In the early 2000s the dot-com boom swept the world. At the time companies received millions in investments: all it took was to launch a website. The value of dot-com stocks rose, but their services did not interest consumers. As a result the bubble burst, and investors lost $5 trillion.
In 2020, hundreds of DeFi projects emerged on the crypto market, and this recalls the dot-com bubble of the early 2000s. The decentralised finance sector is growing rapidly, but projects lose value due to speculation and a lack of real users.
Blockchain developer Dapper Labs believes that blockchain must be made convenient and useful for ordinary users. Otherwise cryptocurrency will continue to live from dump to pump.
Dapper Labs — creator of decentralised games CryptoKitties and Cheese Wizards, as well as the cryptocurrency wallet Dapper Wallet. The project outlines a promising area of blockchain development — decentralised games — and explains how they help mass adoption of blockchain.
Why blockchain projects have few users
Developers of decentralised projects target investors and traders. They create stablecoins, decentralised exchanges and platforms for lending via smart contracts. Even popular DeFi services were used by about 8,000 people per day in June 2020.
Three reasons underlie the low take-up of blockchain projects:
- It is hard for users to understand cryptocurrencies. They find it easier to pay with a bank card in an app than to buy coins on an exchange or through a swap;
- Most DApps run on a slow blockchain. Ethereum’s throughput is 15 transactions per second. At times of peak load users face a choice: wait for the transaction to be confirmed for several hours or pay up to up to $15 in fees;
- Projects do not solve the needs of the average user. The Forex market is traded by 9.8 million traders, while Instagram has 1 billion users. Users want entertainment, yet blockchain projects offer only investments.
In Dapper Labs they believe high-quality blockchain games will be the next step toward mass adoption of cryptocurrencies.
“During the development of CryptoKitties we set ourselves the task of proving that the use of cryptocurrency is not limited to investments and trading. In the end, we managed to engage users who had not previously dealt with cryptocurrency,” says Roham Gharegozlou, CEO of Dapper Labs.
But for genuine mass adoption, blockchain games must be more user-friendly.
How to simplify blockchain games: the Dapper Labs case
Dapper Labs’ most successful game is CryptoKitties. In it, users breed, trade and collect cats — unique tokens (NFTs) on the Ethereum blockchain.
Dapper Labs launched CryptoKitties in November 2017. A week after launch the game became the most popular application on the Ethereum network.
“We noticed that many users bought cryptocurrency for CryptoKitties for the first time. The game became a sandbox where people could learn about cryptocurrency without much risk,” notes Roham Gharegozlou, CEO of Dapper Labs.
Despite CryptoKitties’ popularity, mass adoption did not arrive. Users often declined to play because of difficulties buying cryptocurrency.
“There were days with as many as a million visitors to CryptoKitties. Of them, fewer than 1% played. Beginners found wallets and how Ethereum works challenging,” comments Dieter Shirley, Chief Technology Officer at Dapper Labs.
To solve onboarding, Dapper Labs developed the cryptocurrency wallet Dapper Wallet. It is a Google Chrome extension that lets you buy cryptocurrency with a bank card and automatically calculates the size of fees.
Dapper Labs integrated the wallet into the new game NBA Top Shot. It’s similar to CryptoKitties: players collect NBA Moments — tokens of the best moments in world basketball. Players assemble teams of basketball players and creators of these moments, and compete with other users.
“NBA Moments can be paid for with cryptocurrency or a bank card. In the second case, the game will automatically create a wallet and send NFT tokens to it. A player may not even realise the game runs on the blockchain,” explains Dieter Shirley, CTO of Dapper Labs.
To create the game, Dapper Labs signed partnerships with the National Basketball Association. In addition to this, Dapper Labs will collaborate with the UFC, Dr. Seuss and Warner Music Group.
The developers are confident that the use of popular tunes, famous athletes and beloved children’s characters will broaden the audience for blockchain games.
Why Dapper Labs is building a new blockchain
In December 2017 CryptoKitties accounted for 12% of Ethereum’s transactions. The game’s daily audience stood at 18,000 users, and the average number of transactions was eight per player.
What would happen if you ran online chess on the Ethereum blockchain? During a game, players exchange transactions every 30 seconds. On a day with 1,000 players, you’d see 1.44 million transactions. That would be 90,000 more than the total transactions by users, smart contracts and DApps during Ethereum’s largest historically observed load.
For fast-paced games you need a faster blockchain. For example, in NBA Top Shot players will manage basketball teams and tap the screen aggressively. For such games Dapper Labs is developing a high-throughput blockchain Flow.
Flow’s high throughput is the result of Dapper Labs’ innovations:
- Pipelined architecture. Flow employs four types of nodes that handle collecting, validating transactions and forming blocks;
- Consensus algorithm SPoCK (Specialized Proof of Confidential Knowledge). Nodes prove they have the correct copy of the blockchain and confirm blocks in fractions of a second;
- Use of server-grade hardware. Full Flow nodes run on server hardware and process parallel data streams faster than ordinary computers.
Since 22 September, native Flow (FLOW) tokens have been trading on the Coins List platform.
The blockchain is in closed beta, but test smart contracts for Flow can already be created in the Flow Playground tool.
Conclusions
Blockhain games boast billions of potential users. According to Newzoo, a third of the planet’s population — 2.5 billion people — play console, PC, browser and mobile games. The number of cryptocurrency traders and investors is 50 times smaller — 52 million.
Blockchain games could spark a fresh wave of interest in the crypto industry and accelerate mass adoption. But this will require fast and intuitive products.
With the Dapper Wallet and Flow blockchain, decentralised games could approach the quality and ease of centralised equivalents. New users won’t have to worry about gas fees, and old hands won’t be stuck playing dull games.
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