What is Web 3.0, NFT Blockchain Gaming, P2E, Esports, and the Metaverse
Written by Melcom Copeland
WadzPay Group Head — Global Strategic Blockchain Partnerships
There is no doubt that everyone and their grandmother today are talking about NFTs, and in fact, some grandmothers (and grandfathers for that matter) in Cabanatuan City, a town about 160km from Manila in the Philippines have actually made a profit and supplemented their incomes from NFTs. A YouTube mini-documentary released on May 13th 2021 featured a whole community turned Axie Infinity gamers including an elderly couple earning incomes while experiencing hardship during the lockdowns of the COVID-19 pandemic.
So how did these non-traditional, non-tech savvy everyday people get involved and adopt blockchain-based gaming and the play-to-earn phenomenon? Before trying to answer this intriguing question, let’s first discuss and define some of the latest trends and buzzwords in the decentralised blockchain gaming space as many of the phrases, descriptives and acronyms are being used interchangeably and synonymously oftentimes in error.
What is Web 3.0 or Web3?
It is said that Web 3.0 is the next phase of the Internet revolution, an “Intelligent Web” where all data including content and transactions are analysed by a decentralised peer-to-peer network of computers. Tim Berners-Lee known as the inventor of the World Wide Web called this The Semantic Web, and Web 3.0 was first coined in 2006 by New York Times journalist John Markoff.
From a blockchain and cryptocurrency perspective, Ethereum Co-Founder Gavin Wood spoke of “web3” in 2014 from the context of improving the interoperability, scalability, and transaction speeds of blockchain networks that have been historically operating as silos which led to the formation of Polkadot blockchain and the Web3 Foundation.
From an everyday user perspective, one of the revelations of web3 is where the end-users own and control their identities, data and digital assets. Fact of the matter is it is not easy to explain Web 3.0 or web3 because it is still being built.
There is no one definition, nor is there a single inventor or creator of the next generation of the Internet. What we do know is web3 provides a new platform where the world’s largest corporations no longer syphon, control, and monetise consumer data without prior consent.
Blockchain gaming a.k.a NFT Gaming evolved when CryptoKitties developed by Axiom Zen was the first viral game DApp (decentralised application) launched as an ERC20 token on the Ethereum network in November 2017.
What exactly is blockchain gaming?
As the name suggests, blockchain gaming is a term to describe games that are hosted and operated on decentralised blockchain networks. Blockchain gaming has revolutionised the gaming industry by introducing the creation and true ownership of digital assets by gamers.
Unlike traditional, centralised gaming systems that held players and their assets hostage, players now have the opportunity to own their in-game digital assets in the form of NFTs which can be verified for uniqueness and rarity, traded, and transferred to anyone including across different platforms. Even if the original developer of a game vanishes, the game and the player’s in-game digital assets remain.
Blockchain technology applied to gaming has created a whole new player driven digital economy based on tokens and cryptocurrencies giving gamers the opportunity to earn an income from monetising time from their gameplay and the transactions concluded from NFT trading on marketplaces run and governed by smart contracts.
Play-to-Earn is a new business model supported by a game’s native token, or in-game resources tokenized (NFTs, or non-fungible tokens) and stored on the blockchain. Allowing gamers the ownership over in-game digital assets, and the ability to increase value over time by actively playing is the foundation of P2E gaming economics.
Incentive rewards earned by gamers and the loyalty built amongst gaming communities within these innovative new blockchain-based digital gaming economies is taking the gaming industry by storm. The more time players spend on the games, there is an increased likelihood of them to earn digital assets and cash these out for local fiat currency.
Arguably, there are potentially two camps of players putting in the “work” to earn money from the games — 1) those that are doing it out of necessity to earn supplemental income but may not really be “into” the game, and 2) those who actually enjoy the game and see the value from the time put into gaming. Either way, both types of players and the game creators benefit financially from the P2E business model. Game creators can profit from transaction fees inside and outside of the game.
Esports, or “electronic sports” are organised competitive video gaming events, and have become part of mainstream culture as revenues for platforms are projected to exceed $3.5 billion by 2025.
I recall being back in the San Francisco Bay Area about 4-years ago shocked to see a live televised competitive esports event on ESPN network. I couldn’t believe my eyes seeing an arena packed with 20,000 or more fans cheering on their favourite video game playing esports team on a major television network.
Today, you have esteemed academic institutions such as Staffordshire University in the UK offering undergraduate degrees focusing on the business, broadcasting, and events of esport. We at WadzPay feel that blockchain technology will transform esports as this gaming niche and the entire esports ecosystem is ideal for blockchain-based digital currency payments. Like the cryptocurrency and NFT effect on blockchain-based hyper-casual games, the integration of blockchain and crypto into esports has huge potential. In 2021, the convergence of crypto and esports was evident from a few major tie-ups between Tier 1 crypto exchanges and esports organisations notably, FTX and their $210 million deal with esports giant TSM for naming rights. FTX subsequently invested in a seven-year deal as the official crypto exchange with Riot Games’ League Championship Series LCS.
Crypto.com tied-up with London-based esports organisation Fnatic for a multi-year deal worth more than $15m where the partnership would launch new digital products, such as exclusive Fnatic NFTs. As cryptocurrency payments go mainstream, esports fans will gravitate towards trusted brands who have simplified blockchain-based payments allowing seamless and frictionless customer experiences. The entire community of esports stand to benefit transacting with blockchain-based digital currencies — from esports management teams, gamers, game publishers, game creators to esports event management organisations to the fans.
The term metaverse was coined by Neal Stephenson in his 1992 novel Snow Crash to describe a virtual world where virtual real estate can be bought and sold. More recently popularised when Facebook announced a brand name change to “Meta” that entailed plans to develop a centralised metaverse where people can work, play, shop, socialise, and partake in other activities you would do in the real physical world. Virtual real estate is currently the primary use case for the metaverse where major brands are taking stock. The fashion industry has taken notice of the potential of the metaverse, and the likes of Ralph Lauren, Nike, and Adidas have entered the metaverse selling digital collections to consumers ready to suit up their virtual avatars in the latest virtual gear or skins. Metaverse-based virtual worlds and the digital economies that encompass them are years away from any real-world mass adoption. Virtual headsets and VR glasses are still inaccessible by most while bandwidth limitations, graphically inferior interfaces, unsecure, and not very user-friendly experiences will remain the norm in the meantime. The gaming sector supported by well-designed token economies will likely be the first to adopt and flourish in the metaverse once these platforms become more open and interoperable. Once the digital identity and data ownership solutions capabilities are in place, and both hardware and software accessories become more feasible to obtain by the masses, we will likely see this new realm be absorbed quickly by the generations made up of the Millennials and Gen Z, for example, the digital natives. Today, the metaverse is a virtual wild west land grab, but tomorrow it could be a place all about digital property and virtual digital assets rights. Value being created due to rarity, scarcity, supply, and demand creating value over time just like in the physical world.
So how do non-traditional, non-tech savvy everyday people such as the elderly couple in Cabanatuan City, Philippines get involved and adopt blockchain-based gaming and play-to-earn? The combination of the impact of a global pandemic and the game design incorporating game theory and cryptoeconomic incentives were the perfect combination to see Axie Infinity and the play-to-earn model take-off. The creation of an in-game economy where digital assets can be earned and exchanged for real money is taking the gaming industry by storm. The process to buy-in, perform in-game transactions, and then off-ramp or cash-out to local fiat currency on these blockchain-based games aren’t as frictionless and seamless as we would like, but this user-experience will evolve and improve.
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WadzPay is an interoperable blockchain-based payments ecosystem. The company was founded in 2018 in Singapore and currently operates in South East Asia, South Asia, the Middle East, and Africa.
WadzPay saw the potential for CBDC and Digital Assets to lead the next revolution in the payments industry: enabling faster payments, improvements in security, and cost-efficiency with optionality.
WadzPay is working with large international payment companies, banks, and global companies to enable digital asset-based transaction processing and settlement.