain gaming is much higher than traditional Web 2 games (e.g. Axie Infinity has >$100 ARPU)

According to the report by Newzoo which took a sample on US, UK, and Indonesia, Indonesian players find it more important to make a profit than the other countries, I suppose this is the trend across the comparison of developing vs developed countries, as the income level in developed countries tends to be higher than those in developing, and hence the marginal effects of playing blockchain games should be lower in developed countries. This could also be one of the main reasons why activities for blockchain gaming drastically decreased during the bear market (as tokens’ prices drop, earnings from gaming are no longer as attractive as they used to be in the bull market)

In short, blockchain gaming is currently more attractive to those who aim to profit from games, they are by definition, value extractors, which put pressure on the game economy. To sustain the economy, we need more value creators (those who spend) than extractors. (we dive deeper into the game economy under the Open Economy Challenges section. ) SEA, LATAM, and Africa are not regions that are most actively spending in games, the US, China, Japan, South Korea, and the UK are.

It is worth considering tailoring games in order to attract players from these 5 regions as they could be helpful to sustain the game economy. In that sense, the focus of blockchain gaming needs to shift towards being fun, and despite the similarities in US and UK markets, China, JP, and SK are 3 vastly different gaming markets (check out top downloaded games for different regions) with different player behaviors and cultures, therefore regionalization could be an important tactic to be adopted, and I am excited about teams who aim to target these regions with tailored marketing strategies. For example, that would be to develop Anime themed ARPG for the Japanese market with a focus on Twitter and Line presence or to focus on mobile-based FPS games if the targeted region is India with a marketing strategy heavily focused on Youtube influencer collaborations.

Content and adoptions:

Contents onboard players, looking at the top 10 most popular games by MAU, we spot a number of CCGs (collectible card games) and strategy-based games. The trend could be mostly due to 4 reasons:

1. These genres are more compatible with NFT tradings and Defi, which attracts speculators as these were the main adopters to date in blockchain gaming.
2. The dev cycle is relatively shorter, some early developers’ mindset is to develop a mini/easy game and leverage the experience to roll over
3. These genres are suitable for web browser-based games, which usually attract an audience group who are less time-sensitive, fitting perfectly with CCGs and Strategy games in general.
4. The underlying infrastructure today limits the categories of games playable (low throughput/high gas fees means games with intensive micro managements tend to only on-chain tradable assets).

As infrastructure matures and industry talents continue to inflow, the trend could change. The horizon of playable genres could be expanded, and more developer toolkits for portable devices could bring blockchain games to phones and consoles. An expanded playable universe/more choices of what device gamers use to play blockchain games would lead to a higher rate of mass adoption, and for most of the Web2 gamers today, that could mean ARPGs, Open Worlds, Hyper-casuals, etc.

ARPGs tend to have longer development cycles and require greater manpower to maintain patches and plan interesting storylines, and hence ARPGs tend to attract a group of hardcore players who have a great time and money-spending power if the settings of the game are attractive to this group. In short, ARPGs could be really fun (e.g. World of Warcraft), and the intrinsic nature of having tradable equipment is perfectly suitable to have at least assets moved on-chain, and as many most ARPGs nowadays have gatcha systems implemented, these probabilistic-based events could also be more transparently demonstrated to players by moving them on-chain, removing the opaqueness of “low drop rate”. Open World games tend to have even longer dev cycles, and they add an additional layer on top of ARPGs by introducing non-linear character growths and more areas for explorations and is better suited for certain regions than others (e.g. this genre is more popular in Asia than the rest of the world, especially in Korea and Japan). This genre has more components that could remove opaqueness by moving on-chain than ARPG due to having a greater amount of probabilistic events (e.g. field of explorations and random enemy generations). Hyper-Casual becoming a popular blockchain genre is my wild bet, this genre traditionally struggled to retain users as it tends to lack the depth of content. However should hyper-casuals move fully on-chain, the composable nature of blockchain would allow potentially infinite UGCs contents to be implemented in the game, and since the dev barrier for hyper-casuals tends to be lower, UGCs are more likely to be popular in this genre than others. On top of that, many stories could be created not only by one game’s own community but also by other players from other communities moving into this game/moving out from this game. We explore more fully on-chain gaming and UGCs in later sections.

However, it is worth noting that for blockchain games to expand into different devices, there exist certain business barriers (e.g. game royalties split dispute with hardware provider, programmable smart contracts bypassing 30% App store fees, etc), and these are often overlooked.

I am excited about teams who are building open worlds, ARPGs, and hyper-casuals with a tendency to focus on community and leverage crypto cultures with potentially programmable royalties to avoid reliance on centralized market trading places.

Content-driven studios vs. Publisher model:

Historically, the biggest gaming companies by market cap have always been publishers, and this is for a good reason: Contents-driven games tend to be cyclical, and hence it leads to inconsistent revenue generations as content is based on creativities. Talent stickiness in the game industry is also low (~15.5% turnover rate), and as a creative-driven industry, this would mean core designers leaving content-driven studios could bring fatal damages.

As companies grow in size and institutionalize, a more predicate revenue is often preferred by both employees and its equity holders, hence why publishers tend to be more capable of expanding to greater scales. However, though the publisher model looks great on paper, it often requires a larger chunk of kick-starting capital and the expertise to take care of distribution channels and marketing as well as part of community management. These skills are often accumulated as a result of years of experience in the industry, especially distribution channel, and the fly-wheel effect and traffic moat publishers are able to build is sizeable, hence there’s less chance of hands in terms of top spots of game publishers in Web2. (People not only go to steam because their favorite games launched there but also shop for games/look around for what to play on steam)

In Web3, the clear winner for the go-to publisher platform is yet to be determined, and most studios are publishing themselves, hence publishers remain in a competitive yet unsaturated market. There are also trade-offs between onboarding efficiencies and the quality of onboarded content to be made when it comes to how permissionless it should be to list games on publishing platforms.

On the other hand, studios are less capital-intensive and could choose to rely on distribution channels such as Steam and Origin, etc. However, should they raise before having a prototyped game, the team’s backgrounds and track records matter would then heavily. This pushed many fresh and less capital-ready talents toward the solo and indie developer markets, who tend to either produce games slower/of lower quality. This is one of the areas where AIGC could drastically boost as it could help to drive down time and costs for many parts of game design (from graphics to NPC designs to audios etc), which opens the field of possible investments into these developers. This is particularly interesting for Web3 game studios as the vast majority of them are single-digit developers studios. In my opinion, visionary studios should aim to make big hits and then transition into becoming a publisher, in Web2, this was seen when Valve made a hit with Half-life then transitioned towards Steam, and in Web 3 this is seen with Sky Mavis (with Ronin chain aiming to onboard other games rather than just Axie), which requires the studio to understand games, and be able to design games as well as overcoming challenges mentioned above such as open economy challenge, choice of blockchain, etc, this is arguably the harder path to pursue.

I’m excited about teams building publisher platforms with strong backgrounds in marketing, and business development, and having the vision to offer onboarding features such as an easy-to-use wallet is a strong bonus (e.g. Cartridge). This track’s alpha would decay over time as a clear winner emerges. I’m also excited about content studios working on fully-on-chain gaming with genres discussed in the “Contents and adoptions” section, and this track’s alpha is less decay vulnerable.

IPs are built with successful content and correlated with merch and cosmetics, which could be potentially combined with the XRs that we are discussing below.

Blockchain game cosmetics & XR

This is a virtual meets physical experience, imagine your customized NFT items from any metaverse are now projected into real life in 3D through your smartphone/smart glasses, you give it a good examination and you really like it, after some consideration, you decide to 3D print it.

Your 3D item’s metadata are encrypted (e.g. using asymmetric encryptions for angle, rotation, dimensions, etc), they are masked from scraping in the metaverse, and your item is only printed as printers verify your ownership (e.g. through wallet address). Every item you print is unique, it only belongs to you and though others might be able to view your NFTs in the metaverse, they would never be able to have the physical piece as you do.

You could even stay as an anon owner/artist by using Zero-knowledge (ZK) based certifications for ownership(to prove you are the owner without revealing who you are), then utilize validator networks to run clients which then prove that the manufacturing/printing process was done properly. The location of the item could then be tracked using a decentralized tracing system (such as the one in Vechain) to ensure correct shipping if the printing was done in other places rather than the NFT owner’s physical location. There could also be verifier networks to ensure the conditions of the printed item are maintained throughout shipping.

Now anyone could have a shot at becoming Banksy (though I’d imagine it would take some creative talents which I humbly don’t have).

I’m excited about teams working on the pipeline of ideas discussed here such as proof of physical work for the printer, a validator for physical items, a tailored decentralized tracing system for fragile items (as most game cosmetics would likely be delicate as they print out), etc, plenty to explore and I’m sure there’s more to be discussed here!

Scaling infrastructure:

For blockchain games to reach the mass of 3B gamers worldwide, underlying infrastructure would need to be scaled in order to provide more seamless experiences.

Ethereum is the home to the largest number of developers and projects, however, it wasn’t designed for high throughput tasks such as gaming. Scalability needs birthed specialized infrastructure providers such as IMX and Ronin. However fee spikes resurface from time to time, and the demand for further scalability continues to increase for Monolithic chains such as Ethereum. The introduction of L3s by Starkware is one to watch (which allows for self-controlled sequencers and block generations), as it has the potential to achieve the customization level and throughput level of an app chain while maintaining proximity to the liquidity and security at the base layer (L1).

Another approach to scalability is modular frameworks such as Polygon’s supernets, Avalanche’s subnets, and Cosmos. Projects would have better stack control while losing some of the composability with the prosperous dAPP ecosystem live on Ethereum. One could argue composability is not the key to most games, however, composability yields new interesting applications (As discussed below). From the current outlook, this is a less favorable technical approach compared to L3.

Considerations of building on alt L1s such as Solana and Near has their own trade-offs, though the transaction fee is lower at the moment, they also face challenges such as fee spike, downtime (commonly seen in Solana), lower liquidity, and lower composability problems.

There’s no clear winner on which infra should be chosen to build on for now, but Starware’s L3 solution seems to be quite comprehensive and promising should it mature.

I am excited about teams that are focused on execution speed /potentially partially off-chain designs (such that they are weakly trust-based) and should be modularized to be either multi-chain liquidity aggregatable(e.g Cosmos) or able to tap into the liquidity of Ethereum’s L1 ecosystem and remain compatible with other on-chain games (Alternative L2/3s).

Fully On-chain Gaming:

Fully on-chain gaming unleashes the full potential of composability and interpretability. Let’s take an example of combining Defi with gaming. Taking a look at Mario kart, what if the item box you obtain through each loop is now a numerically influencing item that could be combined with Defi? (Say, gains/reductions in your speed, agility, etc)

By removing item boxes from the system (as karts collide with them), users “trade” abilities, e.g. a user acquiring an acceleration boost also means he is reducing his collision size and therefore his action moves the binding point along the curve of the AMM.

Different types of existing AMM curves

which then affects subsequent players’ gain/loss when they interact with the same type of item box(these players might not be in the same match, but they could be in other matches too). These abilities are formed in pairs similar to the idea of token pairs, and other users in the blockchain could serve as LPs for these abilities (with or without financial implications). Gamers could also choose to leverage and long/short the item to adjust exposures in this scenario, hence creating interesting decision routes for the gamers.

The boxes could either appear randomly or could be even based on triggers outside of the game itself (such as another game’s activity), these triggers are permissionless. If fully-on-chain gaming comes to fruition, users are also able to customize/MOD these pools of abilities and define what they are, based on proposals and votes. (and perhaps game abilities tailored DEXes could emerge to provide different bonding curves).

I reckon the key for founders to build an interoperable game is not only to be able to spot what’s possible to compose with the game mechanics/assets, but also to be open and flexible in terms of stack designs, the more LEGO-like each layer of the stack is, and the more permissionless the governance is, the more possibilities there are for interesting mechanics/MODs to emerge.

Other exciting parts about interoperable gaming that I could think of mostly revolve around the immigration of assets cross-games, imagine having your favorite Mario Kart character appearing seamlessly into Sandbox, or even more, bringing your entire circuit race to Sandbox and race on other players’ tiles! The barriers here though are again likely to be business barriers, I argue enabling optional crossing fees could be one way to regulate UGC flows, but I’m uncertain whether this would be enough incentive for bigger IP studios to dive into this space.

Yet I’d say that the gameplays that I could imagine right now will never be the most exciting ones, the ones that I couldn’t expect to see will be, and with a truly composable universe, anything is possible.

I’m excited about teams who are building the Lego bricks tailored for interoperable gaming, with a focus on Dexes and UGC content-sharing tools as well as low-code/click-and-drag creator tools (imagine if you are able to customize and publish your own Mario characters).

Towards a serverless, autonomous world…

If your favorite game server is shutting down, what would you do? Hosting private servers used to be the solution (e.g. Club Penguin), however, they are not censorship resistant and could be shut down whenever (e.g. by Disney). Arguments could be made around IP rights, but that is less likely to happen in blockchain (should IP-NFTs perform their functions). If games are hosted fully on-chain (including game mechanics), then even if the developers are gone, players could still play, it is a truly autonomous world.

Let’s take a look at Dark Forest, an RTS game that ran fully on-chain with zkSnark implemented. Players are able to explore the universe using hash power, capture planets, search locations, and trade this information anonymously (using ZK technology!). Developers are empowered to customize, fork, and otherwise mod the gameplay experience with plugins, third-party clients, smart contract extensions, and more. The game is certainly interesting and demonstrates the capability of information incomplete games to be built on-chain, but it is still constrained by the throughput of Ethereum and the state update requirement for each block. Furthermore, if there are any loop-holes in the initial base rules design of the game, they would likely be exploited as more plug-ins and MODs emerge (e.g. a loophole to resource planets faster and hence break the balance of the game)

In-game capture of Dark Forest

Hence, on-chain game frameworks are very much needed (e.g. MUD, curio.gg), and many design challenges emerge, such as what should be possible for plug-ins and what shouldn’t be possible, to what extent should they be limited so that the permissionless nature of on-chain gaming is maintained, etc.

Furthermore, with on-chain gaming, a lot of changes to the game could be proposed, should they affect the balance of the game, having a backstop to limit them in case they break the game is also crucial, and to prevent whales from monopolizing and ultimately change the game is also a challenge, these are more of governance problems (a lot could be learned from blue-chip Defi protocols)

For changes to be implemented in the upcoming patches, executions in code are needed, we will either see software that could translate natural language into implementations of the game or 3rd party companies who specialize in implementing governance proposals for on-chain game communities.

We will also see multi-rule sets/playable modes of the same game emerge(e.g. Delysium Multiverse), giving players freedom of choice to participate in any of them. These parallel universes could also be designed to feed back (perhaps financially too, such as the one in Delysium) to the main universe creating even more interesting dynamics, and player liquidity problems could be solved through AIGC NPCs, etc.

AIGC is utilized to power metabeings (characters that could serve as NPC or join the battle as bots) in Delysium

I am curious to learn more about teams who are aiming to standardize/provide frameworks for the data layer, smart contract iteration layers, and computation layers (such as validation and proofs should they utilize ZK) for games to build on as well as proposal implementation protocols.

Gamer identities:

As discussed in Fred Wilson’s AVC blog, blockchain helps to firm human identities in a virtual world, this is especially relevant in the metaverse, with increasingly blurred lines between real players and AI-powered NPCs.

Historically, people have different identities on different platforms (e.g. your perception on steam might not be the same as your perception on Riot games), and avatars look different in different games. If you prefer to be a different person in a different universe, then this typical Web2 design is convenient, otherwise, if you wish to move your social graphs and identity across to a new platform, it becomes rather inconvenient.

Blockchain’s wallets enable one single truth of identity to be used across many different universes, which helps players to enforce their gamer identity on the blockchain rather than in just a single game. (you could immediately verify you are a skilled shooter even as you are just starting a new character in a new shooting game, because of your other accolades in other games on the same blockchain)

For gamers who prefer to have different identities in different universes, avatars and account abstraction could be quite promising solutions.

With avatars, if players want to look completely different in different games, they could choose fully customize their characters using (interoperable) NFTs.

If they prefer to have avatars resembling themselves, they could choose to have a single central avatar that could be varied as they enter different games (as seen below, powered by AIGC in Lensa), this helps to both satisfy players who want to be “related but not the same” in different worlds.

Fine-tuned models for different game genres/art genres are likely needed, and incentivization layers could be designed in a decentralized manner. These avatars could also be turned into NFTs and the traceability of blockchain would ensure that repetitive usage of these avatars for training purposes/showcasing purposes could be rewarded (through tokens).

Additionally, realistic avatars also blur the boundaries between games and social media, which could both help to onboard more users to Web3 and increase retention rate.

Photo cr: “This is Me”: Avatars and the Future of Digital Identities

Now if the player wants to be seen differently as they play different games, they could choose to create a new account each time they enter a new game (e.g. firewallet, banana wallet) as long as their wallet enables ERC-4337 standard. As such, they have the flexibility to begin fresh in different games, and they are also able to trade individual accounts (e.g. selling the WoW account without selling the League of legends account under the same wallet). This is a relatively nascent but very exciting field to be explored further as both cases listed above were developed during ETH India (and hence not yet fully commercialized).

I’m excited about teams who are working on showcasing user experiences across multiple metaverses and are able to leverage these to establish vertically focused communities, as well as a gaming experience and isolated trading-focused account-abstraction wallets.

Open Economy challenges:

The game economy determines the life span of a game and sustainable economics is intrinsically hard to achieve, as value extractors and creators are required to find a fine balance to keep the economy healthy. Guilds such as Yield Guild Games (“YGG”) aren’t a novel idea, tracing all the way back to 2004, many RPG games such as MIR3 had massive guilds farming equipment which puts strain on the in-game economy.

The resolution of this picture tells something about the age of gaming guilds :P

In Web2, game designers often act as the government and central banks of the world to regulate the economy and therefore ensure game items fluctuate within a healthy price range to increase player retention. Studios were able to control the economy as Web2 games are closed-looped, think of each game as an isolated country that won’t/barely trade with each other.

However, Web3 by nature is open-looped, which means studios can only act as the central bank and government for their games but not for the entire world, there are many game economies interacting with one another (e.g. money leaving decentraland to sandbox), and therefore we potentially have an additional consideration needed for the “Forex” system — How game items to exchange between different economies. Like gold in the Brentt wood system, ETH/Stablecoins act as the medium for much of the inter-game asset exchanges, will we see direct game-to-game asset exchange one day? I reckon that’s unlikely though, as liquidity fragmentation could become a bigger problem as more game assets move on-chain.

Game studios now need to consider additional factors such as lending (outflow) and borrowing (inflow) as well as leverage (such as the leveraged purchase of a game item) which could all disrupt the game economy. Undoubtedly, designers need to put more thought into how to adjust the in-game economy as exogenous flows occur in Web3 (e.g. a real-time balancer trigger based on on-chain data monitoring).

Dual token models (governance + utility token model) are currently popular in blockchain gaming but it’s worth carefully considering where are the sinks and faucets in the economy, especially for utility tokens. Sinks have similar effects on value creation and faucets to value extraction. Overall, the more sinks a game has, the more likely for its economy to stay strong. Some sinks include upgrading items and entering dungeons as well as tournaments. Faucets are any token supplies to the economy and should be carefully used despite it serving as a great gamer retention tool.

Teams should also consider playing a stronger role acting as a central bank in the earlier phases of a game (when the player number is < N) by having the ability to issue policies to directly and indirectly affect sinks and faucets (the propagation time for indirect policies is longer), and later the power should be shifted to DAOs as player base increases. Upon community proposals, algorithmic-based policies should also be considered (e.g. When there are too excessive outflows from the economy, increase incentives for players to stake)

NFTs issued pre-game are an additional point of failure for the blockchain game economy, many studios use it as a source of funding and identity, however, it creates an early stakeholder problem that could affect and influence game developments. You have a mixed audience who could be extremely value-extracting as the game launches/positive news releases, and players who actually want to try out and support the game (that could be monetized by studios in the long run). This makes the task of satisfying stakeholders extremely challenging and hence decreases the overall retention rate of players. (the same goes with Launchpad)

I’m excited about teams who are building scalable stress-analysis software for game economies (capable of taking in and analyzing both common on and off-chain data), despite each game’s economies being different from one another, many core metrics should remain the same across the spectrum (e.g. active player inflow/outflow, money denominated in fiat inflow/outflow). In other cases, specialized economic advisors/designers/asset managers might be needed for studios. It could also be wise to minimize tradable assets early on, as the more assets there are, the more layers there are in the game economy and hence the harder it is to control the game economy.

• A lot of inspirations came through the panel during Open Protocol by Aleksander (Axie Infinity), Hilmar (EVE Online), Aron (Laguna), and Ben(Blockade)

Could Free to own model (F2O) “fix” the game economy?

I would put question marks on all 4 bullet points

The catchphrase arose from Limit break, as Digi Daigaku genesis drops gained massive popularity across platforms.

Digi Daigaku chose to stealth launch and provide free mint on August 9 without any public information exposed, which was completely different from the traditional NFT publishing method.

Limit Break is the company behind Digi Daigaku. On August 29, Limit Break announced that it had obtained financing of $200 million. With the help of this financing news, the floor price of Digi Daigaku exceeded 15 ETH.

Genesis drops entitle holders to receive consequent airdrops, which allows for gatcha system to be implemented here, should consequent drops be used to unlock contents and exclusive powers/items, etc. This helps to increase user retention. Users are also risk-free from rug pulls and more likely to indulge in the game rather than spending time on calculating returns, and audiences are more easily reachable and there’s a higher likelihood of continued development of the game (As royalties could remain as the main method of revenue for the studio).

However, if consequent airdrops are worth 0, then the Genesis drops would theoretically also be worth 0, high royalty could also become a bottleneck to discourage the circulation of NFTs, and bot spammings, as well as untargeted stakeholders, could mix into the free-mint draw which could lead to long term game economic disruptions, smaller studios who didn’t manage to raise the gigantic amount as Limit break did might also suffer from insufficient exposure of the project due to limited marketing budgets, and hence might not enjoy the benefits of F2O models, and should the number of F2O games increase in the market, it could be a race to the bottom in terms of user acquisition costs.

So far, F2O sounds similar to the F2P market, but I don’t reckon these 2 markets would converge, because the genesis NFT collection has a limited number of holders and if restrictions are implemented on only allowing certain NFT holders to test out the game, then F2O could potentially have an easier time controlling the speed of player base expansion. How should game designers choose the drawing process for free mints is also an important decision to make (based on activities in the community, skill levels in similar games, etc).

Overall, F2O seems more suitable for well-funded studios with a plan to implement gatcha system as well as a clear monetization plan towards traditional fat tail players, but the idea is quickly revolving and more suitable use cases could emerge soon. I’m cautiously neutral about the model by far and have yet to see how it could be the ultimate solution to design a blockchain game economy.

Blockchain Game Developer toolings:

We spoke a lot about the possibilities in blockchain gaming so far, and all of these would require dev toolings, this section is filled with opportunities that I’m all very excited to explore more about.

Unreal engine and unity are similar to water for most game developers — — you can’t live without them. Similar tools will be developed for blockchain gamers, which could satisfy the needs for interoperability, permissionlessness among other features. (e.g. Argus labs)

For ZK-based interactions, developers would often require circuit knowledge in order to code out the logic, this is an extra learning process and hurdle for developers, and hopefully, with the advancements in ZK-Wasm (e.g. Delphinus) we might be able to alleviate the problem.

Furthermore, most necessary yet hard-to-self-develop/maintained layers could be tailored for blockchain gaming, such as data indexers, and payment systems. For those who want to partially put games on the chain, API providers such as stardust and Forte could be convenient to use.

Some more verticalized tools are also worth diving into despite being very early, such as rendering software that targets blockchain studios, and procedural generation software (e.g. Mumu). Interestingly, should this Software follow frameworks laid out by on-chain gaming engines (e.g.Toplogy), they could also be interoperable and therefore likely more scalable as a plug-in service.

There are also many general purposed toolings that could be used for gaming (such as Sovereign SDK), if I’m missing something here, fill me in!

For buidlers: should you build your game using blockchain?

I hope that through reading this write-up, this question is being answered already, but if not, I would break it down into 2 parts:

The 1st part: “What are the intrinsic features of blockchain that could overcome current challenges in traditional gaming?”

Amongst a long list of advantages that blockchain provides to gaming:

1. transparency (most contents on-chain is visible to everybody)
2. ownership (your assets in your wallet is yours until the blockchain stops running)
3. interoperability (Like the case mentioned in Mario Kart)
4. decentralization (opens more doors for community developers to get involved)
5. self-sovereignty (the game runs as long as the blockchain runs)

are the 5 reasons why I’d consider building on the blockchain, and I encourage fellow bright minds to argue my stance and perhaps supplement other areas in which I’m lacking.

The 2nd part: “How are the existing blockchain dapps enabling new/better use cases in gaming?”

As mentioned above in the Mario Kart case, existing dApps/infras could enable further interesting use cases in gaming. This part, should it drive any motivations towards building games on-chain, should only become more and more relevant as the field matures. E.g. What about on-chain insurance for VRF-based betting games?

Thank you, Ser, for reading!

If you are working on blockchain gaming, please do get in touch with me on Twitter!

Cya next time :D

Special shoutout to Mia@YGG, Avi@Delphi, Ilan@Playmakers, Young, and Alex@Backed for their thoughts and inputs to help this piece come to life!