Definition and Development History of Chain Games
Chain games, also known as GameFi, refer to the use of blockchain technology as the foundation to put game assets, rules, logic, and other data on the chain, achieving a decentralized, trustworthy, verifiable, and tradable game mode. The core value of chain games lies in giving players true digital ownership, allowing players to earn profits through participation in the game, such as creating, circulating, investing, and collecting, thus realizing the Play to Earn (P2E) economic model. Chain games typically use tokens and non-fungible tokens (NFTs) to represent in-game items, characters, land, etc., allowing players to freely trade, collect, combine, and govern these assets.
The development history of chain games can be divided into the following stages:
Exploration Period: Starting from 2017, a batch of chain games represented by CryptoKitties emerged, sparking people's interest and attention in chain games. These games mainly based on the Ethereum ERC-721 standard, issuing in-game items as NFTs, allowing players to own, trade, and breed these items. These games had relatively simple gameplay, mainly to showcase the potential and possibilities of blockchain technology, but they also faced issues such as low performance, high fees, and poor user experience.
Development Period: Starting from 2018, a batch of chain games represented by Gods Unchained, Crypto Space Commander, Decentraland, etc., emerged, showcasing the diversity and innovation of chain games. These games not only used the ERC-721 standard but also other standards such as ERC-20, ERC-1155, etc., to issue in-game tokens, items, land, etc., as NFTs or FTs, allowing players to enjoy more freedom and rights in the game. The gameplay of these games also became more diverse and complex, covering various types such as card games, strategy games, simulations, social games, etc.
Explosive Period: 2021 was the year of explosive growth for chain games. Projects such as Axie Infinity and StepN sparked global attention and enthusiasm, leading to explosive growth in the market value, trading volume, user base, and funding of chain games. The popularity of NFTs also drove the development of chain games, attracting more people to participate in chain games. The development of chain games also received support and recognition from various parties, including well-known enterprises and institutions such as Facebook, Nike, Adidas, Tencent, Binance, etc., all of which have entered the field of chain games, launching their own NFT projects, metaverse plans, investment funds, etc.
Recovery Period: According to data from DappRadar, in the first three quarters of 2023, chain games attracted a total investment of over $2 billion, indicating that despite the crypto market experiencing a cold winter, capital still has confidence in Web3 games. Recently, with the overall rise in the market, the chain game market has seen a recovery. The GameFi sector has begun to rise in the crypto community, sparking discussions about the "GameFi Summer." Crypto users have high hopes for the performance of chain games in 2024.
According to CoinMarketCap data, as of December 18, 2023, the market value of chain games has exceeded $18 billion.
3A Chain Games vs. Fully On-Chain Games
Currently, the two most mainstream design directions for GameFi are: 3A-level chain games, which focus on playability, and fully on-chain games (FOCG), which focus on fairness and the spirit of the Autonomous World. With the recent outbreak of both ecosystems, the chain game sector has finally overcome the long winter and ushered in a long-awaited spring.
1. 3A Chain Games
3A chain games are a transitional form between traditional games (Web2.0) and games completely based on blockchain (Web3.0). They combine the characteristics of traditional games and certain blockchain elements, including some decentralization features, higher performance and usability, as well as balancing traditional game experience and blockchain advantages.
Big Time and Illuvium are representatives of 3A-level chain games. They activate the entire economic model through strict centralized regulation, continuously optimizing and adding new content while maintaining game revenue.
1) Big Time was founded in April 2021 by Ari, co-founder of Decentraland, and the development team comes from well-known game teams such as Call of Duty, League of Legends, and Fortnite. Big Time is a multiplayer action role-playing game for PC, similar to World of Warcraft and Diablo, combining fast-paced action combat, NFT collection and decoration, and time-traveling adventures. Big Time is also one of the earliest games to focus on the 3A concept, deployed on the ETH chain, and to ensure a smooth experience, it adopts the mainstream "on-chain assets, off-chain game" dual-layer architecture. Big Time opened its preseason on October 11, 2023. Currently, it is "hard to come by," and it is expected that the game will be open to all users without thresholds after the preseason ends.
2) Illuvium is a 3A blockchain game project founded in 2020, built on the Immutable X network. Illuvium is an open-world RPG game launched by the brother of Kain Warwick, co-founder of Synthetix. The initial game setting is similar to the game mechanics of Pokémon, with five key game mechanisms including adventure, mining and harvesting, team building, fusion system, and battle arena. Illuvium announced that it will conduct public testing in the first quarter of 2024, and later announced that it will be listed on the Epic Games Store and collaborate with the esports club Team Liquid, with all ecosystem revenues being 100% returned to ILV stakers.
2. Fully On-Chain Games
Fully On-Chain Games (FOCG) refer to games where all core logic and state are fully deployed on the blockchain, driven by the blockchain, and without any centralized server involvement. Unlike traditional games, FOCG emphasizes gameplay while achieving higher openness, decentralization, and persistence. Its ultimate goal is to establish a completely autonomous and open game world, the "Autonomous World," where games can exist permanently, independent of centralized operators, and all rules, logic, and participation are verified through decentralized blockchain, while achieving interoperability of roles/assets in different games, building a truly open and interconnected "game metaverse."
1) Dark Forest is an MMO space conquest real-time strategy game based on fully on-chain technology. Inspired by Liu Cixin's "Dark Forest" rule in "The Three-Body Problem," players explore the universe, compete with opponents, occupy planets, and resources. Dark Forest uses fully on-chain technology and zk-SNARK to deploy game rules and logic in the form of smart contracts on the blockchain, achieving real-time updates fully on-chain.
2) Loot Survivor is an adventure experimental game based on the Loot style, where players need to survive and win through exploration, combat, upgrading, and trading. The game is deployed on the StarkNet test network, using the Cairo programming language as a tool to build smart contracts. At the same time, the game uses the DoJo on-chain game engine, an open-source, verifiable engine designed to simplify the complexity of on-chain game development.
Top 10 Representative Chain Game Projects
Risk Analysis of Chain Game Tracks
User Experience Obstacles: Currently, there are technical pain points in blockchain games, such as slow transaction speed, high fees, poor user experience, and difficulty in data migration, which limits their scalability and popularity. Currently, users need to open a wallet and use in-game tokens when playing casual games, which increases the adoption difficulty for ordinary users. Simplifying the steps to improve user experience is necessary.
Token Economic Model Issues: The token economic model is still an unresolved issue. How to design and implement a sustainable token economic model still requires time and market validation.
Openness and Decentralization: Blockchain games will become more open and decentralized, achieving broader cross-chain and cross-platform interaction and cooperation. Community building and governance will become more important, forming a more democratic and autonomous game ecosystem.
Diversity and Innovation: Blockchain games will become more diverse and innovative, constantly exploring new game paradigms and creativity, creating a richer and more diverse game world. At the same time, there will be a greater focus on connection and integration with the real world, giving games more social significance and value.
Technical Risks: Blockchain games face higher technical challenges. To support a smooth, stable, diverse, and innovative gaming experience, issues such as blockchain performance, security, interoperability, and scalability must be addressed. In addition, preventing security risks such as hacking attacks, smart contract vulnerabilities, and data tampering is also an urgent issue to ensure the normal operation of games and the legitimate rights of users.
Future Prospects of Chain Game Tracks
Good Financing Momentum: The blockchain gaming sector has shown strong performance in financing, and investors are still choosing to enter the chain game sector. This indicates that investors are optimistic about the future potential of blockchain games.
Promotion of Web3 Games Adoption: Web3 games are considered one of the key driving forces for the widespread adoption of cryptocurrencies. More and more traditional game project companies are beginning to enter the blockchain industry and lay out chain game projects, indicating that there may be more top games adopting blockchain technology in the future.
Improvement of Technical Infrastructure: The technical infrastructure of blockchain games continues to improve, from the initial ERC-721 standard to the later ERC-1155 standard, and now to second-layer solutions such as ZK Rollup, Immutable X, Starknet, etc., providing blockchain games with higher performance, lower costs, and better user experience. In addition, blockchain games are also beginning to adopt more advanced graphics engines, animation technology, and gameplay, making the visuals and content of blockchain games richer and more appealing.
Metaverse Development: Blockchain games show positive signs of development in the metaverse. The complexity of the metaverse continues to increase, attracting multiple real-world participants and bringing more diversity and richness to the virtual world.
Community Participation and Collaboration: Blockchain games are adopting more sustainable, community-based models, allowing players to cooperate and compete in ways that are closer to real life, enhancing the vitality of the community.
In conclusion, despite facing many uncertainties, the future prospects of the chain game track still appear optimistic. The promotion of Web3 games adoption is one of the key driving forces for the widespread adoption of cryptocurrencies. Investors are confident in the future potential of blockchain games, and collaborations with mainstream game companies and the development of the metaverse all add luster to the future of chain games. The GameFi Summer may really be coming.
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