ep 21 – Web3 Gaming & Onchain Games

Transcript

[Music] welcome to web 3 with A6 and z a show about Bill knew the next generation of the internet from the team at Asics and Z crypto that includes me your host Donald joxie this show is for anyone whether entrepreneur developer business leader policy maker creator or gamer and today's all new episode is all about web 3 games and on-chain gaming as enabled by blockchains and crypto our expert guests both from Team Asics and Z crypto include Ariana Simpson General partner and Eddie lazarin CTO as a reminder none of the following is investment business legal or tax advice please see asicsnz.com disclosures for more important information including a link to a list of our investments we also

link to the various posts referenced in this discussion in the show notes so be sure to check those out as well the discussion takes us on a high-level tour through the entire space from degrees of web 3 to fully on chain games trends like play to earn and its Evolution briefly touching on trends like metaverse and where that come comes in as well as covering broader themes such as design and user onboarding open source phases and Frameworks of Technology Innovation and more weaving in World building throughout we also pulse check where we are in terms of Readiness what's working what's not working and where the exciting design spaces are but we begin with a quick overview of what is web3 gaming okay can you give me like a high level

overview of web3 gaming what I'm looking for here is kind of the map and the terrain because I like to do kind of a taxonomy in all my episodes to kind of lay out you know this whole landscape sure so I'll start by saying that the whole category of web 3 games is super super new because until really just a couple years ago it wasn't possible to have this kind of experience or Game World on chain at all because of infrastructure limitations this I think is really interesting because it applies a new set of constraints to game makers and whenever there's constraints within a new medium it's both a challenge and

an opportunity but constraints can often kind of breed creativity as well so we obviously work very closely with our games fund and I would say that when we started seeing web3 games emerge there were maybe you know a few you companies a month and that might have been a very small percentage of the total of companies that were coming to the games fund and what we've seen is that a significant majority of games companies include web 3 components of some sort another attribute of web3 games which isn't necessarily a requirement but something that we have often seen is the presence of nfts or non-fungible tokens

which lend themselves really well to existing in-game context because they can be used to represent a variety of different in-game assets or in-game elements so in terms of what specifically goes into a web 3 game one of the important elements we've seen is this idea that players can be owners and what that means is that they're not just accumulating value for the makers of the game but actually able to own their assets own their swords own their tokens and be able to sell them transfer them move them out of the game universe and so not only do they have a sword in the

game context but they can then take it to openc or they can lend it out or they can use it potentially in a different game context so that I think at a very high level is sort of the broad umbrella of what we're talking about so it's funny because I think people forget this because vitalik patreon has become such a icon in like crypto and web 3 world for obvious reasons as a creator of ethereum but people forget sometimes his backstory that the whole reason he was motivated to enter a cryptocurrency was because he was a World of Warcraft player and his character I think got like what happened like it got like nerfed or something I can't remember I forgot no I think they deleted it or like you lost some items yeah but it was like that basically because this idea I

just want to emphasize and pause on this big idea you mentioned Ariana which is that it's actually a big deal because there are people who spend so much time essentially doing free labor for others and on top of it people can literally just like whip the rug out from under you so just to kind of pause on the impact of that and why that matters so yeah totally and in fact I want to talk about why that is such a potent and interesting idea I mean the way that I would describe the taxonomy and space of on-chained games is that there are three key interesting properties that crypto brings to games financialization composability and consensus you know I think the financialization element is what has made a lot of people both love and hate

web 3 games totally it's very simple and it has its pros and its cons but financialization is just a consequence of the free trade ability of anything the minute you can just move it around and exchange it without trusting some third party or requiring the permission of the game developer or something like that you can immediately get financialization but then more interestingly and more profoundly there's composability and consensus composability is like a programmer's favorite computer property it's the property that means that you can take someone else's code and mix it with your code or remix and combine it with another thing yeah and make something new and make something better this is one of the most exciting and interesting

things about software in general and games also enjoy composability we just typically call them mods or extensions oh yeah or things like that and don't even get me started about how big mods are I hope we get a chance to talk a little bit about mods oh yeah I came up in the age of like you know doom and whatnot and that was like some of the original OG modders but yeah totally and then there's consensus and consensus is a really interesting one and this is kind of where the vitalik idea comes into its clearest contrast is that what happens to your item or character or experience or whatever in the context of a game is fully and totally decided by the game creator and

that's always how it's been and that's just a total fact of reality when you're playing with games so if something goes wrong in the context of the game it's this pure hierarchy where the game developers have unilateral control over the experience of the game but in crypto you can create a Network that has enshrined rules that enforce what happens in the context of that program and if a game is a program then we can make a game where the game developer original developer no longer controls those rules and so you can now create a game that is decentralized or a game that exists far beyond the scope of its original creators unchain games so

far just to connect back with the original question which is how do you taxonomize on-chain games today we've begun to explore financialization and that's what we've seen the last couple years we have some early interesting experiments and composability like dark forests and a few others and that's the space that a lot of developers are playing right now and we haven't had too much in the consensus realm but that's a very interesting area for games to go so each of these are different different in terms of how intuitive or how complicated they are and we've gone different depths into each of them but that's how I think about the way Engineers are experimenting with what crypto offers games that's great on that

note Ariana so Eddie's taxonomy really actually is really about the features than necessarily types and how those features are being deployed and the Readiness of them let's start with one of them financialization which let's just take this one head-on where does play to earn fit into this and how is that one evolved especially because you earlier when you talked about the definition of this broader swath of crypto enabled gaming in general you mentioned how the creation and some of the capture of the value is one component I mean my perspective on it is that it's really awesome and it's actually a superior model it was not perfectly implemented in the first iteration so I think what we're

seeing is taking what was learned from V1 and making improvements and modifications regulating an economy whether it's a real economy or an in-game economy which is nonetheless very complex is super challenging and so a lot of the issues that we saw around inflation were really just the byproduct of early experiments with a fundamentally new and very exciting model new things are almost never implemented perfectly on the first time so I think that's you know a very common problem but I think there's still a lot of enthusiasm for the approach it's undeniable that a lot of people benefited very materially in the

Philippines and other parts of the world during the pandemic from playing play to earn games specifically axi Infinity which really kind of kicked off the initial movement and was really life-changing for a lot of people axi Infinity really was so much in the Limelight just as a result of the speed and vigor with which people started to play it and adopted it so that team and that ecosystem really deserve a lot of credit for having kind of developed a new and very exciting model which is now in the process of being refined both by that team and other teams who are taking that concept saying yes it is

fundamentally better for players to actually participate in the upside of the value that they're creating and instead just tweaking parameters tweaking you know sinks and faucets and making sure that the economy is balanced in a way that makes for a more sustainable Game World what are sinks and faucets again so within any kind of token Network you will have syncs which are basically places that tokens or ways that tokens are taken out of circulation so ways that tokens are used that might be to breed a new nft or to level up in some way and then you have faucets which are how people earn tokens within the game that's great on the play to earn I

think there's the expression itself then there's the model where the model is you know does it make sense to make games where players through their actions can earn money yeah or earn valuable things and there will be a lot of games where players can take economic value out of the system or accumulate economic value in the system and that's totally going to be a thing that needs to be tweaked but I don't know what's going to happen to the phrasing right I don't know whether it would be useful even to address the distinction yeah I mean it's already evolved right because we first saw play to earn which sort of indicates a strong financial bent obviously that's true the two earn that's a good point I mean PPE very

direct in its sort of Nod to financialization but then it morphed into play and earn and I think play and Dern is a much better place for us to set our expectations in the sense that these games were not necessarily designed to be a workplace at least for the majority of players and so you want to have a game in which people are playing and earning they're having fun at the same time they're also benefiting and capturing some of the value that they've produced but they're not necessarily just there to grind so as the actual dynamics of how these economies are managed have shifted it's also been interesting to see a shift in

the nomenclature it was played to earn and then it's play and earn and eventually I think honestly it just becomes part of games it won't even necessarily be defined as like a separate thing yeah it's infinitely better to be clear than play or earn which is essentially what seems to be the thing that is like either you play and most people only play or you earn by taking assets off market like I'm thinking of gold farms and stuff where you would take assets out and like and even like in the olden days gosh to get even more old school you would literally take assets and try to sell them like in other third-party secondary marketplaces even in person absolutely yeah believe me one of my brother's primary sources

of income in high school was Diablo 2 items and Counter-Strike ghost skins after that yeah Counter-Strike is particularly one of them actually because people really love like the weapons treasury boxes and there's all these things that you can really earn and spend time getting yeah yeah and that's the thing is that there were flaws in economic models we've seen experimented with so far but if you take the fundamental premise the idea is that right now the norm in games is that when players pay 100 of those proceeds go to the game company and the fundamental experiment here is what if some portion of that goes to players under certain conditions and it's incumbent on the game designer to

decide what players need to do to get how much and when to some degree to kind of start the initial conditions of the system and create it in a way that it's balanced and reaches a sustainable equilibrium but that fundamental idea is an interesting idea and look like if you go to some of the most popular gaming models in mobile games today they survive off the idea that some players are willing to pay quite a lot to keep playing with the benefits and luxuries and capabilities that they want and many other players do not and well I don't know I'm going down a darker path so yeah I know you're not going down a darker path it's actually very important point to pause on which is you're

basically talking about the days and still current days frankly of pay to play and essentially like these very expensive whales that really make the the whole economy work exactly in games where some small portion of players pay and the others do not what's happening is that the players that pay are paying for content and the content is having a bunch of other players to crush right that is what it is so the players who are not paying our content for the players who are paying and what they are being compensated with in order to exist as content is a little bit of fun but there's a lot being left on the

table here what if they could be compensated in some way for doing that and also have fun doing it right I think it's really interesting to experiment with systems that can more richly incentivize and reward people for all contributing with each other to create an enjoyable gaming experience that's an interesting design space yeah and I would just add that you guys are talking about this under the categorization of expanding this definition a notion of financialization and what value actually means but it's also worth noting that value does not necessarily mean playing or being played it can also mean things like giving good feedback on UI and evolving narratives and stories telling for others and creating new materials or

things that people can trade or being a community moderator and a supporter and someone who really supports the ecosystem and right now those folks are doing essentially another form of invisible labor that is not being compensated as well and that's also value creation exactly so if in that financialization composability and consensus framework these first web3 games have been experimenting with financialization and that touches on who's doing what kinds of work and being composite of What kinds of work and where are the value flows going all the different kinds of value flows and it's incredible that we get to experiment with that that hasn't always been true and crypto makes it a little bit easier to make explicit the different kinds of

value and the different kinds of objects and the flows of these things it makes them legible to experimentation and that is what's really interesting about unpacking the financialization angle we're going to see all kinds of cool stuff there it's just there's a new set of tools from making visible and legible and manipulable these components of games there's a new paradigm in town oh my God you have to hear my Golem impression except I posted this in our slack I do it with my niece all the time my precious sorry I can't remember you're killing me Jesus Christ I'm a little loopy it's a

long week guys I know the feeling anyway back to Ariana one last point on this notion that you mentioned about the financialization and sort of the initial growing pains and opportunities of play to earn and play and earn and the evolution of that term I really think this is a cliche thing to mention but I think it's worth mentioning I say cliche because it feels like so many VCS mentioned Carlotta Perez's framework and book and frankly I don't think any of them have actually read it I have oh you have yay okay so maybe you could quickly no I would never quote a book I haven't read are you kidding me that's what I absolutely love about you actually do you want to quickly summarize what it is because I actually think it's very fitting here sure so in Carlotta Perez's book technological revolutions and

financial Capital which by the way she wrote well before Bitcoin was a twinkle in anybody's eyes she really traces the evolution and history of a number of very important technological revolutions including Automobiles and the railroad and things like that and it's really interesting to note that she's able to trace a very clear recurring pattern of how these Technologies start out and then evolve which generally looks like there's initially an invention or some sort of discovery that holds considerable promise but is still very much in its infancy then there's a period of enthusiasm and financial investment

behind this idea and into this category which causes a lot of activity funding activity entrepreneurs move into the space there's a lot of excitement and a lot of that is real but the financial expectations or the expectations of the capital really get ahead of where the technology actually is at that point in time and so you get them the sort of boom and bust cycle where expectations get rained in there's a sort of disillusionment period prices fall and then people seemingly give up on the category for a period of time but you know fortunately Builders continue to build and then you enter sort of the

golden era of that particular technology which is when it becomes more mature it's actually can be commercially applied in ways that are are more meaningful not just more meaningful but also more mainstream yeah absolutely it reaches mainstream usage and expectations are more closely aligned with reality and I think we've obviously seen a lot of that pattern manifest in the web 3 space as well which makes sense considering we really think about this as a new paradigm in technology more specifically a new Computing Paradigm so no surprise in that regard that it sort of fits so neatly into this framework completely and I think besides being a totally new kind of Technology it's also unique in that it opens up new

things to financialization because it creates digital objects that are freely tradable by anyone in an ultra-democratized way so that means there are fundamentally more new types of participants who can start to use the technology and experiment with the technology and the technology is fundamentally about experimenting with incentives and coordination and Collective assets yeah crypto allows for people to make digital objects that can be freely traded in their own venue normally the existence of a Marketplace requires state-like powers to create and make functional a marketplace now the engineers can create the marketplace that allows these things

to emerge incredibly quickly yeah totally and then back to the taxonomy there's games where there's just like crypto enabled gaming economies then there's games where there's play to earn that's related to that and then there's games that are just about the technology and being on chain so let's switch gears and actually go deeper on unchain gaming so we've talked about these qualities you know financialization composability consensus we've talked about the underlying components that make this uniquely enabled by crypto and about the deployment phase which we're way far off we're not even I think we're the very beginnings of like even before the installation phase here if we're using the Perez framework so what is on-chain gaming and then let's actually break down what trends we're seeing in non-chain gaming specifically well there are different degrees of web3 or crypto

nativeness if you will in the sense that some games only have assets that are actually stored on chain whereas other games have much more of the actual game mechanics so the logic and things like that that actually reside on chain so fully on-chain games are the strong form version of web3 or crypto games in general what we mean by that specifically is that you're not just talking about having nfts or tokens within the game but actually putting more of the core game architecture either the logic or or other components basically the whole game is running on

chain that's what we mean when we say fully Unchained yeah that's exactly right yeah by the way one quick note just for the listeners for context like when you say strong Ariana I think this is what you mean you're not just talking like in a normative label like a judgment like this is strong versus weak it's actually a framework that Chris has used which is this idea that the stronger form of Technologies are often the ones that will dominate the future but that oftentimes along the way there's a quote weaker form sometimes like a good analogy be like the hybrid Cloud before we got to you know like open Cloud or things like that that sort of is on the way to making things happen because very few entities can actually make such a big leap without that sort of intermediary so that's kind of a way

to think about the strong versus weak form of the technology yeah and specifically as it pertains to games it very much not used in a judgmental sense in that in my opinion there will be some of the best games will be the quote unquote weak form of on-chain they'll just be really well designed to you know have amazing art and be really fun to play and then some quote unquote strong form on chain games will actually not be that great and some will be amazing so I think there's plenty of room for great experiences for gamers in either of those categories so that's why I think we're seeing again it's a super early category super early days but it is

attracting a number of really smart builders most of whom at least from what I've seen are very crypto native so they're not necessarily web 2 game makers who are coming into web 3 which is what I think we've seen a lot of in some of the quote unquote weaker form version of games but many of them are brought up in the crypto ethos and are making their first games within this new paradigm so that won't necessarily always be the case but I do I think it's sort of an interesting distinction from a talent perspective I would also go a step further and say that not only are they bringing in crypto native Talent which is great and this is for better and For Worse from both the

accessibility point of view as well as this in a great way from the Builder point of view because it's really protecting the space for a group of people to build together without being like interfered with all these like random inputs but it's also kind of insidery in the sense that you have to be kind of a really good programmer and a smart contract programmer to actually even play most Unchained games I've found yeah and I mean I don't even know Eddie if you would think of gas optimization challenges as a form of Unchained gaming because I think they are and again very smart contract programmery insidery sometimes the gas golfing and sometimes it's for fun and it feels a little self-indulgent other times it's actually very useful because it's trying to help people figure out how to be efficient in a world of constraints where we have things haven't

arrived yet so it's kind of a both I don't know if you'd add that to it I totally think that they are I mean there are genres of games that are traditional games that are for programmers right all the zaktronics games which I'm a huge fan of the factorio Dyson severe program satisfactory corner of the world that's basically games for programmers by programmers it's an insane little corner hardly mainstream well you could argue some of it's gone into the mainstream but yeah they're relatively inaccessible and if you go to that framework I'm talking about the financialization and composibility consent census framework I think it actually Maps really cleanly onto the weak and strong form because financialization is simpler two it just requires free tradeability of discrete

objects or fungible tokens that's it and you get financialization which is why a lot of the earlier experiments are traditional games with digital objects that emerge from them that are tradable composability is where we get more into modern world or user generated content world where there's a fundamental game it still has centralized characteristics or is generally centralized but components of the game have been opened up to extension and remixing and recombining and then consensus all the way at the extreme is where the game logic is controlled and governed by a blockchain that has its own consensus so once it's sort of emerges from the hands

or leaves the hands of the original creators it is governed by the rules that it was designed to be governed by and that might be nobody that might be the gamers themselves that might be the game creators it could be a council it could be a random event in the game that determines what happens right it could be anything we've seen the fewest experiments all the way at the end and we've seen the most experiments at the beginning in financialization it's funny you say that though especially when I think about phenomena like Dom Hoffman and the loot game community and things like that I don't know does that count as on chain I don't know like where does that fit yeah that's part of what made loot so compelling is that it had these characteristics that were available to

on-chain programming but that's it like they didn't have the game structured had the properties that you would use in the context of a game so it kind of alludes to an Unchained game it's like here's these things they've been scattered around and now you can use them as fundamental building blocks that's like what a fully Unchained Game author wants to get to like if you made a game that maximally took advantage of blockchain's consensus that would look something like creating a game world and game rules that are just freely and permissionlessly available to be played with got it so you can see how glute kind of gestured at this idea that well you can just put this out there and create a building block for others to use or others to play in and where do you guys think something like Dark

Forest comes in I kind of want to start naming some examples of early on-chain games and the forms of them just to give people people a bit of a flavor like what do you think works and doesn't work about it where does that come in I think Dark Forest is the best example we've seen that takes advantage of all three and actually takes advantage of financialization the least it did have a little bit because there were some nfts that were created as the result of Dark Forest and those kind of traded around but most of the experimentation was in the composability and consensus area so to link it back to those ideas composability people could create new extensions of the game logic in Dark Forest without any permission or explicit Access Control lists or

something designed by the dark force creators they could just come in there and start to experiment with it and combine things and they did they made plug-in markets they made new types of uis all kinds of cool things that are only possible with really deep composability and then on the consensus front once a game instance started and you can still go make a dark Forest game Lobby now it's out of the hands of the game creators they started the rules kind of like a blind watchmaker so to speak and kick off the universe in a burst of Randomness and it just goes until it completes and that means that it's working it has rules that are being enforced but not by the game makers but by the blockchain cool one question for you guys I just want to go back to the

definitional part of it why not just call on chain gaming just decentralized gaming like what's the difference no difference I mean the best name that's not just the literal description is the lattice team and Justin glibert who was one of the original creators of Dark Forest he co-runs Xerox Park and stuff like that he calls it autonomous worlds because he's trying to get at this idea that the world once it's set into motion just continues because he loves the fully maximally strong form he loves the idea that the game can have its own consensus outside yeah I love that actually because I remember reading the post that the Xerox Park folks put out on unchain procedural generation which it has this great line in there about

how because I'm very into World building as a narrative editor person I don't know how to play it on chain gaming to be clear but I love this idea that they had this really great lineup stuck in my head which is like you can compress a complex world into an executable and I literally have this image that you'd like run a program that's like so lightweight and you can unfurl the full world out of it it feels very exactly genie in the bottle like let the genie out of the bottle and see what happens like it's extremely exciting someday on a zoom I'm gonna just play for you the world generation procedure for Dwarf Fortress world it's gonna blow your mind what does that mean though tell us about that visually for us no oh what happens is it kicks off a process and like a

little progress bar and then a map like a world map a square begins in like the ocean forms first and then the landscape and then mountains and rivers start to form and forests oh wow and then little Villages pop up and they start to spread and you can see them kind of like spreading and clashing and then some some little towns disappear it generates you decide but it can generate a thousand years of history and names on the left side are scrolling by like names of Heroes in history and epic written works are just going by and they're all being randomly generated and they constitute the history of the world that you just made by running the program uh yeah I want to watch that now that's awesome it's really beautiful I love that so what's really fascinating

though so that reminds me a lot of this idea of like emergent systems and just you know the thinking around complexity and complex economies and whatnot and funnily like this is very bottom up which is what we love about you know things crypto it's not top down but on the flip side two things I want to make sure I push you guys on one do you really want to decentralized created world like the best created products are not necessarily decentralized created and then two the other component I want to also bring up is that honestly in some of the early crypto enabled gaming economies it feels like you actually have to introduce Central planning to make them work and that feels kind of confusing for what we're talking about here so let me just throw that kind of open-ended set of questions for you guys

to help me tackle and break down for the listeners so I think it's difficult to have to have cohesive world if there are no at least Frameworks put into place by the initial creators of that world which at the same time on the other side if you have a fully centrally planned world the creativity will sort of be limited because one of the things that makes Bottoms Up places really interesting is the fact that they have contributions from a lot of different kinds of people so I think it's interesting to think about how can we provide the tools and Frameworks for people to be maximally

creative in these worlds without necessarily imposing too much structure I think that is a challenge that hasn't been really resolved yet but to me that seems like a really interesting design space because you can take advantage of the fact that people are so creative and bring so many different things to the table but without any sort of guidelines it can become massively chaotic and not cohesive so I think I think that's sort of what could be a really interesting output the history of designing games so far has always been a central set of authors make a game and are the totalitarians over that game that is games have always been designed in a

centralized way and that's great we've learned a lot about that we know a lot about it those decades and Decades of experimentation and learning there and we have near zero knowledge about what it takes to make a game in a totally decentralized way the closest we have is maybe like a Minecraft where many people make mods and then you can run your own server and you can kind of customize the rules and then other people can come and play on your server but even then when they come and join that server and play with you they are playing according to the set of rules and mods and everything that the controllers of the server chose right so it's all kind of fractured around and everyone's free to experiment but they're experimenting like a painter or like a DJ they're not experimenting

all in the same sandbox at once that's right just because there's a bunch of mini worlds doesn't mean that there's actually a decentralized world exactly and that's a subtlety that a lot of people Miss I think is really really important is allowing people to on their personal device or their personal server to Cobble together their experiment is amazing and I love that and that's decentralized in a sense but it's not decentralized in the sense that every time you step into some game world you're stepping into a place that has a king somewhere there is a king and what would it be like if we could make game worlds where there is no king or the rules are made by Nature right and the game designer made in nature and then walked away

that's really such a beautiful idea I credit Justin glibert with helping me think through that and we talk a lot about it but that's why it's a little abstract and I appreciate it can be hard to really grasp unless you think a lot about the way games work and the way networks work and things like that but I'm confident that we'll experiment in that area and there will be beautiful very interesting things that is the thing that excites me the most that's exciting so just to kind of ground that for a second in some concrete examples so dark Forest would be an example of giving it's almost like the primordial soup like you're just putting the ingredients to create worlds and let nature create nature that's right onto the blockchain and that's on chain and then something like loot would be like

the king throwing some seeds into the fertile ground and then letting like everyone else in the community take it extend it turn it into something that they want to I don't know if these are fitting analogies no that's exactly right and in Dark Forest the game they made is a very simple game but it had concrete and very legible rules and anybody wanted to extend on it could extend it and they can extend it and keep tweaking and playing with the game in that universe as long as they don't break the underlying physics the underlying nature they can do whatever they want it just has to adhere to Nature and think about how big that expressive space is yeah but that's one question I have for you guys is a quick sidebar but that actually really

confuses me because I've heard you guys talk about this when we've had many discussions early on about you know unchain gaming evolution of Unchained gaming what's possible what's not the thought that I'm always sitting there in those meetings in the back of my head thinking well why would you want to stick to the rules of nature when the whole point of being able to create these worlds is you can break these worlds like I have to ask that really quickly in terms of the physics because I've heard people talk about how you can break physics and games and why not well it's more nature and physics as a metaphor the way nature and physics works is there are Baseline rules that we can never violate like the conservation of matter and energy or you know all kinds of subatomic things right those those are rules we can't tweak in

one of these games you would make those rules and those would be like the nature but the nature could be whatever you want you know there could be no gravity that gravity could be crazy they could be you know the universe could be much simpler could be we live in a flat world where people can communicate faster than the speed of light but they still have to walk yeah you could make a funny thing so it's more nature and the Rules of Nature and physics as a metaphor you would determine what the physics are but it's important that there be some of those quote unquote physics or nature rules because otherwise I mean think about it if I could come in and change the rules so that all of a sudden everybody was my subject in this virtual world and that then was immutable then

nobody's going to want to play that game yeah exactly I might love it for a week and then everybody's gonna be gone and so no more fun you know exactly and that's exactly what it would be if let's say we forgot about blockchains we forgot about consensus and instead we had one the computer and we made everyone an admin on that computer oh yeah right what would it what would happen it would degrade into total chaos immediately as someone deletes like every other user and like changes everyone else's permissions basically one way of putting this is that the entropy of this system the maximum entropy of the system the maximum creativity the system is is very low it will collapse into someone just sees control and nothing fun as possible and

just from a Creator's point of view just logically basically any extra amount of friction where you're spending on coordination that you don't have to that's a cyclical kind of diminishing cycle is not worthwhile when you can actually be working on something that is much more generative and yeah exactly whereas if you have the blockchain to enforce the rules we can give everyone very well understood and very incredible creative expressive powers and then they have a lot to experiment with in that bounded space so it's exactly to Ariana's point is like you kind of need a very powerful force to ensure the rules as designer adhered to in the real world that's nature and in computers

that's consensus that's right the blockchain encoded thinking exactly and so to tie the threads first I'm convinced that you guys have now sold me on why not have the rules be you know changeable and breakable but they could be whatever rules within the thing that's really the point but two when you mentioned earlier Ariana that you think the idea would be to see Frameworks it's essentially like a scaffolding to set up the world where people can play and feel like they can create an experiment but also not so top down where it's controlled by a single person as you were saying earlier Eddie nor so bottom up that you literally have a thousand people doing admin taking over the world and just deciding to all become like the owners or whatever that would be Madness yeah that works really well so how do you think Loosely this will kind of play

out like based on kind of what you're seeing already I get that it's early days but I'm asking because I'm trying to understand how you think this will go mainstream how it'll start moving forward well to me one question is do the developers who are making on-chain games actually want to build games that can reach a mainstream audience yes that's a great question because all of the efforts I have seen so far have been super interesting but very narrow in their target audience because as you were saying earlier you do need to be fairly technical in order to play so it's very clear that that is the audience not just in terms of what you

need to know to be able to play but also what these games look like and the language of them like they're all really targeted towards a crypto native developer ecosystem which is great that's totally fine and they may end up being some of the most beloved games by just staying with that audience but I think the question is if we're talking about mainstream usage will that category of founder decide that they want to build something that can kind of bridge out of that or not either is mine but I think that question is going to define the future of the category it's also possible that the gap between the strong form fully Unchained games that

we see now and the quote unquote weaker form some web 3 component but not fully on chain games the gap between those two starts to diminish and as blockchains become more performant some of the limitations that are currently imposed become less of an issue I suspect it'll be both because now the rest of technology has always played out there's some place where the very Tech native kind of developer influencers will always go and then there's places where people are able to do things and us and then there's places where those worlds intersect but I think that'll never change but I do wonder how that's going to play out and Eddie do you have thoughts on that too it's a fantastic

question right now I totally agree with Ariana I see more deep enthusiasts making playful experiments for other deep enthusiasts which is super fun and I love to see it but that's the big question it makes a really really big difference and whether or not we end up going mainstream as a result of specific technological changes like scaling throughput and the cost of these systems and so on or ux improvements or whether it's the interests of the space it's hard to say but I can't wait to see you it is worth always noting that in every history of every technological Revolution there is a phase of the constraints phase where we live within these like very hard limits so yeah you know even in the procedural generation

post the whole point of them having to solve this problem has to do with storage constraints and so there's a lot of things that people have to do just based on the constraints and in the blockchain world we obviously live with many many kinds totally and let me say just to like address that head-on I already hear the naysayers Whispering or yelling at me that like there's no way you can make a fully Unchained game the computational limits are so low whatever I totally yeah yeah okay I don't want to be a goblin but look they're right of course you could not run valorant on ethereum that would be insane many many orders of magnitude away from that but there are simpler types of games and all kinds of interesting developments in scaling solutions that could allow us to

put incrementally more and more on chain one of my favorite projects mud mud dot Dev by the lattice team they have a framework for developing these types of games that offers more of the affordances that game developers might be used to and they're taking full advantage of composability not so much financialization and not so much consensus by deliberately leaning toward game developers run their own blockchain basically their own little else that will be able to check important parts of game state if the developers want onto L1 or L2 to preserve those things and to give them the sort of neutrality that makes consensus so powerful but that's

just something they're experimenting with by the way is this intentional I have to ask this because of course I have to ask a part question because of course I always freaking bring up a part thing everyone teases me about it but whatever is that intentionally a play on mud oh yeah it is okay because here's a fun story for you guys which you guys may not even know but one of the earliest muds was Lambda moo and it was at Xerox Park and it was a multi-user dungeon which is what mud stands for and it was like a way for people to collaborate but here's a fun fact that no one really knows that well it evolved over time into technology for creating more shared collaboration in the workplace and what started off as like a toy for programmers to play with each other later ended up becoming a

precursor to Microsoft's meeting technology because they sold that technology to Microsoft later to create telepresence essentially early version of Zoom so it's kind of a fun fact on how things start and go mainstream yeah right I love all that stuff yeah I mean part of what makes the game and conversation in the context of crypto so exciting is that gamers are always pushing the envelope because they're compelled to follow Delight right as a gamer I know this feeling you're just willing to jump over so many more hurdles and crash through more walls because because it's just so fascinating and that's kind of where crypto is and I just genuinely believe a lot of the

people who want to see these incredible multiplayer composable consensus autonomous worlds all these themes we're talking about those people will discover things that end up being critical not just for the rest of crypto but also for the ways we think about technology generally I'm totally sure of that well on that note actually going back to this question of constraints like the original question asked you guys was obviously about what you guys see is coming ahead and Ariana you mentioned this question which is whether the early developers really want it to be something more than for themselves for better or worse it doesn't matter no judgment and then Eddie you're pointing out that a lot of these constraints will be solved I think it's also worth noting that there's a phase in every Computing

cycle when you go from those constraints to the world of abundance a whole new set of Primitives can develop and things can happen and that includes Creator narrative things I mean I'm just thinking the game that I've been playing lately for a long time actually not just lately is Kentucky Route Zero and you literally could not play that game like 25 30 years ago because a game that has this weird surreal open-ended story could never have existed in that day because you would never have the abundance of those bits to waste on such a game whereas today you can and that's one of the things I absolutely love because it just you know it's just so crazy to think about like what you go from when you go from a world of constraints to abundance I radically agree when there's is abundance it's easier for the experimenters to explore

the resign space and for more experimenters to enter the space to Ariana's earlier point so okay quick pulse check then I'm gonna have you guys do this lightning round so Ariana you're I think the primary GP on gaming and you have your team like Cara and Elena and a bunch of people that work with you on this what have you seen that work so far and that doesn't like where do you see current traction this is meant to be a quick lightning round kind of pulse check well I'm excited to see more games live because right now we're still in a period where there have obviously been some meaningful game launches and a bunch of users coming into the web free space through those games but even just looking at our portfolio but I know this

would be true outside of it as well there is just so much that's going to launch in the next 18 to 24 months this sort of little-known secret I mean obviously it's well known to everybody in the games industry but not necessarily obvious from the outside about games is that they can take a really really really long time to be built it's not uncommon that's so funny because I was literally about to ask you like why are they taking so long to launch oh well you know there's just a lot that goes into a really well-made game and this is true in web 2 games as well so you know it's not uncommon to see games to take four or five even six years from start to finish so even if teams are cutting down those Cycles to

two to three years many of those teams raise capital in 2021 or early 22 and they just haven't launched yet so I'm personally very excited to see a wave of new launches coming because that's going to be really beneficial obviously for those teams but also just for bringing new energy and new enthusiasm for the space as a whole and then one more question for you along those lines though just how do you assess what's working versus not working when you're in the room like what do you look for how do you kind of know yeah I would say team is one of the primary components that we look to and within the category of on-chain and more broadly just web 3 games I could see very different types

of teams as we've described earlier there can be very crypto native Scrappy hacker type collectives that are building fully Unchained games which is a very different profile than you know a super seasoned Studio head or someone who has been producing major web 2 games for decades starting a web 3 game so depending on what they're trying to build we would be very excited to meet very different archetypes which I think is something that's very interesting and unique about this category I'm so glad you answered that is one of the questions I had in my mind for you was do you think that someone coming from web 2 to web 3 would be more

successful or someone who's crypto native going into something more gaming would be successful you kind of just answer that because you said the whole it really depends what they want to build I think having a super smart but very inexperienced developer wanting to build a massive AAA game that's going to be a really difficult thing to pull off not impossible but definitely a very uphill battle whereas if you have someone who has that experience who's done that many times and they're now moving into the web 3 space because they think it's a better model for games they're obviously going to need to bring in or hire or lean on us for crypto native web 3 experience but it's a slightly easier transition I would say

or at least that's my current working hypothesis but that single super smart Scrappy developer might build an incredible on-chain game just in a very different fashion yeah and this is also yet another way to get at the same question but do you guys think like design is going to win or technology is going to win or narrative is going to win when you think it is that's super tough I know that's a terrible question no it's a really tough one but I feel incredibly strongly that the ux is totally unacceptable still I mean I love it but then I think to myself like how are regular people going to get this it makes no sense it's impossible thankfully I think the crypto game developers web 3 game developers will benefit from a lot of the coming improvements in crypto ux and that's a top priority for the whole Space so I

think that that'll proliferate and they'll get to benefit but it's not just like the security and custody and wallet the system and you know identity you know all these key components of a streamlined experience it's also conceptually speaking trying to convey to people the distinction between what they're using you know like when people use a regular computer today they don't think really about its architecture or its internal component answer even much really about how the internet itself Works what has happened is that brilliant entrepreneurs and Builders have abstracted these things so people can remain concerned only about what they need to remain concerned about that work hasn't been done in crypto and

we're struggling to do it because there's so much to do but that needs to happen before someone can engage with an autonomous World in a meaningful way to even appreciate what that means and appreciate the powers and responsibilities of doing so yeah that's great it also makes me think there's always this debate about whether any open source Community can actually do design at all because you always need some kind of opinionated designer course at the top and it's funny because the argument is like it hasn't really worked so far in a great way like which is one of the reasons a lot of Open Source Solutions and alternative things don't work but I do wonder if in crypto some of these other things can kind of help bootstrap those shortcomings yeah I don't know that design by committee works yeah like yeah what you're saying

right is that I don't think that I've seen evidence that designing something as a group is a as a totally unstructured permissionless group not even just a group but the worst type of group where anybody can come and go with any motive right that seems like chaos there's basically no evidence that a enjoyable mainstreamable truly compelling game is authorable this way it hasn't just never happened and I find that exciting because we're going to learn I think what will end up happening is something in between where you will have individuals and small groups making incredible pieces that they can throw out there that other people will yeah kind of attach it to

independently the closest analogy I have is look at a huge complex open source ecosystem like look at python right and everything around python the programming language although there is the psf the python software Foundation they don't guide strictly how people add to and extend Python and they did not guide python toward the way it went sideways at one time into data science and data engineering and scientific Computing and like web stuff they didn't guide that process that process happened because everyone that was using python was able to just adapt it and modify it and extend it for their purposes and

that ecosystem is really chaotic a lot of the code obviously I don't mean this in a denigrating way just a lot of the code isn't good but some of the code is so good that it Powers entire Industries and entire companies and is critical infrastructure that weird messiness and that distribution where these random amazing hits combined together to make incredible things and there's kind of a long tale of Flora and Fauna so to speak like that's what open source and an open permissionless system looks like it has that long tail property and we're not used to seeing that in games the closest we have to that is if you go to steam and you pick a popular game and go to

the workshop page where all the mods are you just scroll down scroll down scroll down the top 10 most popular mods for any game are incredible it's rare that I don't feel compelled to add a mod to a game when there's a rich enough Community there's always something that's just a no-brainer but if you go all the way down to the bottom of the tail there's always kind of random stuff that doesn't make sense and that should never detract from how you perceive the totality of the mod Community it's an incredible thing it just has this property that we need to take for granted and we don't have that in games as games yet we have that in mods or ugc or little parts of games we don't have that in whole games and we will see that

in whole games and that's weird but culture will have to accommodate that's super interesting well I'll just put a plug for crypto on that too though because that's again where a couple of things one currently we're in a system where you have one person designing design in crypto we can have multiple a Marketplace of designs and front ends that can like play out and win it's actually a truer Marketplace and more open than any other system in that sense two you can also reward again different stakeholders for different contributions in a way that you can't do in current open source in a very clean and usable and easy way so that's another form of evolution there but yeah no I'm bought into that for sure and my last lightning round question is what are you excited about for this year ahead in unchain

gaming like is there something specifically fun or interesting that you've seen that you've caught your eye that you're excited about Ariana you mentioned that you are excited to see things launched so that's great but what else might you say on that so I'm personally excited to see a lot less friction in user onboarding flows because I know that has been a real pain point for new users wanting desperately to start interacting with crypto games buying nfts having a wallet and being able to play but there's just so many steps and a lot of users Trail off at each of those steps so we're starting to see it said just launched a new version of their onboarding where literally in

three clicks you can be in a horse race and that to me is really what we need to see a lot more of obviously you know not every game is going to have the same onboarding flow but just this idea of being able to reduce the number of steps that people have to take to go from you know non-user to user is something that I'm very excited about that's fantastic I completely agree with that badly badly needed something that I'm interested in seeing is how all these interests sorry I don't know why like the last sentence go Goblin mode one thing I'm interested in seeing is

we gotta keep that in I'm very interested go ahead I can't wait to see what all these incredible teams are doing with regard to gaming platforms gaming development platforms because everyone rightly recognizes that like developing games is hard developing games using crypto like systems like smart contract style programming and so on is even more difficult it has tons of challenges even if you run your own little Network and you don't have to worry about the constrictions of consensus on L1 it's very very hard solidity and smart contracts we're not really developed for game design for game development sui has some really interesting stuff coming out

regarding game development Suey is in the blockchain that's from mistin Labs with a programming language move we talked about in the previous episode exactly mud is another one I called out there's just a ton of efforts to solve this to make game development on chain really really smooth and interesting and we'll see we'll see if any of those development patterns stick one thing we didn't address I just realized this and you Ariana and Eddie were actually the authors on this post we didn't really address how metaverse comes in and doesn't come into this like I know there's a common you know an intersection with thinking about economies and gaming and also for the listeners we did do a wonderful Deep dive with Herman narula one of our Founders and also the author of the book

virtual Society in a past episode so please listen to that if you want to hear more discussion of that but I kind of want you guys to quickly answer where metaverse does and doesn't come in when it comes to this world of crypto enabled gaming overall B I also want to understand the distinction between an autonomous world and a metaverse and what really is an autonomous this world or is that just another name for something else so if you guys could answer that really quickly yeah with that post we just tried to distill down some of the elements that would be probably necessary conditions for something to be considered a metaverse because we were seeing the term metaverse used to describe basically everything in some ways but also used in a very limiting way because it almost

always at least the stock image included with every article about the metaverse is you know an Oculus headset or something like that and I don't necessarily think that that's a requirement or prerequisite for something to be considered a metaverse so it's possible that eventually some on-chain game worlds become full metaverses but I don't think we've seen that yet or at least not metaverses in the strong form version to use that framework again just because they have been you know I think early experiments and not necessarily fully built out to the extent that I would consider again a full metaverse obviously what a full

metaverse is can be very much Up For Debate so TBD but I think for the time being at least from my perspective we haven't really realized that yeah let me also say that there is some contention yes I hear you Neil about whether or not there is the metaverse or a metaverse I recognize completely why he sees this Neil Stevenson right sees this as an important shibboleth of whether you get it right the metaverse a metaverse i politely disagree because I see it as like talking about the internet is there the internet or a internet we can talk about what makes an internet that while recognizing that they're all kind of intertwined in one object and still call

it the so that's like a holy war in metaverse dialectic World apparently but where does that where does it connect with autonomous worlds and so on yeah well and before you get to autonomous world where does he even connect with just crypto basically in my mind the core idea is that when you are using the internet or an internet or whatever when you're using the internet whose Turf are you on that is the question if you are using it on someone else's Turf all the time and all the key components for you like those ingredients the property rights the identity the ability to compose things are all tightly constrained by the controller of that system you're just using their computer that's

not a metaverse a metaverse is where the system those key components those are rights and powers that make the real world economically and creatively and socially so powerful when those rules transcend the tolerances and permission givings of the person who controls the system so if you had a system that was able to enforce those rules on its own neutrally and give you a concept of identity that you truly control or give you property rights that you truly control or allow you to compose and remix and recombine things in a way you control then your power and your freedom and your

capabilities are much much much larger and they start to approach the powers and capabilities you have in the real world that's what makes it a metaverse I have to push you guys on this one more though because as a listener I find that not a satisfying an answer like it's great it's crypto-centric but I also feel like as a user I don't really care like what benefit does it give me as a user Beyond ownership and control and freedom yeah well to put a finer point on it the ownership and the control those are things that end users benefit from but may not appreciate directly kind of like decentralization I see decentralization as a developer feature a builder feature the people who use these systems they benefit only indirectly exactly like if you go to some regular person in the

screen like isn't it great how decentralized email is like no I can't finish it I send a message okay that's it I can't spam in my inbox whatever like that doesn't matter but people absolutely do benefit from the decentralization of for example the DNS system yeah the fact that you can go claim a domain any entrepreneur can come along and they don't have to ask anyone they can just start up a service they can start up a website and websites exist independent of any specific tech company that's why despite being a clunkier experience the browser and websites are so amazing and always the first source of innovation so people get to benefit Downstream from the openness and decentralization of these systems so

why do you care why do you get to benefit like why do you care whether it's a metaverse and open system or a closed virtual world because the virtual world is going to be rent collected and neutered and highly highly constrained it's going to be less Innovative and less Dynamic and less creative if you're a content creator or something like that you're going to have fewer options on how to construct your business and so on and so forth right like it's really a property for the people who want to directly use and build on these systems but at the end of the day a user will be able to tell the difference you will want the open system not the closed system I find that answer far more status thank you and how you connect all

that back to Unchained gaming is there a connection now more specifically with metaverse on chain gaming and this quote phrase autonomous worlds which I believe was coined like you said I think Eddie by Justin gliber can you guys tell me more about that because I love the phrase frankly I'm a big believer I love anything happening to the World building and World building but like what does that mean I haven't talked to him about it specifically so I wouldn't want to misrepresent his POV on that yeah so speaking my own interpretation I also don't want to speak for Justin and he does this very well himself and there's videos of him talking about similar subjects online it's taking this exact idea that I unpacked about the metaverse and then add that to a specific game right now when you play a game you and believe me

obviously I love games you get to enjoy the world that that game maker made for you but if we were able to make that game World autonomous and independent and open and manipulable by anybody who wants to come along and modify it according to its rules then you open it up for experimentation and Innovation and incredible people to build new amazing things on top of it in the same way you'd think about any other network that's the fundamental idea it's a way to turn a game into almost like a platform almost a network yeah for other people that's what's beautiful about it I think if I were to bring It full circle just based on this entire

conversation I think what I'm interpreting from it and this kind of feels like a good way to distill down what we've talked about so far the idea until now is that worlds were made by gods by Kings by single publishers this idea now that you can literally have a world just simply running on its own by itself without having to ask for permission from anybody to do whatever it needs to do but to your earlier Point still have some basic rules but it follows just like any other natural world is I think the greatest way to distill it and kind of the whole Arc of this conversation I radically agree and I'm sorry if like I have like this like crazy idea and I feel like I'm borderline unhinged every time I talk about this you are an end you're Goblin do not apologize not at all fantastic

thank you so much you guys for joining this episode of web3 with a6nc awesome thank you sonal thank you it's great to be here thank you for listening to web3 with A6 and Z you can find show notes with links to resources books or papers discussed transcripts and more at asicsncccrypto.com this episode was produced and edited by sonal choxi that's me the episode was technically edited by our audio editor Justin golden credit also to moonshot design for the art and all thanks to support from Asics and Z crypto to follow more of our work and get updates resources from us and from others be sure to subscribe to our web 3 Weekly Newsletter you can find it

on our website at asicsnzcrypto.com thank you for listening and for subscribing let's go [Music]