The Element of Decentralization in Blockchain Games: Where Does it Currently Stands?

The Element of Decentralization in Blockchain Games: Where Does it Currently Stands?

Play-To-Earn Games News, P2E Games News | 08 May 2024 09:50 UTC

A thorough discussion about decentralized nature of blockchain games, web3 infrastructure and creating a fully on-chain game

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Even though there are claims of "decentralization" and "trustless ownership," most crypto games are only semi-decentralized. Most implementations of what is called Web3 are actually Web2. Assets are kept on the blockchain, but the game logic, state, and data are kept in a central location.

Recently, the CEO of Lattice, Ludens, said that making games in 2023 isn't that different from what developers did in the beginning. Even in 2023, blockchains will still need to improve to handle the huge number of transactions that the gaming industry needs.

"Right now, making a fully on-chain game is a bit like making games on a computer from the 1980s. We don't have complex on-chain games yet because even Layer 2 blockchains aren't powerful enough."

Using blockchain technology to make the game accessible to people who don't use cryptocurrencies also requires developers to make important choices. For example, Aurory's Syncspace hybrid inventory system lets users keep their assets under Aurory's control while also giving them the option to move them to their own Solana wallets.

In a similar way, Julien Pellet, who is in charge of Aurory's infrastructure, said that not everyone wants to deal with the technical challenges of a cryptocurrency wallet. They were able to get more people interested in Aurory by making Syncspace and letting some assets exist off-chain.

There are groups of degens in "autonomous worlds" where all the work is done from scratch by the players. In one case, a communist group changed a game so that everyone "won" the same amount of points. "Autonomous worlds" still have a long way to go, but the early results look good.

How did Web3 Games Emerge?

Because the industry is so new, Web3 games also have to deal with a number of other problems. During the last cryptocurrency bull market, most blockchain apps tried to be investments first and games second.

During a short time when token prices went up, this strategy made the play-to-earn gaming industry very popular. If investors have interest in the token because they think it will make them money, they may lose interest quickly if the token goes down.

Games like Axie Infinity, Pegaxy, and Crabada that once promised sky-high profits for players have now failed. In November 2021, there were about 700,000 unique wallets that were still being used. Now, that number is more like 8,000 to 10,000. The Metaverse Index (MVI) token is down 95.6% from its all-time high in November 2021. This is the same as a number of other major gaming and metaverse tokens.

Step into the World of On-chain Games

There is a smaller group of developers working on implementing on-chain optimization in blockchain games. They have a strong interest in creating an autonomous world.

Fully on-chain games store their assets, logic, state, and data on the blockchain, as opposed to the cloud like their Web2.5 counterparts. Game logic refers to the rules of the game, including how players are to travel, interact, gather, and consume. However, the game state describes the current state, including the players' progress and the things they hold.

The blockchain will always reflect the true state of the game. Moreover, it paves the way for the same kind of open composability in DeFi, allowing a data center like the 1-inch Network to create Uniswap or Curve to include Synthetix and facilitate cross-asset swaps.

Players in Dark Forest's decentralized autonomous organization (DFDAO) collaborated to develop unrestricted guild structures using external smart contracts. Because of the guild system, the classic players can band together to take on the game's "whale" players, having a significant advantage in terms of both numbers and resources. Some Dark Forest players have even branched the game onto a new chain/layer 2, Gnosis Optimism, and set up their in-game stores. Dark Forest Arena added features to the gaming experience that had been lacking.

Communist Take Over

Instead of waiting for a central patch from the game's developer, community gamers can add their creative modifications. The Web2 community has seen the rise of multibillion-dollar game franchises like Dota and Counter-Strike thanks to a level of bottom-up, creativity that goes way above the scope of traditional video games. Dota was originally developed without Blizzard's or Valve's knowledge or consent as a mod for their Warcraft 3 game, and Counter-Strike originated as a mod for their Half-Life game.

Since the on-chain industry is still in its infancy, developers use varying terms to describe the decentralized nature.

There is widespread recognition that on-chain games address challenges, and not just in terms of scalability. According to Ludens, the lack of a unified set of game design guidelines for developing blockchain ledgers is a major contributor to the nascent stage of on-chain games. "Game designers need to give more thought to how they can take advantage of a blockchain ledger's features in their work." Increasing the capacity of the chain infrastructure will greatly improve the scalability of on-chain gaming.

The Element of Decentralization in Blockchain Games: Where Does it Currently Stands?
The Element of Decentralization in Blockchain Games: Where Does it Currently Stands?

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Decentralization in Blockchain Games, Web3 Infrastructure, and On-Chain Gaming

1. What is the current state of decentralization in blockchain games and Web3 infrastructure? Many crypto games claim to be decentralized and offer trustless ownership, but most are only semi-decentralized. While assets are stored on the blockchain, game logic, state, and data are often centralized. This means that while certain aspects benefit from blockchain technology, the core mechanics of the games remain in central locations.

2. What was Ludens, CEO of Lattice, referring to regarding game development in 2023? Ludens compared making games in 2023 to the early days of game development. Despite advancements, blockchains still struggle to handle the transactional demands of the gaming industry. This limitation prevents the creation of complex fully on-chain games, even with the existence of Layer 2 solutions.

3. How does blockchain technology make games accessible to non-crypto users? Developers face the challenge of making blockchain games appealing to players who may not be familiar with cryptocurrencies. Solutions like Aurory's Syncspace hybrid inventory system allow users to keep assets under control while giving them the option to move assets to their wallets. This approach aims to balance accessibility with the technical challenges of cryptocurrency wallets.

4. What are "autonomous worlds" in the context of blockchain games? "Autonomous worlds" refer to gaming environments where players build and shape the game world from scratch. These environments are typically more decentralized, allowing players to have a direct impact on game mechanics and outcomes. While these worlds are in their early stages, they show promise for increased decentralization in gaming.

5. How did Web3 games emerge? During the last cryptocurrency bull market, many blockchain apps prioritized investment potential over gameplay. This strategy led to the popularity of play-to-earn games as tokens appreciated in value. However, when token prices declined, games like Axie Infinity, Pegaxy, and Crabada suffered. The focus on investment undermined the long-term sustainability of these games.

6. What is the concept of on-chain optimization in blockchain games? A smaller group of developers is working on implementing on-chain optimization in games. They aim to create fully on-chain games where assets, logic, state, and data are stored on the blockchain itself. This is in contrast to Web2.5 games, where some elements may be on the blockchain but others remain on centralized servers.

7. How do fully on-chain games differ from their Web2.5 counterparts? Fully on-chain games store all aspects of the game, including assets, logic, state, and data, on the blockchain. This provides transparency and eliminates the need for centralized servers. Game logic defines the rules of the game, while game state describes the current state of players' progress and possessions.

8. What advantages do on-chain games offer? On-chain games ensure that the blockchain accurately reflects the true state of the game, enhancing transparency and immutability. They also allow for open composability, similar to the decentralized finance (DeFi) space, enabling innovative interactions between different on-chain protocols.

9. How have players in decentralized autonomous organizations (DAOs) impacted the development of blockchain games? Players within DAOs like Dark Forest's DFDAO have collaborated to develop guild structures using external smart contracts. This empowers players to collectively challenge powerful players within the game, creating a more balanced and fair gaming environment. Some players have even extended the game to new chains or layer 2 solutions.

10. What role does community-driven modification play in on-chain games? In the on-chain gaming industry, community members can creatively modify games without waiting for centralized patches from developers. This bottom-up approach has been successful in the Web2 world with games like Dota and Counter-Strike, which originated as mods for existing games.

11. Why is there a lack of standardized terms in the on-chain gaming industry? The on-chain gaming industry is still in its early stages, resulting in varying terms used to describe its decentralized nature. The lack of a unified set of game design guidelines for blockchain-ledgers contributes to the nascent stage of on-chain games.

12. How can the scalability of on-chain gaming be improved? According to Ludens, increasing the capacity of chain infrastructure is crucial to enhancing the scalability of on-chain gaming. Game designers need to consider how to leverage the features of blockchain ledgers in their designs to overcome existing challenges and limitations.

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