At the end of last year, CryptoKitties, a blockchain-based game that went viral on the Internet, has garnered people’s attention.

It appears that CryptoKitties became so popular because of the adorable kitties it features, but people who are in this industry know well that in a not-so-bright situation, CryotoKitties is successful because it opens a new door to wealth — blockchain-based games.

A lot of games have come out recently, among which some are dedicated to realizing the full potential of blockchain while others are just following suit. In such a situation, let’s look at the important facts CryptoKitties reveals:

1. Blockchain-based games have huge market potential;

2. The existing blockchain infrastructure cannot meet the algorithmic demand of game apps;

3. ICO is not a pre-placement to the launch of blockchain-based games.

The current situation raises lots of concerns, and what happens next will be a significant turning point. As the founder of Qtum Shuaichu said, the window of token launch is closing while the fine-tuning of infrastructure and landing of applications will define what happens this year. The time for delight is not over yet, but a new chapter will usher in.

Getting back to the point, we believe blockchain-based games are a new territory where what really matters is to create a new type of asset: NFT or non-fungible tokens. In games, they stand for core assets controlled by smart contracts. Traditional games provide players with emotional experience, but blockchain-based games may even bring economic benefits. Therefore, blockchain-based games are not only targeted at people in this industry, but also players of traditional games.

Is there anything we can improve in terms of technology and operation of blockchain-based games? Here is what we think:

Kitty-Fork

Most of the existing blockchain-based games are a mere copy/paste of Cryptokitties. The reasons are two fold:

a） It normally takes at least 6 months to develop an original game, not including the part about blockchain. Those who were inspired by Cryptokitties have just begun to deliver their products very recently. It is understandable that some teams just copy and paste what Cryptokitties did, but the market won’t buy it;

b）Developers don’t fully understand what blockchain-based games are.

We believe the core for blockchain-based games is the production mechanism of player assets, that is, the minting mechanism of NFT which is controlled by smart contracts rather than developers. The genetic mechanism of Cryptokitties is its minting mechanism which is only decided by genes of ancestors. However, in new generation games like Etheremon, gameplay has already had its influence on minting. Ultimately, minting of core assets have something to do with basic property, gameplay, hard and soft currency, and even a bit of luck.

Etheremon has a more complicated minting mechanism:

Compared with Cryptokitties, Etheremon allows gameplay to decide NFT property. For example, players can battle to improve their NFT level and increase the number of NFT they have. This directly affects their in-game benefits which then translate into real economic benefits.

2. ICO?

The first thing that pops into the minds of many developers is to launch an ICO. Be it a good or bad thing, here are two issues it faces:

a. What is the value of NFT, the core asset of the game? Many people say we can issue tokens. Some of you may have used the internal transaction market on Steam where props in every game have their candlestick charts. But what if Steam issues tokens? In the community and im, aren’t we tasting the bitter flavor of arrogance and wild fantasy brought by traditional Internet unicorns like Telegram?

Every prop in games on Steam has detailed transaction information:

b. Also, development of any game cannot go through the “test on humanity”. That’s why under the B2P mode, hot ip chooses to release new-year editions rather than improve existing versions. What will happen if development teams obtain an excessive amount of money through ICO?

Even star ICO projects cannot escape! Nobody cares about the landing of projects after their ICOs! It makes perfect sense that VC companies increase their investment based on development of the company. Nobody will work hard after getting a large amount of money. Test on humanity never succeeded!

Developers should be incentivized by cash flow yield of game revenues rather than ICO, which will significantly avoid regulartory risks and ensure long-term developement incentives. That’s our attitude toward this issue. Of course, there are exceptions. As some games are designed differently, small amount of funding may be raised through hard currency or premined high property assets with extra limits, which will inevitably harm the value of in-game core assets. But the market will re-adjust accordingly after weighing on the risks and benefits.

3.Scalability

Among the development teams of blockchain-based games with whom we spoke, no more than half of them realize the issue of scalability. For those who do, they simply think sharding or dpos of eos could help solve the problem.

Developers who don’t know scalability know nothing about blockchain or are simply kitty-forking. We don’t talk about them;

For those who think on-chain scaling could solve the problem, here is an assumption:

During the lifecycle of your in-game core assets, that is, from their creation to termination (for example, when they are traded), their property may change as gameplay changes. Take the entire lifecycle of a game prop for example. From its update, refinement, use to maintenance, each player can do this once each minute. If there are 60,000 players, the demand is 1000 tps on the main chain, which goes far beyond the existing processing capacity of any main chain. But how many games and players can Ethereum, Zilliqa or eos support after their sharding to million-level tps? After all, one property change in NFT consumes the same on-chain computing resource as one important financial transaction. This is not realistic.

A transitional solution is to run those processes on a centralized server of developers. But bear in mind, those assets do not belong to developers. How can we put the right to control and modify assets in a black box whose credibility is in question? How can those assets be acknowledged by consensus?

Complicated gameplay in blockchain-based games cannot be supported by underlying chains. Nor will this happen in the future. Off-chain scaling solution using state channels technology is the way out.

4. Surrounding Ecosystem

NFT Contract Standard

ERC721 has not yet been agreed upon. Other networks haven’t established relevant standards yet (at the time of this article).

Storage

On-chain resources are precious because they are expensive. Therefore, as the same with gameplay processing, metadata of NFT cannot be stored on-chain nor on a centralized server of developers. Its storage will rely on decentralized networks like ipfs.

Metadata Format

Moreover, there is no standard format for metadata because NFTs are different from each other. If technical solutions don’t work out, we may consider commercial solutions. For example, we can create an NFT wallet that matches every game and translates NFT property into human language.

Transaction

Of course we need a new generation “5173”/steam market. As said in the beginning, blockchain-based games provide opportunities of reaping economic benefits for players, which traditional games cannot do. Developers and players care the most about in-game assets transaction. Opensea and rarebits have taken one step forward, but they haven’t gone very far. There are still many opportunities in this direction.

As said above, blockchain-based games are on the rise. Issues such as — developer’s business model, core minting mechanism and its relation with gameplay, blockchain performance, surrounding ecosystem — remain to be dealt with. Those who want to make a difference in this field, please feel free to contact us and share with us your opinions.

Note: Rai Stone Technology is the developer of Trinity state channels network and Inwecrypto news/ multi-asset wallet. Wechat: kerrymeowmeow