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Posted on May 13, 2024Read on Mirror.xyz

Levelling Up

How Arbitrum Aims to Secure its Position in the Growing Gaming Landscape

The gaming industry is rapidly evolving, and blockchain technology is set to transform how we play and interact with games. As the leading Ethereum scaling solution, Arbitrum has recently announced the Gaming Catalyst Program (GCP) to position itself as a prime destination for games.

The Arbitrum Gaming Catalyst Program

The Gaming Catalyst Program (GCP) is an ambitious initiative aimed at positioning Arbitrum as a leading blockchain for game developers. Despite Arbitrum's success as the leading optimistic rollup, especially in the decentralized finance (DeFi) sector, its presence in the gaming vertical remains below expectations.

These Dune visualizations represent two of publisher Treasure's most popular games, BridgeWorld and Smolverse, as well as transactions for MAGIC, the common token in the Treasure ecosystem, and Trove, the ecosystem's marketplace. Recently, Treasure was offered the opportunity to build its upcoming Treasure Chain on the Op Stack. Source: https://dune.com/filarm/arbitrum-gaming

While rival optimistic rollup Optimism has been also lagging behind, other chains like BNB and Polygon have been thriving thanks to gaming applications. The GCP aims to leverage the network's success in decentralized finance (DeFi) and replicate it within the gaming sector, targeting rapid growth and quality enhancement in gaming through a substantial allocation of resources and support to game developers.

Key Components of the GCP include:

  • Comprehensive Support for Game Builders: The program offers essential resources such as funding, mentorship, and technical assistance to expedite the development and launch of games on Arbitrum.

  • Strategic Investment in Talent and Projects: By focusing on high-potential projects and top industry talent, the GCP aims to enhance the quality of games and ensure efficient use of resources.

  • Partnerships with Established Publishers: A substantial portion of the program's funds (160 million ARB, or 80% of the total budget) is allocated to publishers with established expertise and networks in the gaming industry. This approach allows Arbitrum to tap into existing infrastructures and relationships, accelerating the growth and success of its gaming ecosystem without having to build everything in-house.

  • Infrastructure and Tooling: An integral component of the program is its focus on developing essential gaming infrastructure and tooling, with 20% of the total grants—amounting to 40 million ARB—earmarked for this purpose. This strategic allocation is designed to address current gaps in the ecosystem, such as enhancing game engine compatibility, optimizing mobile infrastructure, and implementing advanced payment solutions.

  • Development of Engaging and Retentive Games: The goal is to create games that not only attract but also retain players, supported by a Venture Team and an expert Council to maintain high standards.

  • Diversification into Gaming: While continuing to strengthen its DeFi applications, Arbitrum aims to expand its use cases by building a robust gaming platform, thereby attracting a wider audience.

The GCP plans to allocate a total of 200 million ARB over two years to achieve these objectives, with the vision of establishing Arbitrum as a prime destination for game developers. As a comparison, other blockchains have launched the following gaming-focused grants and incentive programs:

  • Immutable: $500M Ecosystem Fund from June 17, 2022

  • Ronin: 150M RON or ~$390M at the time of writing from January 27, 2022

  • Avalanche: 4M AVAX or ~$130M fund from March 8, 2022

  • Polygon: is currently raising a $100M fund together with Immutable

  • Solana: $150M grant program from November 26, 2022

  • Optimism: $2M retroactive grant to on-chain games from January 11, 2024

Leveraging DeFi to Boost Gaming

While starting with a delay, Arbitrum may have some edge over other blockchains. In particular, Arbitrum can capitalize on its strong DeFi sector to create a synergistic relationship between the gaming and DeFi verticals. By leveraging the deep liquidity and capital within its DeFi ecosystem, Arbitrum could create new opportunities for users to invest in and support nascent gaming projects, fostering growth within the gaming industry while benefiting from the existing infrastructure and user base of its DeFi sector.

Some potential ways Arbitrum could connect its DeFi and gaming verticals include:

  1. Launchpad: Arbitrum could develop a gaming launchpad that allows DeFi users to directly invest in new or emerging gaming projects. This could create a bridge between the two sectors, allowing DeFi users to deploy capital and earn additional yields while supporting the growth of the gaming ecosystem.

  2. GameFi: By combining elements of gaming and DeFi, GameFi projects can let players earn rewards or in-game assets through various gameplay activities and then seamlessly invest them in DeFi protocols.

  3. NFT Marketplace: Arbitrum could integrate its DeFi sector with marketplaces for gaming-related NFTs, enabling users to trade and invest in gaming assets. This could create a new avenue for users to participate in gaming projects and potentially earn yields from their investments.

Conclusion

While other blockchains may currently have a head start over Arbitrum in the gaming sector, the GCP arrives at an opportune timing as the blockchain gaming trend is still in its nascent stages. With this initiative, Arbitrum is not just catching up but is strategically positioning itself to lead in this emerging market. As the blockchain gaming landscape continues to evolve, Arbitrum's proactive approach and substantial investment signify its commitment to leveraging its advanced tech stack to become a prime destination for game developers and a leading player in the expansive future of blockchain gaming.

Industry blockchain activity in Q1 2024 by active wallets - DappRadar data

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