Can fully on-chain games drive blockchain adoption?
Games, including traditional sports and esports, entertain and educate, pushing players to exceed their limits and bringing spectators together in shared triumphs. Dutch historian Johan Huizinga argued that games precede culture and that human civilization is built upon games.
This perspective resonates in the digital age, where many advocate that a well-crafted Web3 game could significantly boost the adoption of blockchain technology.
Popular Web3 games like Axie Infinity and StepN have already demonstrated this potential. These games, especially during their peak, became more than just entertainment; they provided livelihoods, particularly in Southeast Asia, through their play-to-earn model.
Nevertheless, games such as Axie Infinity are only partially on-chain, where in-game assets and tokens are recorded on blockchains, but the core gameplay still relies on centralized servers controlled by the developers, making them more akin to Web2.5.
The ideal Web3 games should be fully on-chain, with all basic logic and structures recorded transparently on the blockchain, aligning with the decentralized ethos of blockchain technology.
Ref: Bankless
Characteristics of Fully on-chain (FOC) games
The concept of Fully On-Chain (FOC) games has been exemplified by Dark Forest, a decentralized strategy game engineered on the Ethereum blockchain using zkSNARKs technology.
The developer of this game Gubsheep upholds the belief that "gaming is a leading indicator of emerging technologies", and "crypto unlocks fundamentally new ways of doing things that were not possible before."
Combining these two, a crypto-native FOC game should fully embrace the architectural paradigms and principles of blockchain application development:
1. Blockchain as the source of truth: All game data is stored on the blockchain, ensuring transparency and immutability.
2. Smart contract game logic: The core game mechanics and rules are codified into smart contracts, automating enforcement without centralized oversight.
3. Open ecosystem compliance: The game adheres to the principles of open ecosystems, fostering a community-driven development environment.
4. Client-Agnostic interface: The game can be accessed through any client that connects to the blockchain, without any central reliance on the core-developer-provided client.
5. Integration of Real-World Value Digital Assets: The game incorporates digital assets that hold real-world value, enhancing player engagement through tangible stakes.
Benefits of FOC games
1. Permissionless innovation: FOC games facilitate an environment where developers and players can innovate without needing permission from centralized authorities. This openness fosters a vibrant and competitive marketplace, enhancing the game’s economic model and allowing for community-driven enhancements and modifications.
2. Fairness and transparency: By leveraging blockchain technology, FOC games ensure that all transactions and game dynamics are transparent and auditable by anyone. This transparency minimizes the potential for unfair manipulation, providing a gaming environment where fairness is inherent.
3. Interoperability: Building on blockchains, assets and data within FOC games have the potential to be transferred across different gaming platforms or environments. This could provide an unprecedented experience for gamers who engage with a wide range of games
Challenges facing FOC games
1. High entry barrier: FOC games often require a certain level of technical knowledge and familiarity with blockchain technology, which can deter mainstream gamers who are accustomed to more traditional gaming environments.
2. Compromised game experience: Due to the experimental nature of blockchain integration, FOC games can suffer from frequent bugs and glitches that disrupt gameplay, leading to a less satisfactory user experience.
3. Latency issues: The decentralized nature of blockchains can introduce latency, as each action within the game may require confirmation across multiple nodes, which can slow down gameplay significantly compared to centralized servers.
4. Botting: The open and permissionless structure of blockchain games can make them susceptible to botting, where automated scripts perform game tasks to gain unfair advantages, potentially undermining the gaming experience for real players.
5. High costs: Blockchain transactions often incur gas fees, which can add up quickly in games requiring frequent transactions. This can make playing FOC games more expensive than traditional games, limiting their accessibility and popularity.
Closing thoughts
According to Footprint data, there are currently over 3,300 Web3 gaming protocols, representing nearly a sixfold increase since 2021. However, the number of actively engaged games has not kept pace, with less than a doubling since January 2022, indicating that only about one-third of the new games demonstrate the quality necessary to retain users.
Moreover, the $1 billion total market capitalization of gaming tokens remains below the peak market share of 8.78% reached in December 2021.
With the market interest in memecoins and ETFs in this bull cycle, the Web3 gaming industry has yet to produce a definitive killer game.
As the Web3 space seeks greater mainstream adoption, it hinges on effective communication—a process American psychologist William Stephenson equates to
"Gaming."Enthusiasts in the field are still working tirelessly to innovate and bring forth the next big thing.
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