On December 18, 2021, at the 8th Old Friends Reunion Scaling Summit, we are pleased to have invited Dieter Shirley, CTO@Dapper Labs; Robbie Ferguson, Co-founder@Immutable X; Jiho, Co-founder @Axie Infinity; Andrew Gross, Tech Product Marketing@xDai/Gnosis and Daren Frankel, Head of Strategy & Op @Palm NFT Studio; moderating by Jesse Johnson, Co-founder @Aavegotchi to give us a thoughtful panel discussion!
Overview:
This panel discussed the current situation and future development of NFT and GameFi. Andrew said that in addition to conglomerates, government agencies have also started to use blockchain technology; Dieter predicts that there will be more innovations in the NFT space in 2022. Daren believes that NFTs have changed the lives of many people and have given a platform for creators and artists to showcase and distribute their work efficiently. Jiho believes that besides Axie, more game teams will emerge and become unicorns in the industry.
Some thought-provoking ideas to go through：
🎤 Development that surprised you in 2021
🎤 What is one project, trend, or feature you’re very excited about but feel isn’t as widely understood as it should be？
🎤 What potential headwinds do you think need the most attention paid as we move forward?
🎤 Supercycle?
🎤 How to make sure the metaverse contributes to advancing humanity in a positive direction?
🎤 How do you view the growth of game-native sidechains like Ronin vs. app-specific sidechains like Flow and Palm? At what point do you think game developers should switch from a general-purpose L1 to an app-specific chain or start building their own native chains?
We’ve captured the full learnings and takeaways from their words below:
🎤 Moderator — Jesse Johnson (Aavegotchi)
I’d like to welcome everybody here to the old Friends reunion, the 8th annual, and I think this panel is going to be very fruitful in covering everything that has to do with the Metaverse gaming and where crypto is going in general. So it’s going to have a lot of insights in the next 30 to 45 minutes. I’m your host, Jesse, from Pixelcraft Studios. We’ve been building out the blockchain game known as the Gotchiverse, which is a virtual world for Aavegotchi, and I’m super stoked to be here with everybody else on this talented panel and learn about how interoperability can bring us all together. So with that, maybe I can get an introduction from each of you and we can start alphabetically by first name with Mr. Andrew Gross.
Andrew Gross (xDAI/Gnosis)
Hey, everybody. I’m Andrew. I’m a technical writer with the xDai chain, which is soon to be known as the Gnosis Chain. We’re recen]tly undergoing a merger at the moment, so it’s more of a token merge, but we’ve got some exciting things coming. For anyone unfamiliar with xDai, we’re a scaling solution for Ethereum, using a stable transaction or stable tokens for transactions. Some interesting things we have going with NFTs. You guys probably know POAP. They use xDai for minting, and the Dark Forest is a game on xDai that’s gotten a lot of attention recently. So a few things we have going on in those.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s wonderful. Yeah. I hear nothing but good things about Dark Forest, even though it sounds pretty spooky. So that’s awesome. Can’t wait to learn. Thanks for being with us. xDai doing big things. Let’s see if we’re going to alphabetically. Let’s hear from Darren Frankel.
Daren Frankel (Palm)
Awesome, thanks, Jesse. Hey, everyone. Super excited to be here. So my name’s Darren Frankel. I run strategy and operations for Palm NFT Studio. Palm NFT studio is a couple of things. One, we are a creative studio that partners with large established consumer content brands in the arts and entertainment industry. So think movie studios and game studios, things contemporary artists. We’ve done a number of projects with contemporary artist Damien Hirst, Warner Brothers Studios and a few others. DC Comics was one of our most recent. And we also operate technology infrastructure to support other players in building up their own NFT experiences. In addition to those entertainment and tool businesses, we were also one of the founding members of the Palm Network. The network is an Ethereum sidechain specifically for NFTs that we launched specifically to support high-end consumer content NFTs. There’re also some challenges faced with main Ethereum today dealing with sustainability issues and scalability. Thanks for having me.
Dieter Shirley (Dapper Labs)
Hi there. How are you doing? So glad to be here. Really cool to be on this panel with everyone. I’m Dieter Shirley. I’m CTO of Dapper Labs. Dapper Labs is best known for NBA Top Shot, although we’re testing NFL all day today. So the first few beta testers are getting in. We also expect to have UFC on LaLiga out pretty soon. Of course, before that, I was one of the co-creators of CryptoKitties and the author of ERC 721, which I imagine most folks have heard of and I’m the chief architect of the Flow Blockchain. Flow is a blockchain that was kicked off by Dapper Labs. It’s a standalone L1 that was designed for general purpose applications. So it has a great NFT support because that’s obviously something really near and dear to our heart. But it also has a great smart contract programming language called Cadence, which we built out of our own frustration. Having built some of the most used smart contracts on Ethereum and just finding the limits of that programming model. And Cadence uses something called resource-oriented programming, which we think is just such a much better way of reasoning about smart contract logic. And one of the best development environments for smart contracts in our opinion.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s awesome. Can’t wait to hear more about what’s coming up. Mention some big names there that stand out from the sports world.But yeah, everything you guys have accomplished is very impressive and can’t wait to learn more. Thank you, Dieter. How about Jeff? Hi, Jeff.
Jiho (Axie Infinity)
Hey, what’s up, everybody? Super excited to be here with some familiar faces. Also, some new faces. I am Jiho or Jeff. I’m a co-founder of Sky Mavis. We’re the inventors, the creators of a game called Axie Infinity, but also we’ve built an NFT scaling solution called Ronin. It was built specifically in the beginning for Axie. It’s allowed us to get to 2.8 million daily active players. It’s processing transactions from, I believe, around 800,000 unique addresses per day right now. Ronin is the №1 Bridge by TVL, I believe, around $8 billion in tokens deposited right now. So №1 on Dune Analytics? Yeah, we’re super excited. We think that games, collectibles, art combined with scalable infrastructure and amazing community, this is really the magic combination that’s going to allow crypto to become part of the culture, a part of everyday life. So, yeah, super excited to be here.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Perfect. Yeah, you just summed it up there quite nicely. That makes a lot of sense. Thank you, Jiho. Do you want Jeff or Jiho for the terms of this call? I will go with Jiho. Yeah. Very cool. Robbie, how about you?
Robbie Ferguson (Immutable X)
Hey, Robbie, co-founder of Immutable. Funnily, a very similar story to Jiho and Dieter, which is we started off by building games on the blockchain. So we built one of the first-ever multiplayer games on any blockchain called Etherbots. I think it came up week after CryptoKitties. From there, we’ve really been focused on building NFT scaling solutions on top of Immutable. One of the flagship content that we have to showcase that is Gods Unchained, which is trading card game we’ve built you might be familiar with Guild of Guardians. This is really…the most important thing is to use the liquidity and security of Ethereum. So we built a ZK Rollup powered scaling solution on Immutable Ethereum, which is capable of hitting more than currently more than 10,000 transactions per second. And that scales with Moore’s law. So really excited to be here. You may have heard of us from some of our recent partnerships with people like TikTok or ESL or IMVU or Playco. We’re helping power that NFTs on Ethereum.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s fantastic. Yes, so much there, I’m glad to know, is associated with Ethereum. Very cool. So everybody here on this panel is super in the space. OGs been working very hard for multiple years now to make what we see today, which has been the result of basically a banner year for, I think most of the wider space, especially NFTs and gaming. I thought today we could start by just looking at where we are now as opposed to maybe even a year ago and thinking about surprises. If you were to look at something that has stood out this year and good or bad, but has surprised you or caught you off guard, maybe we could start with that question. I think it will stimulate a lot of open conversation here. So Andrew, if we go back to you, we could start there and work our way around casually and see how. Yeah, this year in retrospect, basically some surprises.
Andrew Gross (xDAI/Gnosis)
Yeah. Well, obviously it’s been a huge year for NFTs and just seeing businesses come in, I think, has been a big surprise that the big corporations, Pepsi announced something today. Budweiser, all these huge corporations coming in. On xDai, we’ve even seen some government entities starting to use the blockchain. So one project we have is called crypto stamp. It’s done by the Austrian Post, and they’re actually using the blockchain for legal tender for stamps, issuing stamps as NFTs. And users can use those NFTs to pay for postage. So it’s interesting to see government entities coming on board as well. This is going to really lead to some interesting use cases down the road.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Yeah, that’s fascinating to see, because when you think of legal tender, it’s either the fiat currency or actually stamps is right there at the federal level, so. Very interesting crypto stamps. And I think that is a big trend, whether it’s the institutions from government or from private. Dieter, do you want to jump in? Biggest trend. Yeah, the surprise.
Dieter Shirley (Dapper Labs)
You know, you see this question before, and my answer is a bit of a downer answer, maybe. But I’m disappointed that I haven’t seen more creativity in the NFT space this year. I think Aavegotchi and Axie are like two of the most creative projects, and they predate this year by a significant margin, especially in Axie’s case. So it’s been weird to me that people aren’t trying more stuff. There’s loads of people that are copying the basic art NFT stuff, and that’s fine. I’m not sad that people want to do something that they see that’s working. But I am disappointed there aren’t more people who are trying that new stuff and hopefully we’ll see that starting to happen in the new year. I think creative ideas, net new ideas take longer. So maybe that’s why we’re not seeing them yet. But I would have thought with this sort of NFT fervor, that’s been almost 9 months now that we’d see a lot more creativity. And frankly, I wish we would see a little bit more of that. So hopefully people will give some more love to the more creative projects.
🎤 Moderator — Jesse Johnson (Aavegotchi)
I think it’s a fair point to make. It’s an interesting one, and if anyone can make it, it’s someone who helped create the ERC 721 standards. Darren, how about you? Surprises for the year?
Daren Frankel (Palm)
Yeah. I’ll speak from personal experience, just diving into NFTs more headfirst myself and actually following a few artists. I’ve been really impressed by the number of folks who had amazing creative talent that was just unseen before, and what I mean by that is like I’ll spend some time, of course, browsing Twitter, who doesn’t and seeing what the latest project is that people are hyping up. What I really love. I find a couple of artists and then I see who they’re talking about and the stuff that comes out of the woodworks. Just whether it’s 3-D animation, static 2D images, the number of artists who are finding a way to showcase their art to a broader audience, getting looks and getting the attention that maybe they just worked in the back of a studio before. It’s pretty spectacular. I think it’s been pretty life-changing for a lot of people. So I’m really excited, even if it’s limited in its use cases, I would say, like art, people’s art is people’s art. It’s beautiful. It’s amazing to look at it. It’s inspiring. I’m really excited. Still, by just the growth of the digital arts industry and using NFTs as a way to create scarcity and create value beyond just right click save. So that’s still incredibly amazing to me is what’s happening there in the patronage for it. So the art space is still amazing.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s a very good point, I think, in terms of how I used to approach art. It was a very limited option for me and I think so many people and now it’s actually as a more commonplace in so many more people’s daily life as someone who gets to enjoy art. So it goes both ways are going up, and that’s a good point. What do you think, Jiho?
Jiho (Axie Infinity)
So yeah, I think with this year. I think it’s expected, I guess, in a bull market that we would start to see like a more opportunistic people. I think it is unfortunately the case that it’s like sometimes on the OGs, who have been thinking about these problems to be the ones to capitalize and elevate the space during periods of a lot of attention. But right, like it’s the builders that are coming in now with fresh bright eyes that are also going to be building the amazing things during the next, I guess, let’s not talk in terms of cycles, but let’s talk in terms of periods, I guess so maybe like two and a half years from now. So yeah, I’m surprised that may be like. Ethereum is maybe still dominant in terms of in terms of volume, so it’s showing that right collectibles and use case collectibles and art are still where a lot of the volumes coming up from because these are basically the things that don’t require necessarily high throughput. So I guess, yeah, I’m surprised that maybe there aren’t more games, right? It’s like now like everyone’s deciding to build a game after Axie kind of blew up. But I would have thought that there were going to be at least be another team-building with at least hundreds, hundreds of thousands, like millions of users, so that we could kind of AB test with each other. So yeah, a lack of games and now we’re seeing everyone is rushing to catch up and get gaming exposure. But this is unfortunately means that, right? Like it might be another 2 years before we see really nice games that are playable and are being played at scale.
🎤 Moderator — Jesse Johnson (Aavegotchi)
So yeah, it’s a very good point and ties in with some of the previous comments. I think it was Dieter saying a lot of people pushing the easy button, perhaps in some ways. And so it’s not quite as intense as building out an entire experience or chain in that sense. So. Robbie, final thoughts on surprises for the year？
Robbie Ferguson (Immutable X)
The art boom surprised me. It was insane. I remember being on a panel with the Lava Labs guy back in 2018, and they were like the floor price is 200 bucks for a punk or something, so I’m an idiot. Clearly, many times over in the crypto space. But the thing that has surprised me, I think, is the fact that the majority of the volume was in art and not gaming. And my very strong suspicion and I’ve been talking with a few people is that the number of technical founders who are now like the next big wave is gaming, like the smartest grads out of Stanford and the U.S. universities are all building games right now. We really had found the alignment with, quite frankly, things like Axie where people see this stuff works at scale and now we’re going to see a whole wave. And I love the capital allocation. I love the crappy games coming and taking advantage of it. Arb the hell out of it, that’s how we’re going to get traction. And crypto is always had way more capital adoption that has had traction, but that in the end turns into a real utility and more legitimate players come to the space. So I think we’re going to see based off the success of some of these games, a huge number of especially mid-market game studios come in. A number of very quality games emerge over the next year, which uses a lot of the tokenomics and play-to-earn design that have been really proven out in its infancy over the past 12 months.
🎤 Moderator — Jesse Johnson (Aavegotchi)
You’re probably right about that. We’ll spin it around here and just touch on where things are going ahead? Do you see, if we look out, say, 2 years from now, like Jiho mentioned, are we going to see more of a totally different gaming landscape? Or is it just that play to earn gaming? These types of new models are going to be something separate from traditional gaming trad gaming. So what do you think, Robbie? You continue your thread there and we’ll work over that.
Robbie Ferguson (Immutable X)
But my personal thought is the two will merge. So I think we’ve seen really interesting experimentation over tokenomics and community. We’re then going to see that be complemented by incredibly high-quality games that people wouldn’t want to play ordinarily. But the purpose of just playing it as well and the merger of those two things is going to be a beautiful thing because suddenly you have something like the most powerful community and incentives in the world like you’re seeing with Axie merge with a game that people are genuinely building around it. And maybe it’s even built on the same NFT as part of people’s digits. So we’ll absolutely see. It’s just going to be massive other trials. There’s so much capital in the space right now being allocated to high-quality games, and we’re going to see this start to emerge. And my thesis has always been, I think the coolest stuff is happening in terms of what can be built on top of NFT. What was pioneered by Bored Apes where you have different experiences being built on the underlying collection. But my fundamental thesis is that at the end of the day, game developers care about the cost of acquisition, retention, revenue and viral coefficients. And NFTs have now proven out that you can smash every single one of these metrics that companies obsess over it. Like they pay billions of dollars to optimize performance marketing spend that the Tencent and Supercell levels be able to have the growth that you can have with no paid marketing, with huge viral sharing. But when you own something, you’re way more likely to be retained. Now you can actually align incentives with the owners of that ecosystem. And you could translate users from one experience to the next because what matters isn’t the particular game, it’s the actual underlying assets. I think we’re going to see transformations of just very high-quality games.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Yeah, you hit a couple of good points there. I really like the concept from the DeFi side of arbing. So it’s you’re arbing the future in a way and this match between the traditional and the new industries. So Jiho, what do you think about these two kinds of parallel universes and what happens as we go forward?
Jiho (Axie Infinity)
So what are the two parallel universes, exactly?
🎤 Moderator — Jesse Johnson (Aavegotchi)
Just the traditional gaming like you’re on the E3 floor.
Jiho (Axie Infinity)
I think it’s going to take them a while to understand the community and the economics aspect. I think a lot of it is going to have to come from people like us that have been around mentoring them and saying this is what worked around like these real economies and communicating with these with these amazing people in your communities. That’s going to be something like we’re writing the playbook. They’re going to have to learn a lot. But it’s like at least there’s a few case studies now. I think we’re also going to have to figure out like what are the types of games that are going to do well as planner in games or NFT games? There’s there are special specific types of games that naturally are conducive to having these open economies or maybe like lower hanging fruit. I do think that NFTs can enhance the experience of all games, but that the early successes are going to be around, probably games where the communities are doing a lot of the work. Does that makes sense? That’s also how I look at what consumer apps should be turned into crypto apps, like what are the consumer apps where the communities are creating a majority of the content or doing a majority of the onboarding or doing a majority of the work? So actually we do have some also…I think it’s also about figuring out what are the narratives and what are stories that we can tell that are going to get the right types of missionary builders into this space, right? Right now, we’re unfortunately getting a lot of maybe opportunistic builders, right? It’s like, why weren’t you building this 2 years ago, right? There’s always when you have confirmation of a market, you also have, unfortunately, people who are looking to take the easy route. There’s it’s going to be a lot of education. I think it’s not necessarily going to be a fast transition, but yeah, it’s going to be important. There’s going to be there, going to be so many of these games that are coming out in the next 5 to 10 years that they’re going to need to be multiple solutions for these games. So like everyone here that’s building an NFT scaling solution, right? You’re going to see different platforms, just like there’s Nintendo, which is a little bit more selective. And then there’s like Microsoft, which is like lets anybody come onto their platform. They’re going to be different levels of access and things like that. Really the first thing that we need to see is community aggregation, does that make sense? where you need the users and that is going to be what opens the floodgates. We’re also seeing, right? So much backlash against the traditional game developers that do dip their toes into the space, right? We just saw this with Ubisoft. So there’s a lot of education that needs to be done with gamers right around environmental impact. Like what are the benefits and why these real money economies don’t necessarily destroy the integrity or the fun related to these games?
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s a great point. Yeah, there’s an assumption maybe I was making that they want to come over, but some may not, and there may be even some resistance.
Jiho (Axie Infinity)
Some maybe want to. They might even announce a game and then say, Oh, we’re actually not going to build this game because our community is so vocally against it, right? But also say like they need to be more scientific. It’s like you have to poll for these kinds of things in a scientific way, rather than just like all the social media reaction is really bad, right? Because people can be really negative and against something on social media. But does that right? It’s like a silent majority thing, right? Maybe the silent majority actually want NFTs and would be spending a lot more and having a lot more fun in these games. But they’re not necessarily the type of person who’s going to shout about it on Twitter.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Exactly. Yeah, that’s a huge point. That can be applied to so many parts of so many spaces, but especially the suspicion around NFTs and that emerging conversation. So yeah, that conversation needs to happen. Very good point. Darren, do you wanna jump in?
Daren Frankel (Palm)
Yeah, absolutely. I’m happy to shed some light here on how we’re looking at it. So as the gaming, you jumped out, so as we look at the traditional gaming world versus what’s happening in the crypto space. I definitely agree that this is and I’ve talked with people who have been in the gaming space for many, many years. I’m my background is in technology. My background is in enterprise consulting and crypto and all this not in the gaming space. And what the gaming experts say is this feels a lot like exactly what you said, the early 2000s, the advent of like web-based gaming, the farm builds and the like. And there was a lot of pushback from the community. There was a lot of pushback from traditional game developers that, this stuff will never stick around. This stuff will never work. It doesn’t necessarily work for every variant. So they’re right this isn’t applying to everything. Like, some games are really, really good in this, it’s going to be web-based. I’m going to pay for these little bits and pieces here. I’m going to pay for skins. I’m going to pay for the little enhancements. But they’re still AAA gaming studios making FSP shooters that people know and love and continue to play. So by and large, the traditional gaming world will adopt the advent of NFTs, they will adopt NFTs into their respective gaming universes, but that doesn’t mean they’re going to blanket it everywhere and that it’s going to work everywhere. It’s going to stick everywhere. That’s what people like us do. We again, like I said, my background is in consulting and one of the big areas of business that Palm NFT Studio gets involved in is our creative studio, and we partner and are talking with a number of gaming studios about when you’re thinking about NFTs and how to bring NFTs into your environment and to build out your NFT experiences for your players. You need to think about XYZ things. It doesn’t really work in this part of what you guys do. It’s not really good for these games. It’s not really good for these experiences. ABC is what seems to be would be a benefit for your particular genre, your particular franchise, whatever it is, we are bringing that expertise that people who are on the ground actively involved in the NFT space every day. The expertise that they have from understanding what works, seeing what works, participating and in some cases, building and bringing that to some of these large gaming studios. So to summarize that there are going to be lots of studios, there are going to be lots of gaming companies who are going to announce things. They’re going to try but kill them. They won’t work something the community will push back, but they’ll eventually find a couple and say, Hey, these ones really work. People seem to love these people are sticking with these, and that’s what we’ll stick around, and that’s what we hope we’ll find.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Well, then, yeah, this makes a lot of sense in terms of also going back to what Jiho said about OGs and players that are purely from the NFT gaming side being like mentors almost to the traditional gaming who are no doubt curious and going to explore the options and then they need someone like Palm to come in and guide them. I would say there are certain aspects of the team.
Daren Frankel (Palm)
Yeah one thing that a lot of people forget is when we’re dealing with large gaming studios, they build games they know how to do what they do really, really well, better than most folks. That’s why they’re huge gaming companies. But at the same time, the things that make them work really, really well also can sometimes be an inhibitor to trying and adopting new things. That’s the case across any sort of enterprise. The bigger your company is, the better it is at what it does really well, and the more they focus on, let’s continue to do this. So even within these organizations, people who are super excited about this takes a long time for them to actually start to influence change and to make things happen. And so it’s amazing that we’re seeing a ton of announcements all at once. Of course, it’s going to be a little while before we see, which of these shake out and which the gaming companies behind them are going to be fully investd. Go for it.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Yeah, there are a lot of announcements coming all the time, and it’s a trend, an emerging trend, but I wonder if Dieter, you at Dapper. Maybe you’re going to give me this answer. I’m hoping one of the panelists says, which is we don’t even need trad gaming. We’re just going to take over and all the IPs are going to come to us. I don’t know. What do you think?
Dieter Shirley (Dapper Labs)
I’m mostly on the same pages there, and I think using the mobile transition is just so instructive because when mobile games came out, everyone said those aren’t real games. And actually even to this day, even at its height of monetization, the per-user average per-user revenues were way down from traditional gaming, right? Most people don’t spend 60 bucks on a mobile game. Yes, there are a few whales that pay way more than that. But most of them pay much less. And so I think that it’s going to just be a new kind of game, right? It might not be net new like Angry Birds had precursors, but they were just fringe. Match three was a genre that existed before mobile, but it wasn’t ever in the top 10. Now it’s inside every single game is a coin flip in the top 10 of being a match three of some sort and so on mobile anyway. In crypto, we’re just going to see a different kind of game that is appropriate for that audience. And the other thing that is highly likely is is that we will see a net smaller number of users, but those people will be way more engaged. It’ll be the opposite of mobile, right, where mobile is just everyone and their dog was playing games now, people that never would have played games on a console or PC. Now they’re playing games wherever they are, but they've never really engaged with them. It’s a casual thing. You pick it up, you put it down. You don’t care about it. You’re after a week, you’re probably trying a new game and you don’t care about that game again. What we’re seeing in crypto is the exact opposite. People are getting so into one experience and it becomes like a really big piece of their identity. What we may see is just like a smaller group of people, but hyper-engaged and way more longevity, right? Like months, years of engagement, more MMO like than the yearly shooter or the flavor-of-the-weekend mobile.
Jiho (Axie Infinity)
We already see this too where games that have grey markets right historically are doing really well and are lasting for decades, right? Like Eve Online, Roomscape, Roadblocks, right? These are games that they might rate like. The economy is kind of the special thing about them, right? They’re also off the case studies. The only case studies that we had to look at when we were building right like Neopets had a great market as well.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Yeah, I think that pretty much it is a great metaphor. Just like those games are great economies and also the metaphor that you could have basically the inversion of what we’ve seen with the mobile game growth experience where it’s super casual, super accessible. Here, you’ve got to get a wallet, you’ve got to learn a little crypto. But once you’re in, it’s Axie nation, right. So it’s like it’s very much a long-term type of investment because you have a stake in it you own. And Andrew, do you want to share some insights that you’re seeing from this perspective or this topic?
Andrew Gross (xDAI/Gnosis)
Yeah, just going off of that, I think we have seen that with something like Dark Forest. It started out with a really small group of developers, and it’s every round that they do, there are more people coming on. There are DAOs that are organically coming together to coordinate in different ways. And this game uses ZK technology so that moves can actually be obscured on the chain. So it’s an interesting feature of this game and one that we’ll continue to see. I would say another interesting thing is that people are encouraged to write bots, for example. So you get a whole different class of gamers who are really interested and it’s being passed on, mostly word of mouth, but each round that comes on, we’re seeing more traction with it, more people running with the game. It’s a totally different real time strategy game than what we’ve seen on the blockchain. That’s going to continue, obviously, as scaling ramps up, we’re going to be able to see games that are more real time versus what you have now where things take time to happen.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That makes so much sense in that so outside of like Dark Forest, which is really captured the imagination because of what you mentioned, it’s almost like you can learn to code, and that’s the impression I have and then join into the forest. It’s a reference to Ethereum as a dark forest, right? That famous art piece. So with xDai, is that something that you’re seeing like a focus on? Is this type of game or it’s really all types of different games?
Andrew Gross (xDAI/Gnosis)
Yeah that team is also working on a ZK dungeon game. So they’re going forward with that idea and then having these NFTs that you earn actually be used across games to unlock different powers in that type of thing based on what you earn in one game, you can then use it in the other game. So we’re seeing all sorts of experimentation really on xDai. I know some of the panelists mentioned there’s a lack of experimentation, but I would say our chain is because it’s a lower value chain, a little bit out of the limelight. We’re seeing just lots of people trying different things that they might not try if they were afraid they’re going to lose a lot of money.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Very interesting. Yeah, it’s like certain areas of the crypto space definitely attract the phone just by nature of success and what Robbie was mentioning earlier. So you also see likewise the opposite, where this flight to quality or like this is where thinkers and builders and the people here on this call. So I think we could maybe segue into a final thought piece here because we’re already coming up on about last 5 minutes. It goes with what you’re saying there were the types of players, you have programmers who are writing bots to play the game. You have all these different game economy aspects that maybe are very different from traditional gaming economies, and it’s because they have second and third order effects. So when we think of this term, the metaverse, which has really caught fire here recently, what do you think of as what matters the most going forward so that this is a thing that has a positive impact for humanity and for the gamers that play it and even the people who don’t play it as opposed to just spiraling into a dystopian future that the most common thing I get at a dinner party is like, Oh, this is the beginning of The Matrix. We’re all going to be tied to our chairs soon and we’ll mix it up here. Maybe we’ll go like, start with Jeff and then circle around the screen.
Jiho (Axie Infinity)
I think we first we can’t go in with any preconceived notions. Like some people, they read books, they watch movies, and I try actually not to do that right because I want my mind to be fresh. I want to be able to iterate and come up with my consumption of whatever is happening as I experience it, I guess maybe we have here a rare opportunity to be really on the front lines observing things as they develop as well. In terms of the principles, it should be accessible. Facebook coming in and they think that, oh, because they have the hardware, they can own distribution, that they can basically own the future soul of the internet. I think that’s flawed. I think that’s not going to work. Whatever is happening… this is basically a trend where our digital lives, our digital identities are becoming increasingly more important relative to our physical lives and physical identities. That’s really all happening. But it is important that just like we have freedoms in the physical world and we fight really hard for them, I really do think that this entire thing and I think the people on this panel, we’re on the side of freedom, we’re on the side of the users. We’re on the side of a more open and empowering future for the internet. But there are going to be people who come in and try and co-opt it for themselves. And maybe I’m being a hypocrite and maybe I’m thinking like in terms of things that I saw in movies and stuff. But I think that’s also something that we have to be super aware of and super conscious of. But yeah, I think like, bottom line, like one of the things that I’m proud of with Axie is that our user base is primarily on Android devices, which is the most accessible hardware in the world. I think that’s something that people should also be thinking about when they’re designing these experiences is how to get the right people, how to get this technology into the hands of the people that can benefit from it the most.
Robbie Ferguson (Immutable X)
I think the world is going to become fully digital, that is inevitable. So people are going to live in virtual environments. We could be in one right now. And I guess to that extent, it’s how do we best support people’s self-actualization and meaning and fair economies in that world? In this, I completely agree with Jiho. I think the most important thing is that the infrastructure on which this is built is open, secure and owned by everyone, not by a corporation like Facebook. There’s the anecdote that the internet was by default, not going to be open. There was a very hotly contested battle, and there are alternatives like Microsoft Services Network, in which people had ideas to charge per email back in the day, right? Like that was the idea of, you charge a small fee on this stuff, so this stuff doesn’t happen by default. You have to have people who are actively working every single day to make sure that this stuff stays open. That’s the most important thing we can do.
Dieter Shirley (Dapper Labs)
I’m 100% with Robbie. The only way that this isn’t a dystopian future is if we can figure out how to make a fully decentralized set of foundation layers so that you can opt into things rather than being forced into things. We’ve seen email is just a great example because it is the foundation of everything that we do, right? Like you ask someone what’s cool about the internet? They’ll tell you about Netflix and about Twitter and they’ll tell you about Facebook and what do all those things have in common that you need email to access them, right? Like that is the root base layer and the fact that no one really controls that and we can opt into it how we want to is really powerful. And yeah, most people use Gmail. But if Google gets to be too difficult to deal with or they actually break privacy in a way that’s more egregious than what they do to show us ads, then people move away from that. So I think that really blockchain is our best bet. Having these digital things and our digital lives be represented in a way that isn’t controlled by some sort of corporation.
Daren Frankel (Palm)
I love the idea of “a metaverse”. I love the idea of there’s one digital playground where everyone can play in and everyone can speak the same language and everyone’s items across whatever game they all work together. I love the vision. I love the idea. I don’t know if that idea can be really made into reality, though. The idea of having one place, it’s the same idea as having one bitcoin, one Ethereum, one blockchain. There are loads of chains. For me, when I think about “the metaverse” it’s really the metaverses, plural because the idea of just like there is one solution, one environment, one runtime environment for everything just seems out of reach is not quite the way to put it as much as just it seems like a vision that we will constantly strive for, that we just can’t quite achieve. What’s really going to happen is we’re going to see a lot of different organizations. We’re going to see a lot of different independents, startups, everyone. They’re all going to make their versions of the metaverse. If I think about what wins, what, what ends up there, in the end, it’s going to be engagement. At the end of the day, like people, mass markets, the folks who bring value into things, the ones who are going to bring the most, they’re going to get the most fun out of it. They’re going to spend their time there because they want to be there because they enjoy it. I love the idea of having common standards, and I love the idea of having these metaverse be true to their community members, and I think they should be. But especially in the early days, the ones that are going to take off are the ones that people love to play. We’ll see, long term, maybe those of us here, obviously we’re full-on in the decentralized world like that is a way to, long term, to aspire to have that truly community-run. This is something we all can connect to and live in, and there is one that is owned, operated and maintained by the community. But I think in the short term, the ones that are really going to get traction are the ones that just engage their audience.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Right. More of a Cambrian explosion and maybe the word metaverse is that sounds like you’re saying is a bit…It’s not inaccurate, but maybe that is it. Maybe it’s just there’s actually so many different things happening, and it’s a bit…hopefully it’s going to be like email where there’s that open, accessible base layer. Andrew, final thoughts on the metaverse.
Andrew Gross (xDAI/Gnosis)
Well, I agree, definitely with the panel about security as a №1 feature of this. We’ve seen what happens when data gets in the wrong hands, and it can happen quickly and it can have some pretty wide-ranging consequences. For me, it’s as Daren mentioned, multiple metaverses also speak to the idea of multiple communities, multiple DAOs. So what I really found exciting this past year is just the proliferation of DAOs, and how those are forming, how they’re going to coordinate. All of these things are open questions right now. To me, this fundamentally has the power to change how we interact with each other at very fundamental levels.
🎤 Moderator — Jesse Johnson (Aavegotchi)
When somebody raises concerns about what is this metaverse, why is it good for me, I think that would be a great example of a very specific one to mention DAOs. They’re so empowering, right? If done correctly. Obviously, they have their own inherent risks. But experimentation is happening today, and having this ability to have instant impact from anyone anywhere is really empowering and good for everyone in that all things are equal. So with that, we’re nearly out of time, but I rarely get all of you guys together. This is pretty special for me. So let’s take one extra minute each. And just if you can show me, let me know what is coming up in your calendars that you’re most excited about and maybe we should be aware of that is just not out there and circulating yet, or not widely enough known. And maybe we’ll start with you, Andrew, and go back to it this time.
Andrew Gross (xDAI/Gnosis)
Sure. So as I mentioned, we’re in the midst of a big token merge with Gnosis, which is really exciting from our perspective. The community voted for this, 90% wanting to have this change happen, so what we’re looking to do now is create an ETH2 mirrored beacon chain, which will act as a Kusama-type capacity. So really a canary network for Ethereum2 moving forward, which is a space that has been missing to have a real some real-world value at stake and to be able to communicate with Ethereum too through hopefully some trustless means. We’re working on some trustless bridges there. So really developing out this Kusama narrative moving forward as we go towards the merge with Eth2. Fascinating.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Yeah, Kusama referenced. That’s Polkadot ecosystem right there. Their equivalent?
Andrew Gross (xDAI/Gnosis)
Yeah, that’s right. Yeah. So it’s kind of an in-between a testing and a production environment. You have this staging layer where projects can still have real-world value and also be able to prepare to go to the Eth2 if they’d like to or not either way.
Daren Frankel (Palm)
Well, I’m happy to say that today we for Palm NFT Studio specifically, we announced the closing of our financing round. So we’re happy to invite a number of investors into partnership with Palm NFT Studio. Round was led by Microsoft’s M12 venture fund. So we’re really excited to be working with them on expanding the impact of Palm NFT Studio and the broadening reach of NFTs into all things Microsoft and beyond. And then at the network level, really excited by what the community has been working on will be a number of announcements coming up in Q1 of next year pertaining to the Palm Network and its continued growth. So anyone interested, please keep an eye out. Check us out at palm.io. And Q1 is going to be a great time next year.
Dieter Shirley (Dapper Labs)
I already mentioned that NFL ALLDAY is coming out. We expect to have some UFC stuff very shortly as well. And LaLiga is on deck, so from the consumer side, there’s lots of exciting stuff happening there. Folks might not have known that we actually merged with the Brud team. The folks behind Little Mikaela, they’re huge into DAOs. We’re going to have that team focused exclusively on social DAOs. So DAOs have started in this direction. But of course, they had really financial backing.This is much more about really social DAOs. DAOs around a purpose and a sense of community which is a really interesting way for us to explore. I’m just personally very excited. We have a VP of engineering starting in the new year, and we’re going to just be hiring like crazy. So if anyone wants to be working on any part of the stack, whether it’s the apps that we’re building or the core blockchain, they should definitely be looking for a bunch of new postings in the new year.
🎤 Moderator — Jesse Johnson (Aavegotchi)
That’s very good to know, and that’s all exciting headlines there. That’s awesome. I love the idea of using, you know, talking about DAOs in terms of social, because right now it’s more like anonymous allocation of capital, more like the stage we’re at. But having maybe a social layer that is not just relying on like third parties like Discord is going to be very powerful if that’s what you’re getting at there. Sounds very interesting. Robbie, how about you?
Robbie Ferguson (Immutable X)
So we have a really major partner announcement next Tuesday. One of our biggest ever. So please tune into that. The thing that’s excited me most is though, the organic traction on Immutable X. We’ve gone from 160 people building in Ropsten on our test environments to more than 600 since November 1st, which I think is pretty awesome because it’s all very well and good to go out there and win big deals and get grant etc. I think the really exciting thing is organic traction and people just wanting to build on the platform. Also in the hiring is what excites me personally because it means I can give pieces right away. So we just built on three C-suites, which is tremendous from Ramp Safety Culture and the former CMO of Shutterfly, which is really exciting. We’ve hired 45 people in the last eight weeks. So please do come and join or come join any of the wonderful companies here who are all taking a slightly different view on building up this metaverse.
🎤 Moderator — Jesse Johnson (Aavegotchi)
Multifaceted, that’s awesome, congrats on the big hiring spree and the growth that’s exciting and looking forward to more announcements. How about Jiho. Final thoughts, what’s coming up?
Jiho (Axie Infinity)
Uh,yeah, we are on a hiring blitz right now. It’s amazing that in the early days we had eight people, so it’s like we were working on one thing at a time and we’re all working on it together. So the fact that we can have, like five different teams internally all pushing different stuff, it feels, it feels amazing. We’re working really hard on a revamp and upgrade to our battle system. It’s going to upgrade the graphics, the animations, a lot of the mechanics. It’s going to be almost like an entirely different game. Historically, this is actually like our third or fourth upgrade of the battle system and just been iterating over time. So historically, whenever we’ve released, released an upgrade, it’s always unlocked a new, a new demographic and made it more accessible, because most notably, you’ll be able to get three free starter Axies without having to make any kind of upfront economic investment so people can fall in love with the game, learn the mechanics before they have to actually buy their first NFT and set up, set up a wallet. So I think that’s going to be really crucial for us. Yeah, I was excited. I was super excited about the launch of our decentralized exchange Katana. I think that exchanges and DEXs are going to be huge parts of game economies in the future. So when we’re building out Ronin, when I was when we were building out Ronin, we really wanted to make sure that there was a DEX on the chain because it’s going to be super important for liquidity of the in-game resources, basically. So, yeah, upgrading that, bringing something like more DeFi features on Ronin, I think, are also going to be super, super important for our players. And yeah, we have LAN gameplay, right? So Axies is not just one game, it’s an entire universe of games. We’re working on a bunch on a couple of different ones. Internally, LAN will allow you to harvest resources, build structures, fight for control of territory. It’s kind of similar to something like Clash of Clans and Animal Crossing and Stardew Valley had a baby, but kind of imbued with this tokenization and that really empowers the community. So, yeah, I think I think that’s like long-term, super excited about the SDK. We, you know, need to make sure that Skye Mavis is only one of many organizations and game developers that are building on top of Axies. You know, I think I think like one of the cool ways that I see web, you know, a traditional game developer is getting into Web 3 is by saying, hey, like right? Like, we’re not really sure necessarily how to build a strong crypto community. Like, we’re going to actually outsource that right? It’s like the community as a service, right? Like, you come on to Ronin, you come to build with us, you’re going to have access to our community. You’re going to basically have guaranteed users. People are going to try it out. You don’t necessarily have to…you can maybe focus more on the game mechanics, right? Which is, I think, like also like what some people would say, the space is really missing right now. It’s a great quality game design, right? And so basically, I think the, I think the economy and the community stuff will be kind of owned by the people on this call and then we’ll be bringing on right like the game, game developers, game designers and coming in and right. And it’s kind of like adding the final piece to the transformer that gets us to. I think I actually disagree with Dieter. I think that these games are going to be the largest games of all time. I think they’re going to envelop entire societies and really because there are a lot of people who won’t play games because they see them as a waste of times. These are games that can actually help you in real life and create really strong social and economic relationships with anyone anywhere in the world. I think that’s incredibly powerful, and I think it’s going to be something that appeals to billions and billions of people.
🎤 Moderator — Jesse Johnson (Aavegotchi)
So well, the trend of digital life, right, and is taking as our digital selves are taking more importance over what it used to be compared to our physical space. So it goes to reason that more time spent and having these incentives, you would want to kind of be long term oriented and aligned with certain communities and chains and projects. But I think this has been an awesome conversation. I’m so glad to have connected with you all, and I hope everyone listening has got something out of this call and got to know more about some really awesome projects, initiatives and chains here. So I thank you all for joining, and big thanks to everyone at the old friends gathering on the 8th Annual. Thanks, everyone!
🔥 About Us
IOSG Ventures, founded in 2017, is a community-friendly and research-driven early-stage venture firm. We focus on open finance, Web 3.0 and infrastructure for a decentralized economy. As a developer-friendly fund with long-term values, we launch the Kickstarter Program, which offers innovative and courageous developers capital and resources. Since we consistently cooperate with our partners and connect with communities, we work closely with our portfolio projects throughout their journey of entrepreneurship.