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Over the past decade, the blockchain has crossed several innovation cycles, going from a singular cryptocurrency to a multi-chaînes system that includes billions of dollars in total value. Among the many industry integrations blockchain has seen, with everything from finance to cybersecurity, blocking apps, one industry has continuously shined. Gamefi, the balance between blockchain and game, allowed game developers to create a brand new game system, offering players the opportunity to generate money while they play.
While the GameFi industry has reached a total valuation of almost 3 billion in just six years, AAA games failed to use this new technology. The vast majority of blockchain games have been developed by new companies that focus entirely on Play2Earn games.
This trend is certainly not due to a lack of opportunities from AAA games. Fifa Ultimate Team review, which offers users the opportunity to purchase kits, stadiums, players and other assets to enhance their gameplay. This Open Packs Purchase Market System in EA, and then open them to reveal digital assets, it is remarkably like many Play2arn NFT systems, with a high potential for the integration of the blockchain.
In fact, EA generated USD 1.62 billion of this system in 2021, leading us to the question of why exactly AAA developers aren’t making the jump to blockchain technology and capitalizing more. In this article, we’ll look at some of the major limitations of Layer 1 blockchain, demonstrating why this prevents AAA from taking full advantage of this system.
We will then turn to layer 2 systems, demonstrating exactly how this new wave of blockchain technology could be configured to revolutionize the world of blockchain game and bring AAA titles to the mixture.
Let’s cut to the chase.
What Limits Does Blockchain Layer 1 Technology Pose For Games?
The blockchain gaming world has come a long way in recent years, with flagship titles like Axie Infinity or The Sandbox generating millions of dollars in a single 24-hour trading period. While the blockchain system currently supports these titles, the scale of AAA games is almost unmatchable.
While The Sandbox, one of the leading blockchain titles, boasts an impressive 2 million total players registrations, Fifa 21 attracted more than 25 million individual players, demonstrating the big difference that AAA games attract compared to blockchain titles. With this much larger player base, there is a much greater demand that blockchain systems simply cannot handle.
There are three main limitations with regard to blockchain technology, with the number of players and the need for rapid and stable transactions on which AAA is simply impossible on the first layer. The main issues preventing the translation of AAA games to the blockchain are:
- Transactions per second
- gas costs
- Lean on side chains
Let’s break them down further.
Transactions per second on Ethereum
Ethereum is the main playground for developers when it comes to building blockchain gaming systems. With a broad developer toolkit and a flexible Mainchain, Ethereum is the leading blockchain system for development. Although Ethereum has many advantages, its transaction capacity per second is notoriously low.
In its current state, Ethereum can offer around an average of 15 transactions per second. Blockchain works by creating individual blocks of information, filled with transaction history. When a block is processed, it becomes permanent, being recorded in the blockchain and documented. As it can only happen about 15 times per second, each block having a limited space to contain information, Ethereum has a problem with the transactions saved in a long queue while waiting to be treated.
While there are ways to circumvent this wait time, by paying a gas fee – which we’ll discuss shortly – it’s just not possible for AAA games, as millions of gamers all need to process the data at the same time.
With the low transaction rate per second offered by Ethereum, users will pay what is known as gas fees to push their transaction to the top of the queue. Paying this fee ensures that transaction data is pushed to the front of the queue and then recorded on the blockchain. For any type of in-game asset, users want to be sure that an item they received in-game won’t suddenly disappear. Once registered on the blockchain, it ensures that no changes can happen to lose this asset.
Even with its extremely low transaction fees, Ethereum has a huge user base, being the leading blockchain in terms of decentralized application development. However, due to its success, the average gas price to jump the transaction queue has reached ridiculous levels, currently surrounding around the USD 15.50 for a single transaction.
Although this figure seems high, it is down compared to about USD 60 just a year ago, demonstrating how bad transaction fees can be. If we then return to Fifa Ultimate Team, each pack opening being a separate transaction, there is no way that individuals pay for the pack, then pay 15 USD just so that the blockchain recognizes that they have it, In fact, open and received digital assets inside.
For this reason alone, the distribution of AAA securities at scale is currently impossible in blockchain systems like Ethereum.
Lean on side chains
One way that many blockchain developer teams have relied on to overcome the slow transaction speeds and high gas fees associated with working on Ethereum is to turn to sidechains. Sidechains are separate blockchain projects that use interoperability (bridges) to connect to the mainchain – in this case, Ethereum.
Forging this sidechain link allows the mainchain to use the features of the first, Ethereum using sidechains like Ronin will boost transactions per second. Ronin offered a 560% increase in TPS for Ethereum, largely solving the gas fee issue for many blockchain game developers. However, the main issue with using a sidechain is that it is a completely different blockchain developer, which leaves the sidechain open to security risks.
Another leading blockchain game, Axie Infinity used Ronin as a bridge for their Play2Earn system. While things were fine, with axie bringing together a huge community around the project, things worse in March 2022. Towards the end of the month, the pirates used a feat within the Ronin Network will steal over $625 million.
Even with various security features in place, like nine different validators and five required signatures, Ronin’s network was corrupted and exploited by the hacker. Events like these reveal just how fragile sidechains can be, with Axie Infinity experiencing a major slowdown due to the Ronin Network exploit.
For AAA games that process billions of dollars in transactions each year, they simply cannot risk an exploit or cybersecurity risk due to the amount of capital they deal with. With that in mind, the only viable solution to translation and gas fees was removed, shutting down blockchain development for AAA titles.
How does Layer 2 solve these problems in the Blockchain game?
Although side chains are not an answer feasible to the problem of scalability in the blockchain, Ethereum recently announced Ethereum 2.0, which aims to increase the efficiency and speed of this network. One way to achieve this is to introduce layer 2 systems into Ethereum, which are further deployment layers of the same blockchain, providing similar benefits as sidechains without the security risk of development. separate chains.
One of the major Layer 2 ecosystems that is getting media attention is bobawhich offers Ethereum a range of possible advantages:
- Improve transaction speed – With L2 systems like Boba, Ethereum is capable of accelerating the total number of transactions it can manage in a given second. With this approach, the backed up queue of transactions can be processed at a much higher speed. Over time, this will help drastically reduce the gas fees needed to work with Ethereum. Once at a very low and stable level, AAA games could migrate to the blockchain, with fees of up to 60x lower than currently offered making it a viable option for traditional developers.
- Ensure the security – While sidechain systems like Ronin use their own security defenses to keep funds safe, an L2 ecosystem uses the same structures as Ethereum itself. So, instead of worrying about security, every connected app is able to secure itself with the blockchain’s most advanced cybersecurity defenses, with Ethereum’s impressive level of defense being strong enough for even a AAA title played at worldwide.
- Provide stability – By extending the capabilities of smart contracts on Ethereum, Boba provides a more comprehensive system, allowing developers to build and fail games quickly. With transaction speed and expansion at its core, the extra stability L2 provides Ethereum makes it a prime candidate for game development – even at a AAA standard.
From drastically improving Ethereum’s transaction speed to providing a secure cybersecurity standard from Ethereum itself, the introduction of L2 ecosystems could solve the scalability issues that the blockchain is facing.
Currently, the blockchain offers a complete system that many game developers can use to create expansive and well-designed P2E titles. However, with the scale of AAA games, the blockchain scalability issue is preventing transition to blockchain for traditional developers.
However, as scaling solutions such as L2s become more prevalent, blockchains will become faster, more secure, and more stable, negating issues preventing AAA movement to blockchain. As Boba and other L2 ecosystems continue to innovate what is possible with Ethereum, the ability to move to blockchain will become a working reality for AAA game developers.
With these changes and developments already on the horizon, the next 5 years will be an exciting time for blockchain gaming.