Digital Asset Use-Cases for 2024 and Beyond, Part 2

The Evolution of Web3 in Gaming

Welcome back to our series on the use-cases for digital assets in 2024 and beyond. In our previous article, we explored the landscape of digital collectibles and their impact on status, access, and digital rights management. Today, we’re jumping into the exciting world of Web3 in gaming, where the rules of play and ownership are being rewritten.

Before we start, let’s take a slightly closer look at the title of the article. Note how we’ve used “Web3 in gaming”, and not “Web3 gaming”? It’s an important distinction to make. As an analogy, 15 years ago games that were connected to the internet were called “online games”; but now, pretty much every game is connected to the internet somehow. So there are no more “online games”, they are just “games”. I predict the same future for Web3 and blockchain in gaming.

Isn’t Web3 in Gaming Dead?

Nope, note even close. Perhaps speculation on NFTs in gaming is fading, but despite last year’s market downturn, blockchain gaming investment this past year reached $1.5B, and over 800K unique active wallets have been added to the sector over the past two years. Web3 gaming is very much alive, with many projects — including LAOS — with their heads down, building a better infrastructure, a better onboarding experience, and a better in-game experience — away from the speculation that has turned off many players.

The Current State of Web3 Gaming

The journey to mainstream adoption is still in its infancy as the sector works to address three key challenges.

Ownership and Control

While many players don’t like the concept of investing and speculating in gamers, most players do want true ownership of their in-game assets. According to the Blockchain Gaming Alliance (BGA)’s 2023 Annual Report, a whopping 76% of gamers see asset ownership as a top perk of Web3 in games. These players want to trade assets for real money rather than being confined to in-game currency trades. But there’s a catch — game studios have historically kept a tight grip on assets, sometimes even pulling the plug on items players thought they owned (not cool!). More importantly, game developers are cottoning-on to the fact that web3 means ownership, not speculation. Most gamers don’t want to be turned into gamblers, worrying about whether they are earning money. But they are interested in buying and selling their hard-earned game items for something more tangible than in-game currency.

Scalability and Dynamic Asset Challenges

Blockchain tech has a ton of potential, but it’s not inherently designed for mass asset creation, as gas fees and scalability issues pose significant challenges. And 2024’s rising gas prices don’t help!

In addition, blockchain-based assets are typically static and immutable, but game assets usually are not. In games like Pokemon, for instance, a player’s character and assets change depending on what they do/achieve, so backing them with a static technology won’t work.

Cross-Game Interoperability

Picture this: your sword from one game can be wielded in another game, or your spaceship can zoom across different gaming universes. This is true interoperability, where items acquired in one game can be used and traded in another.

It’s been a pipe-dream of many gamers for some time. However, cross-game interoperability comes with many challenges around IP concerns and technical limitations, primarily the authentication of ownership. How can gamers verify their identities across different games without centralized databases comparing user information? Game studios are unlikely to do this, due to privacy concerns, and its cost-prohibitive nature. Technically, it’s also a hugely complicated task as each game has its own unique environment, art pipeline, and programming set up.

LAOS Network: Paving the way for Web3 gaming adoption

Let’s talk about how the LAOS Network is tackling these three challenges head-on.

Asset Ownership

LAOS separates asset ownership from asset attributes, so data can live and be managed in separate consensus systems and verified on-chain. For game developers, this means that an asset can be owned, traded, lent and borrowed in any chain (e.g. Ethereum, Polygon), because LAOS assets are treated as regular ERC-721s in this ‘ownership’ chain. Whereas the properties of the asset are permanently managed by LAOS — which is a separate, decentralized consensus system, not a private server. This separation between ownership and attributes also allows creators to generate new attributes for assets, as the game is played — such as giving an in-game item like a sword new powers in a different environment. This helps to foster the adoption of User-Generated Content and diverse ecosystems, as well as ensuring that assets are traded based on how useful they are to other gamers, as opposed to simply being collectibles.

Scalability

Using LAOS’ Bridgeless Minter, gamers and game studios can mint hundreds of millions of assets on any EVM compatible chain, without paying native gas fees on that chain. Now assets can be traded, lent, and integrated across the desired chain’s (e.g. Ethereum) vast applications, facilitating the creation and exchange of in-game items on a massive scale without congesting networks.

This opens up new use-cases for Web3 in gaming. Rather than being rare, collectible items, minted assets can be created en-masse. For example; dozens, hundreds, or even thousands of unique assets can be minted for each user — even for games with hundreds of millions of users. Assets can be gifted, rewarded, or sold to any player, without worrying about scaling issues. And, because asset data is dynamic, each asset can be evolved and upgraded by how it is used in-game, ensuring that its market value is governed by utility, not speculation.

You can try out Bridgeless Minting now — check it out at https://apps.klaos.io/

Interoperability

LAOS Network permissionlessly extends metadata to match the game’s style and introduce new attributes that are evolved within the game. Think of LAOS like a superhighway that opens the door to the transfer of items from one game to another, without causing a traffic jam on-chain.

More importantly, LAOS solves all interoperability problems related to privacy, IP, commercial issues, and cost. This is because the ownership of the original asset is stored on one blockchain (e.g. Polygon), whereas the properties of the asset — which could (and should!) be different for each game, are regulated by a different consensus system: LAOS.

This is a win-win for both gamers — who can transfer items from one game to another — as well as game developers — who can boost user acquisition and retention by allowing players to use assets from any blockchain.

You can see how this works by extending the metadata of any NFT now: https://apps.klaos.io/extend

Conclusion: A New Horizon for Web3 Gaming

Our dream for a truly interconnected gaming system is closer than ever. Users can remain in the blockchain of their choice in a scalable and cost effective manner. Game developers can create an ever-changing universe where item possessions travel with the end-user. We’re working to build a more immersive, interconnected, and player-driven world than ever before, and are excited to share that with all of you.

Stay tuned for our next article in the series, where we’ll explore truly new horizons: use-cases for digital assets in real-world applications.