As a seasoned fintech professional with over two decades of experience under my belt, I’ve witnessed the evolution of the digital landscape from close quarters. The rise of gaming blockchains is nothing short of revolutionary, and I am genuinely excited about this transformation.
Web3’s momentum is significantly influenced by gaming, with approximately one-third of daily active dApp users being gamers. The development of gaming within this space is propelled by market trends, as an increasing number of people are adopting GameFi. Due to the influx of users, blockchain games often face challenges in handling traffic, which in turn leads to the creation of innovative solutions such as game-centric blockchains. These advancements simplify user experience and onboarding processes, ultimately attracting a large number of new players, thus fueling growth in high-quality gaming-focused blockchain networks.
How the idea for gaming blockchains popped up
The growth rate for blockchain gaming is breaking records: In May 2024, an unprecedented number of three million unique wallets were actively participating daily in the industry. This figure reached a new peak! Fast forward just two months later, and GameFi’s daily Unique Active Wallets (dUAW) surpassed its all-time high with four million users – that’s nearly one-third of the total 15 million daily users across the entire decentralized app market.
Initially, Ethereum-based blockchain games were primarily catered towards tech enthusiasts who were willing to endure various inefficiencies and suboptimal user experiences due to their passion. However, as time went on, it became clear that this wasn’t sustainable: frequent network congestion issues plagued the GameFi sector, leading to long waits for transaction approvals and sometimes high fees reaching tens of dollars. This situation underscored the need for gaming blockchains to become more scalable.
As a researcher exploring the realm of gaming, I’ve encountered a challenge when it comes to constructing games on Ethereum L1 – the limited control over the development process and the inability to customize the network to meet our specific game requirements. This predicament prompted us to consider the innovative concept of developing specialized blockchains tailored for GameFi, offering more flexibility and adaptability to cater to the unique needs of our games.
The gaming chain pioneers
One of the early blockchain platforms designed with scalability as a priority was WAX, which was initially developed in 2017 to speed up e-commerce transactions but later shifted its focus towards gaming. Today, it ranks among the top ten gaming blockchains by daily active wallets (dUAW), boasting around 132,000 users, and has partnerships with notable entities like Amazon Prime Gaming and the Epic Games Store.
Since then, numerous blockchains focusing on GameFi have emerged, but one has distinguished itself – Ronin. By 2020, Sky Mavis, a company renowned for creating the groundbreaking game Axie Infinity, decided to focus on building an L1 ecosystem instead of just a single game. They moved their flagship games, Axie Infinity and Pixels, onto the Ronin network and dedicated their efforts towards improving it.
Approximately two years before Ethereum’s transition (known as The Merge), the team unveiled Ronin’s test network. At that time, Ethereum was using a Proof of Work consensus algorithm, and plans for scaling the biggest decentralized application network were not clearly defined yet. However, when Ronin introduced its Proof-of-Authority system (later upgraded to Delegated Proof-of-Stake), it was groundbreaking. This change significantly reduced energy consumption almost to zero, sped up block times, and lowered transaction fees to less than $0.001.
As an analyst, I’m thrilled to share that my endeavors with Ronin have proven fruitful. Today, our ecosystem boasts a impressive lineup of 15 games, with even more on the horizon. In the month of June 2024, the daily active users on our network outshone any other blockchain, including giants like Tron and Solana, and soared past the two million mark.
GameFi-centric blockchains have indeed propelled growth within the industry, yet they didn’t resolve all its challenges. Crafting a custom blockchain is laborious and costly, and it lacks the agility to swiftly incorporate emerging advancements. Consequently, industry stakeholders are now focusing on Layer-2 and Layer-3 infrastructure, as these solutions offer a more flexible approach.
Exploring the potential of new layers for gaming
Following the launch of Ronin, Ethereum began its expedition towards improving scalability. Networks such as Optimism, Arbitrum, and others came into existence, substantially decreasing gas fees and boosting transaction speed within the Ethereum environment. Notably, these networks made strides to bolster the GameFi sector by modifying their infrastructure to cater to game developers.
The next stage in this development brought forth L3 networks, marking a truly thrilling point. They reduced the block time to between 100-300 milliseconds and approached instant transaction confirmation, enabling the processing of thousands of transactions per second (which is significantly higher than Ethereum L1’s 12-15 transactions per second). Furthermore, not only did they decrease block times and transaction fees, but also made it simple and customizable to deploy L3 networks. This simplicity and customizability offered unprecedented possibilities for game development within the Ethereum ecosystem.
Blockchain gaming platforms, like PlayBlock, are advancing the web3 technology revolution to elevate the blockchain gaming experience significantly. For instance, PlayBlock, a GameFi L3 blockchain operating on Arbitrum Orbit, utilizes account abstraction to bypass numerous transaction confirmations, ensuring seamless gameplay without interruptions. This network’s relayer technology supports users’ transactions, offering an entirely gasless gaming experience. Additionally, the self-managed wallet adhering to the ERC-4337 standard eradicates the need for seed phrases and private key management, making it more convenient for players.
Essentially, for those playing on the latest L3 platform, there’s no need to handle wallets, verify numerous transactions, or pay gas fees. This simplification eliminates the intricacies usually linked with blockchain gaming, making it a seamless experience for many web2 veterans who may have been deterred by GameFi due to its complexity.
More gaming blockchains are to come
For creators focused on GameFi, establishing L2/L3 chains is currently a top priority as they offer unparalleled scalability and customization. An additional advantage is their capacity for rapid innovation: larger networks like Ethereum struggle to implement major changes swiftly, whereas smaller ecosystems possess the agility to do so more efficiently.
Companies in the industry are providing another round of growth by delving into gaming platforms, and Sony Group is leading the way with their announcement of Soneium, a blockchain focused on security and user-friendly gameplay that runs on Ethereum’s Layer 2. It’s likely we will witness similar blockchains emerging from companies such as Ubisoft, Rockstar, or Epic Games, given Ubisoft’s focus on web3.
In contrast to initial level (L1) solutions, intermediate (L2) and advanced (L3) ones require significantly less work to initiate. For example, there are rollup-as-a-service options available that facilitate the swift deployment of customizable L3 networks. Due to the attention from key players and existing frameworks, it’s probable that we will witness the emergence of new gaming-oriented blockchains in the near future, paving the way for GameFi to become mainstream.
Yaniv Baruch, currently serving as the COO at Playnance, boasts a wealth of experience in the fintech sector. He embarked on his professional journey back in 2004, since then climbing the ranks to assume significant positions within notable fintech and web3 entities like Anyoption, Daweda Exchange, and Oobit. Over the years, he has accumulated a rich skill set spanning fintech, GameFi, and blockchain technology.
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2024-09-09 14:10