Gaming is one of the fastest growing sub-sectors of the Web3 industry and its most resilient verticals, with funding remaining buoyant despite the relentless bear market. More than 60% of the $7.1 billion raised by web3 startups in 2022 was funneled into web3 games. And 2023 looks to be the year that capital comes to fruition, bringing with it a Cambrian explosion of high-quality games and another level of adoption.
But for web3 games to truly gain critical mass and unlock their full potential, they must overcome one of their biggest technical challenges yet: scaling.
Fortunately, the notion that Web3 games cannot scale for mass adoption is rapidly changing thanks to the development of Zero-Knowledge (ZK) technology. Beyond scaling, the introduction of this groundbreaking technology delivers many game-changing transformations, including enhanced security, privacy protection, enhanced game mechanics, trustless gameplay, and new sources of income.
True ownership hits the scalability wall
Today, robust in-game economies are an increasingly important part of popular AAA titles like League of Legends, Fortnite, Call of Duty, Overwatch, World of Warcraft, and many more. As has been proven time and time again, there is a constant demand for customization in gaming, exemplified by the fact that the market for skins is becoming a $50 billion industry in 2022.
Unable to sate the appetite for such items, game developers are offering plenty of in-game goodies, ranging from character and weapon skins to small virtual props and avatar frames. As a result, many players have tens, hundreds, or even thousands of in-game items, usually across multiple titles, that they can never truly own, sell, or trade.
Traditional Web2 game assets have always been a one-way street, where funds flow from gamers to developers and publishers. This is one of Web2’s biggest anachronisms that Web3 aims to disrupt – by opening up in-game economies and allowing gamers to become full participants in these markets, allowing them to take these digital assets personalized between different games, transforming the game into an interoperable and immersive ecosystem.
For that to happen, however, Web3 games must be prepared to maintain the same scale at which Web2 titles currently operate, and that’s no easy task. Giants like League of Legends and Fortnite attract millions and millions of players, and everyone can have many in-game items on their account. To compete with such a massive flow of in-game assets, especially when players can also own and trade them freely with each other, Web3 games must be able to process tens of thousands of transactions simultaneously.
Meanwhile, Ethereum, the go-to blockchain for all things Web3, can only process up to 30 transactions per second (TPS) on average today – and that’s a problem.
For ZK, scaling is just the start
Fortunately, a fundamental paradigm shift is already underway. The development and imminent launch of ZK technology natively compatible with Ethereum will change the way all game development, not just web3, is created. Double zkEVMthis innovative stack brings all the benefits of asset ownership to users globally while unlocking a wide range of enhancements that will revolutionize web3 gaming.
First, scalability. One of the key benefits of zkEVM technology is the ability to achieve global scale without sacrificing security. It allows large batches of transactions to be aggregated and validated off-chain, with only the final proof being transmitted to the mainnet, reducing the transaction data burden on the mainnet.
This increases throughput by around 600x compared to the Ethereum mainnet while significantly reducing fees. This feature is essential in games where millions of high-volume, low-cost transactions take place daily.
Next, interoperability. Instead of being isolated walled gardens, these new titles will work more like an ecosystem. Assets, avatars, profiles, etc. can move seamlessly across different platforms and games, giving users greater liquidity and access.
Additionally, the process of buying, selling, or transferring items will be simplified to one or two clicks instead of having to set up and manage an entirely separate wallet app. With this global compatibility, all titles and services can now become fully interoperable in a way never before possible with traditional games.
Building interoperable assets to transfer between games is an incredibly compelling way to increase the longevity of the underlying economic value of game titles. It helps developers create a composable game world where any fan of a game literally has “skin in the game” for others in the same universe. Not only does this create the opportunity for long-term monetization, but perhaps more importantly, it gives game developers a chance to take more creative risks, knowing there’s already an audience going. take the game.
Another benefit is how ZK can improve gameplay and utility. zkEVMs, in particular, enable compatibility with smart contracts, unlocking more sophisticated game mechanics and dynamic economies within the Ethereum ecosystem.
Features such as asset staking offer the possibility of passive earning and can bring real value to items acquired in a game. Additionally, crafting new items has new meaning when they come in the form of an NFT that the player actually owns and can be traded or transferred at will.
Additionally, all assets can be nested. For example, a player’s avatar can be an NFT with multiple accessory NFTs. These assets can be linked and transported or sold together, or they can be broken down into their constituent parts. It entirely depends on the player.
There are also profound benefits for developers. Using a zkEVM and using a library of verified smart contracts can dramatically streamline the development process, reduce costs, and allow creators to focus on the fun gameplay elements that will differentiate their product. There is no need to reinvent the wheel; any studio can quickly start developing innovative web3 titles.
This technology even makes games safer than ever. zkEVMs not only increase transaction throughput and reduce fees, but they also preserve the robust security and decentralization of Ethereum.
Additionally, the use of ZK-powered IDs or Player Beacons means that only the person logged into the account can interact with it. Exploitative or malicious activity can be monitored and addressed without even necessarily needing to reveal the actual identity or data of anyone involved. It comes down to overhauling the way moderation is handled, ultimately making these environments safer for everyone.
The future is already here
zkEVM are already in progress developedand any game studio can now enjoy the benefits offered by this technology.
Whatever the need, there are now Web3 tools that can deliver the most advanced and engaging experiences to gamers around the world. Developers are no longer shackled by limitations and can truly bring their creative visions to life.