Gaming is a perfect entry point for web2 users to the blockchain ecosystem. Advantages are understood by all, the games are more and more accessible (wallet user-friendly, ERC-4337) and the games will have a much better gameplay than those previously developed. On-chain gaming is a paradigm shift in traditional gaming, driven by the technological progress brought by the ZKP. I think every one agree on that. But today, I want to go further.
On-chain gaming: The hidden side of the iceberg
For most people, web3 gaming comes down to the ownership of in-game assets through the blockchain.
This is indeed a great revolution in the gaming ecosystem but in only refer to maximum 5% the opportunities that on-chain gaming can offer.
The hidden side of the iceberg represents 95% more opportunities that everything else. I think about interoperability, composability, identities and having a totally on-chain game built by the community.
What is the real on-chain gaming
It refers to a type of gaming that is built on blockchain, where game assets and transactions are recorded on blockchain. Instead of having a game developer maintain an official game server, on-chain gaming develop the underlying infrastructure (smart contracts) and outsource hosting and development to the community, allowing for user-generated content and independent creators to thrive. Private servers can be thought of as rollups on a layer 1 base game, with each server and community having its own token and ecosystem, allowing for interoperability for player assets and identities in previously fragmented communities. They are often considered more transparent and resistant to fraud than traditional online games. Additionally, on-chain games often have a strong focus on player ownership and control, allowing players to truly own their in-game assets and have more control over the game’s economy. But the most important thing is the place of the community in this kind of game. They are the ones who build economy, the game design, the architecture on top of layer 1 (base built by the team).
Games that exist on a blockchain platform will create dynamic and ever-changing environments that promote collaboration and community. These games are open-source and allow for customizable clients and modifications without permission, making them a democratic force in the gaming industry. They aren’t solely about gameplay, but also involve community ownership and governance. By utilizing the power of decentralized networks, these games can unlock the full potential of both player and developer communities.
Imagine games that we can call “unstoppable games”. The concept of permissionless and persistent games has always been intriguing to me. The capability to construct virtual worlds that exist autonomously is exceptionally captivating.
Here is a table of the different “combo” on how a web3 game is design :
Web3 games will have different characteristics. Each time there will be a slider that will tend between fully on-chain and partially on-chain.
Technological advances that now allow on-chain gaming
Blockchains have been an obstacle to the development of on-chain gaming. When you think about it, it is the tool on which they are built, therefore, the progress must be at a level where the player experience can be good. A minimum of transactions per second with very low fees without forgeting security. With the advancements in infrastructure and scalability thanks to L2 and ZKP, we seem to have arrived at a solid base for the expansion of a healthy on-chain gaming.
In addition to blockchain problems not yet adapted to the expansion of totally on chain games, we have the problem of wallet. Many on-chain games require users to sign multiple transactions to interact with different smart contracts, which can disrupt the game experience. To address this issue, some developers are using session keys to improve the gaming user experience. With StarkNet and Argent wallet, the user generates a session key that is held in the browser’s local storage, and the DApp is only authorized to sign transactions for a limited time. When the key is revoked, the user needs to create a new one and authorize it again.
Starknet allow a nice user experience as they allow users to pre-approve an application’s transactions based on parameters such as a given duration, a max amount of gas, a max transaction volume of a certain token, or a particular function on a particular contract. Session keys are smart contracts that can be used in many cases, such as playing games, setting up multiple DeFi positions, filling out forms with many inputs, rearranging assets within a wallet, or a non-custodial and self-directed IRA that allows users to move funds around within a single session. Session keys are being developed by the Argent, Ledger, and Cartridge teams, who are working to bring the technology to market.
Here are the main challenges that the gaming on chain will have to face.
Futhemore, Account abstraction, introduced by EIP-4337 bring new facilities for mass adoption and so GameFi.
It combines Contract Accounts and Externally Owned Accounts (EOAs) to make user accounts more programmable. This is achieved by separating the logic of signing transactions from the account and abstracting it out, hence the name “account abstraction”.
This provides more flexibility as it enables coding of accounts for multi-signature, private key recovery system, two-factor authentication, biometric identification, designation of a trusted third party, and multi-factor signature, withdrawal limits, key expiration.
This is an exciting development because it allows non-custodial blockchain user experience to scale. This means that even people who are not tech-expert can safely manage their private keys without risking security. For gamers, it allows more flexibility and will onboard more people into gaming.
Perks of a fully on-chain game
Interoperability
Interoperability allows players to use a wide range of assets and identities across multiple games and this is a crucial point.
On-chain games offer players the ability to use various assets and identities in different games, allowing games to be designed around existing assets rather than designing assets around games. Users feel a sense of belonging and can testify to it thanks to this interopérability. This approach expands the design space of gameplay and facilitates interaction, to create a collective multiplayer experience. Moreover, interoperability offers utility for NFT assets and aids in user acquisition. A collection can be adopted by a players in several games to show is belonging and add more utility to NFT collections beyond just short term speculation.
Composability
Composability in Web3 games refers to the ability of others to create functionality that connects with on-chain game logic and expands the possibilities of the game. This means that the community plays a central role in the evolution of the game. They can build a variety of features within the game.
The most played games are those that place the community at the center of their ecosystem. They are often called metaverse. We think of Roblox, Minecraft or Fornite. Imagine these games but with more transparency, assets that belong to us and an ease of building layers on them. The one who would like to see a turn from his game will be able to create it himself and will board with him thousands of users enchanted by this new “mode” or feature.
In on-chain games, players have the freedom to develop their own content the “studio” only create the layer 1 on which the community will be able to build on.
Community
In an open and permissionless community, players have access to a range of actions, such as discuss about the game design, game economy, patching an item, playing, trading, forking, marke social content or collaborating in guilds. This is a futur of web3.
All of these processes can be viewed as “play” and provide unique fun experiences. This will allow everyone to specialize in the areas they prefer to use their knowledge.
Guilds will finally take all their importance and will bring a narrative to the story and will develop the game as they were the creator.
Reputation and Identities
For Web3 games, it is important to develop reputation systems that can help players discover and build “social equity”. This is essential for creating sustainable economies, as the majority of players’ spending should be focused on improving their social status rather than solely seeking financial gain. I believe that in Web3 games, social connections and fame earned through time and effort (play-to-own) will be more enduring than those obtained through monetary purchases (pay-to-win). As a result, I hypothesize that retention rates will improve because money cannot replace the value of effort. Effective reputation systems in Web3 games can help to prevent issues such as bot exploitation and spamming by assigning negative reputation points to such activities. Additionally, the use of Social Blockchain Tokens (SBTs) can allow for targeted player acquisition by identifying and engaging with players who share similar profiles, thus lowering overall user acquisition costs.
By bringing the gaming system onto the blockchain, players of crypto games can establish their reputations using a pseudonym. Moreover, they can use this identity and their social connections in games that are not limited to a specific developer or publisher. This is especially significant for services that rely on reputation metrics. As users gain reputation using pseudonyms in online games or digital communities, their on-chain metrics and gaming identity can be linked to their actual identities.
Bring DeFi mecanism inside the game
By integrating conventional blockchain mechanisms into on-chain gaming, the ecosystem will have almost infinite possibilities. We can think of the game’s bank which will be peer to peer and will be able to integrate Aave for example, or even insurance to protect its assets which will be materialized by an in-game insurance which redirects to Nexus Mutual. Possibilities are huge, developpers must not lose too much sight of the fun aspect before the supersecutive aspect.
The economy in game
A smart economy is also an element to be really carefull of. Lot’s of DeFi protocol already design smart economy where it can be implement in game. Creating an internally sustainable economy where in-game transactions happen frequently, so that the creator can profit by collecting taxes on internal transactions. Many feature might be interesting in game but the game design is aso something to pay attention.
Will the founders need to incentivize the community? I tend to think that the more they use this, the more it means that they are having trouble federating a community that is capable of building and loving the game on its own. On the other hand, this vision is wrong. Incentives can be used, but in small doses. First of all they have to be done intelligently according to the users of the game. For example make a broadcast to the builder according to a KPI like the number of users. Incentive under a threshold of daily user and not need to do it above it.
Finally these incentives need to deserve 2 things :
- Bootstrap the development of the game by the community
- Retain users
Finally, on-chain games can foster even more activity within the UGC ecosystem, leading to sustained player interest and shorter production cycles. However, UGC ecosystems require careful moderation and curation to ensure that the incentives offered do not attract the wrong profile of players and end up hurting the existing community.
I will finish by saying that the game categorie is crucial. As Maverick explained very well in their article, not all types of games are accessible and made to be on chain.
MMo’s, RPG’s, MOBA’s are game styles that require a well thought out economy, a huge universe and monstrous graphic resources. On the contrary games like board games, strategy, simulation will be favored!
Issues and challenges
On-chain games face constraints due to transaction throughput limitations that make them impossible to scale to accommodate 20,000 concurrent users who change the game state every two seconds. Consequently, on-chain games need to be redesigned to work within these constraints.
On-chain gaming will take time.
- The blokchain is not yet ready for mass adoption. Progress is made like starware which is placed as promising for scaling Ethereum and where many games are placed.
- It can take 10 years before we have a game with a real use case and above all a community that will be fully committed to its development without necessarily having any other goal than fun
- The team need to build a solid layer that can be the basis of the ecosystem afterwards. A high base layer may limit the community’s ability to build, while a low base layer may make it difficult to design a game with clear goals that can’t be ruined by bad-actor functionality.
Any exemple ?
MatchboxDAO or Bibliotheca DAO are the 2 groups I spend the most time in and which seem to me the most promising. You just have to see the transparency and the level of knowledge and dialogue in the discord to really understand the community aspect of totally on-chain games. Everyone has their role whether it’s the channel developers, artists, and designers, growth everyone is building the infrastructure of on-chain games.
Thought
Pure on-chain games represent a huge and thrilling advancement in the gaming industry. Their distinct features provide an unmatched gaming experience that is both stimulating and satisfying, and they have the potential to shape the future of gaming as we currently understand it. Nevertheless, any change can only be successful if it visibly enhances aspects of the existing infrastructure and dynamics. Several blockchain implementations have emerged that are well-suited to this trend, allowing processes that would not have been feasible (or improved upon) otherwise, ultimately benefiting the users — in this case, the gamers.
Not all games need top-notch graphics and gameplay to succeed. We think that games can be divided into two types: those that focus on creativity and gameplay, and those that prioritize economics and strategy. Games like casino games, board games, strategy games that emphasize strategy don’t usually require the latest graphics cards. Instead, these games compete based on distribution, operations, game loop design, and other factors. We believe that crypto-based technology could be a natural fit for revamping games in these categories.
On-chain gaming is a paradigm shift in traditional gaming, driven by the technological progress brought by ZKP.
Crypto-native games unlock fundamentally new mechanics and leverage unique new incentive mechanisms and ownership models unlocked by blockchains.
The introduction of account abstraction through EIP-4337 provides more flexibility as it enables coding of accounts for multi-signature, private key recovery system, two-factor authentication, biometric identification, and more.
Overall, we believe that the future of gaming is on-chain, driven by both player demand and developer ambition.
Thanks to @0xRaiden and WolvesDAO that provide me really userful documents and for the feedback. Make sure to follow them !
Pokenomix is an independent research and consulting firm specialized in the design of web3 projects. If you create a project and would be interested to exchange on it, do not hesitate to contact us on our Twitter or by mail : contact@pokenomix.fr
Our private twitter :
