The advent of on-chain gaming has marked a pivotal moment for the global tech arena, serving as a unique intersection of blockchain technology and the gaming sector. To elaborate, this emerging space has witnessed immense growth over the last couple of years, with its valuation reaching $8.9 billion during Q4 2023. Moreover, reports suggest that over the next eight years, this space is set to exhibit a compound annual growth rate (CAGR) of 65.2% from 2024 to 2032.
That being said, this new paradigm in gaming is not just about incorporating crypto transactions into the existing landscape; rather, it’s about facilitating a fundamental rethinking of how games are created, played, and experienced by the end user. At the forefront of this revolution are several key technologies, each playing a vital role in enhancing the gaming landscape.
These technologies not only provide the bedrock for a host of novel gaming experiences but also address some of the inherent challenges present with blockchain gaming (such as scalability, user experience, and security.)
Zero-Knowledge Proofs (ZKPs)
ZKPs enable a party to prove to another that a statement is true without conveying any information apart from the veracity of the statement itself. In on-chain gaming, ZKPs can validate transactions or game states without revealing the players’ actions or strategies. This is crucial for maintaining privacy and reducing the blockchain’s storage and processing requirements, thereby enhancing scalability and throughput. For example, the Ethereum-based game Dark Forest uses ZKPs to enable a fully decentralized real-time strategy game in a persistent universe, a feat not achievable with traditional blockchain technology due to privacy and scalability issues.
By reducing the on-chain footprint required for verification, ZKPs significantly lower transaction costs and latency, making games more accessible and appealing to a wider audience. This scalability solution is vital for supporting complex games with numerous players and transactions. Moreover, ZKPs can foster new game mechanics based on privacy, such as secret missions or trades, enhancing gameplay variety and depth.
Randomness
Randomness is essential for creating fair and unpredictable game outcomes, which are critical for maintaining the integrity of any gaming title. However, generating secure and tamper-proof randomness in a decentralized environment poses unique challenges. Blockchain-based solutions for randomness are being developed to ensure that the outcome of games cannot be manipulated, thereby preserving the essence of fairness and unpredictability in gaming.
One such solution is ARPA Network’s Randcast solution. This advanced Random Number Generator (RNG) offers verifiable, secure, and unbiased randomness as well as other unique capabilities such as randomizing NFT allocations, ensuring fairness in lottery draws, and facilitating procedural generation within various game worlds.
Randcast adds a layer of authenticity and unpredictability, enhancing an individual’s gaming experience while ensuring that games are not just built on code precision but also infused with natural unpredictability — an aspect vital for a dynamic and engaging gaming environment.
Integrating DeFi & SocialFi
The fusion of DeFi and SocialFi with on-chain gaming is creating new dimensions of immersive and interactive experiences, where financial and social activities directly impact gameplay and community dynamics. This integration extends beyond mere transactional interactions, embedding complex economic systems and governance structures within the game’s fabric, thereby fostering a deeper connection between the game’s mechanics and its community.
The incorporation of DeFi elements into gaming, exemplified by platforms like Blast and Manta Network, allows players to stake cryptocurrencies such as Ethereum directly within games or contracts. This staking mechanism not only earns players interest, governance tokens, or higher APRs but also deeply integrates financial incentives with gaming achievements. Unlike traditional gaming environments, where financial assets and gaming worlds remain distinct and non-interoperable, on-chain gaming worlds offer a seamless blend where players’ financial assets can directly influence and be influenced by their gaming activities.
For instance, in a traditional web2 game, a player’s real-world financial assets, such as savings, have no utility within the game. However, in an on-chain gaming scenario, these assets can be leveraged within the game for various purposes, such as staking to earn rewards, participating in game governance, or purchasing in-game items. This not only enhances the gaming experience by adding a layer of financial strategy but also blurs the lines between gaming and financial management, offering a more integrated and immersive experience.
Composable, Open-Source Primitives
These aspects are vital for games to be built as open-source primitives, i.e., they provide devs with a basic set of rules upon which endless variations and extensions can be built. This is akin to traditional tabletop role-playing games, where players have the freedom to create new experiences based on a foundational rule set. Such a framework not only accelerates innovation by facilitating a collaborative development environment but also enhances game longevity and relevance through continuous, community-driven updates and expansions. The essence of this methodology lies in its ability to democratize game development, empowering both creators and players to contribute actively to the game’s evolution, thereby fostering a deeply engaged and invested community.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
