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What is Web3 Gaming – A Comprehensive Guide

What is Web3 Gaming - A Comprehensive Guide

Web3 gaming represents a radical shift from the traditional gaming model by utilizing blockchain technology to create decentralized, player-driven ecosystems. At its core, Web3 gaming introduces the idea of true ownership, where players fully control in-game assets such as characters, items, or virtual land, often in the form of NFTs (Non-Fungible Tokens). This level of ownership contrasts with traditional games where players typically lease or rent digital assets within the game world. By placing assets on the blockchain, players can trade, sell, or even lend them to others, creating real-world economic value from their time spent in games.

To learn more about what NFTs are and how they work check out the full article on Metaschool here.

Web3 Recap

Before diving into the world of Web3 Gaming, you should have a good understanding of how Web3 works. Let’s quickly go through the core features of Web3 so you can appreciate what it brings to an already huge and booming gaming industry.

What is Web3?

Web3, often referred to as Web 3.0, is the up and coming evolutionary phase of the internet, built on blockchain technology and decentralized networks. Unlike the current web (Web2), which is largely controlled by corporations and intermediaries, Web3 aims to give users direct ownership and control over their data, digital assets, and online interactions. The core idea is to create a decentralized, token-based economy where individuals have autonomy, without relying on third parties like governments or big tech companies to mediate transactions or regulate content.

What is GameFi?

GameFi is the meshing together of gaming and blockchain-powered financialization. Blockchain-based games that allow their players to receive real world, tradable financial benefits come under the banner of GameFi. It allows players access to secure ownership, privacy and eliminates the need for a central authority.

Beginning of GameFi Projects (aka Web3 Games)

Web3 gaming’s origins can be linked to the rise of blockchain technology, with Ethereum playing a pivotal role in the early 2010s. A breakthrough in this space came in 2017 with the launch of CryptoKitties on the Ethereum blockchain.

Cryptokitties is a blockchain-based game where players can buy, breed, and trade unique digital cats. Each cat is represented as an NFT on the blockchain, showcasing how in-game assets could have real-world value. This project helped demonstrate the potential of blockchain in gaming, sparking broader interest in Web3, especially Web3 gaming.

As blockchain technology matured, more games embraced it, contributing to the growth of the Web3 gaming ecosystem with each game bringing its own special features. We will look at some more popular examples later on.

Key Features of Web3 Gaming

Web3-based games have some fundamental features that set them apart from traditional games.

1. Decentralized Ownership and Control

The decentralized nature of Web3-based games gives players control over their digital assets. In traditional gaming, items or characters players acquire remain under the control of the game developers, meaning that they can be revoked or altered at any time. Web3 gaming, however, leverages blockchain technology to allow full ownership of in-game assets. Players can transfer these items between games or sell them for cryptocurrency or fiat currency, giving them autonomy over their virtual goods. For instance, in games like Axie Infinity, players own creatures called Axies, which they can sell or trade in a marketplace.

2. Transparency

Transparency in Web3 is achieved through the use of blockchain technology. Every transaction, in-game purchase, and asset transfer is recorded on a public ledger, making all data accessible and immutable. This creates an open environment where players can verify game mechanics, asset ownership, and marketplace transactions without relying on centralized authorities. Removing the need for trust in third parties reduces the risk of manipulation, fraud, and hidden agendas.

3. Security

Web3 gaming also benefits from enhanced security due to blockchain’s decentralized nature. Traditional games often have single points of failure, such as centralized servers vulnerable to hacks or outages. In contrast, Web3 games operate on decentralized networks, distributing data across multiple nodes. This makes them more resilient to cyberattacks, as no single server controls the game’s infrastructure. Another safeguard is the use of cryptographic techniques which make sure that all the transactions are secure and tamper-proof — thus safeguarding player data and assets.

4. Interoperability Between Games

Interoperability allows players to use their assets across multiple games and platforms. This is a major step forward from traditional gaming, where assets are locked within a specific game environment. Blockchain technology facilitates the transfer of items, currency, and rewards between different games, which significantly enhances the value of the assets players own. This cross-game portability can create new layers of interaction and monetization as players can trade items between game worlds.

Types of Web3 Games

Web3 games are broadly categorized into two main types: play-to-earn and walk-to-earn. These categories are created based on the player’s experiences. Let’s learn about them.

1. Play-to-Earn (P2E)

As the name suggests, play-to-earn games allow players to earn rewards such as NFTs or cryptocurrencies by participating in gameplay. The more you play and complete tasks or challenges, the more digital assets you accumulate. These assets can either be used to unlock further in-game rewards or sold on digital marketplaces, offering real-world value. Unlike traditional games, P2E games operate on decentralized networks, meaning players have ownership over their in-game assets and contribute to the game’s economy alongside developers.

2. Walk-to-Earn (W2E)

Walk-to-earn games introduce a novel concept: instead of earning rewards through gameplay, players earn by walking or engaging in physical activities. W2E games reward users with digital assets for movements like walking, jogging, or running. For instance, the game STEPN (the first lifestyle app of its kind) rewards players with tokens for doing different types of workouts. These tokens can be used for in-app purchases or traded on exchanges.

However, in both categories, some games initially require the player to make a crypto investment, just to get started.

Real-World Applications of Web3 Gaming

In this game, players control a hamster CEO who runs a virtual crypto exchange, engaging in daily challenges and battles. Players can trade or sell these assets, and the game introduces a competitive edge by allowing players to participate in tournaments and earn rewards.

web3 gaming - hamster kombat

The game is designed to provide entertainment and financial incentives through in-game tokens, airdrops, and special events. With its unique blend of fun and blockchain technology, Hamster Kombat demonstrates the potential of Web3 gaming to provide both entertainment and financial incentives.

To learn more about Hamster Kombat and how it works check out the full article on Metaschool here.

Top Web3 Games

Here are five of the top Web3 games that are making waves in 2024:

  1. Aurory, built on the Solana blockchain, is a tactical Japanese role-playing game that follows a play-to-earn model. Players can compete in both player-vs-player (PvP) and player-vs-environment (PvE) modes, earning AURY tokens for victories. The game’s economy revolves around NFT-based assets that can be traded in secondary markets.
  2. Sorare, built on the Ethereum blockchain, allows users to own their favorite athletes in the form of NFTs. Players can compete in fantasy leagues and tournaments to win ETH and rare cards. The cards are unique, scarce, and tradable, providing value beyond the in-game competition.
  3. Gods Unchained, built on the Ethereum blockchain, is collectible card game which gives the players ownership of their deck of cards through NFTs that can free traded or sold. Players compete in strategic battles, where the strongest and most well-composed decks prevail. Unlike traditional card games, Gods Unchained’s decentralized nature allows players to truly own their in-game assets, adding real-world value to their collections.
  4. Decentraland, built on the Ethereum blockchain, provides a platform where users can buy, develop, and monetize virtual real estate as NFTs. Users can participate in various activities, including social events, virtual businesses, and experiences that they create or join. Players have complete control over their virtual assets, contributing to a growing metaverse economy.
  5. Illuvium, built on the Ethereum blockchain, combines elements of adventure and RPG gameplay, where players can explore vast landscapes and capture Illuvials, creatures with unique traits and abilities. These Illuvials can be trained and used in battles, with ownership secured via NFTs.

These games illustrate the diversity of Web3 gaming, blending traditional gameplay with blockchain-based ownership and decentralized economies in a really interesting and engaging way. What sets them apart is the fact that your progress in the game translates to real-world value—you truly own your in-game assets and can benefit from them in tangible ways, such as trading or selling them on open marketplaces. This adds a new layer of engagement and rewards to the gaming experience, making it not only immersive but also financially empowering. Isn’t that awesome?

The Role of Smart Contracts and NFTs in Web3 Gaming

Web3 gaming relies heavily on smart contracts to ensure secure and transparent operations. Smart contracts are self-executing agreements coded into the blockchain that automatically enforce the rules of the game, such as distributing rewards or managing in-game economies. For example, smart contracts can control how in-game assets are distributed or how votes on game changes are tallied.

NFTs, on the other hand, introduce the concept of provable scarcity in games. Each NFT is unique and cannot be replicated, ensuring that rare items or characters retain their value. This scarcity prevents developers from flooding the market with new items, thus preserving the value of existing assets.

Challenges and Future Outlook

Despite the promising potential of Web3 gaming, there are challenges that must be addressed for widespread adoption. The technology is still in its early stages, with issues related to scalability, user experience, and accessibility posing barriers. Additionally, the complexity of blockchain technology might deter non-technical gamers from embracing Web3 games.

However, as blockchain infrastructure improves and more developers experiment with decentralized gaming ecosystems, Web3 gaming is likely to see significant growth. The ability to create player-owned economies, combined with the advent of the metaverse, points to a future where gaming is no longer just entertainment but a full-fledged economic opportunity for players and developers alike.

FAQs

What is Web3 gaming?

Web3 gaming refers to the integration of blockchain technology into video games. This allows the players to own, trade, and sell in-game assets as NFTs. Unlike traditional gaming, Web3 games provide decentralized ownership, meaning players have full control over their digital items, which exist outside of the game’s ecosystem. This gives gamers the ability to monetize their progress and assets in real-world marketplaces.

How do I benefit from playing Web3 games?

In Web3 games, players not only enjoy immersive gameplay but also gain real-world value from their progress. Assets like characters, skins, and in-game currency are represented by NFTs or tokens, which can be traded or sold. These assets are fully owned by players, giving them the flexibility to monetize their gaming achievements and even earn income through games with a play-to-earn model.

What makes Web3 games different from traditional games?

In traditional games, all in-game assets and progression are controlled by the game developer, and players cannot trade or sell items for real-world value. However, in Web3 games the players have true ownership of their digital assets and can benefit financially from their in-game activities and assets which have value in the real world.