This article is a transcript of @hicaptainz's speech at MuChiangmai.

In the past six months, on-chain games have been popular. Let’s first take a look at how other VCs and institutions view on-chain games. In the past two months, Paradigm and Coinbase have successively given their top ten tracks for the future, two of which are commonly favored, namely on-chain games and RWA. In Paradigm’s list, the descriptions are on-chain games and on-chain treasuries (that is, government bonds), while in Coinbase’s list, the descriptions are on-chain games and Tokenizing Real World Assets. Therefore, in the next bull market, on-chain gaming is likely to become a mainstream narrative.

Since so many people are optimistic about this track, let’s first understand what full-chain games are. A simple definition is this:

A fully onchain game means that all game logic and states (assets and other) are on the chain and implemented through smart contracts. Sometimes, we also use "onchain game" to refer to it. In the literature of on-chain games, we often see terms such as "Autonomous World" or the equivalent "On-Chain Reality".

Sometimes we also see concepts such as so-called Web2.5 games and GameFi games. What are the differences between them? You can refer to the table below:

 

Web 2.0 Game

Web 2.5 Game

Web 3.0 Game

How it works?

No blockchain

On-chain Asset

Off-chain Logic

On-chain Asset

On-chain Logic

Terms

Traditional Game

GameFi

FOC Game

To explain briefly, Web2.0 games do not use any blockchain technology, which is what traditional games are. Web2.5 games are games where only assets are on-chain, and the game logic is implemented off-chain, which is what we talked about before, GameFi games. The real Web3.0 games are games where both assets and game logic are on-chain, which is called a full-chain game.

Maybe someone will ask at this time, why do we need to put all the game logic on the chain when the performance of the chain is so low? I have tried to answer this question from the perspective of narrative (autonomous world) and technology (composability and serverless, etc.), but the effect is not good, so now I try to answer it from the perspective of "history". First of all, let me ask a question, why do we need DeFi? You can try to think about it yourself first, the answer is not that simple.

Let’s go back to 2012-2018. During this period, we did not have concepts like “DeFi” and “Web3”. The mainstream narrative of cryptocurrency was “payment”. For example, BTC was considered a P2P electronic cash system. Electronic cash, of course, is used for payment. Under this narrative perspective, a typical feature is that whenever an online retail giant announces that they have begun to accept BTC as a means of payment, the market soars.

Smart contracts had not yet been introduced to blockchains during this period, so most chains were forked from BTC. Each chain had a Native Coin, and most were based on POW's "proof of work".

In 2015, Ethereum was born and became the first smart contract platform. Its emergence has greatly changed the way ICO (Initial Coin Offering) operates. The changes are shown in the following figure

 

Before

After

Medium

BTC

ETH

Procedure

Sending BTC to one person's address and receive altcoins manually

Sending ETH to ICO contract address and receive tokens automatically

Altcoin term

Coin (LTC, Doge)

Tokens (USDT, UNI)

Paradigm norm

Centralized Investment

Decentralized Investment

In the earliest ICOs, the project party used BTC as a financing medium. To participate in ICO, users need to send BTC to the project party's address, and then the project party manually returns the altcoins. At this time, the term "coin" is used to refer to altcoins. After the emergence of Ethereum, the financing medium has become ETH. To participate in ICO, users only need to send ETH to the ICO contract address, and the contract will automatically return the corresponding altcoins. At this time, the term "token" is used to refer to altcoins. From an investment perspective, this is a paradigm shift, from the previous "centralized investment" to "decentralized investment", referred to as "DeInvest".

Then, from 2019 to 2022, the infrastructure of DeFi began to emerge. For example, the on-chain exchange "Uniswap", the on-chain lending protocols "AAVE" and "Compound", and the on-chain stablecoin protocol "MakerDAO". At the beginning, all the on-chain protocols were called "Open Finance". In 2018, Brendan Forster of Dharma Labs first proposed the term DeFi, which became popular all over the world.

So, let's try to summarize DeFi. How does the financial industry combine with blockchain technology? Refer to the table below:

 

Before

After

How to utilize

Token

Smart Contract

Method

Tokenization

Write Financial rules into smart contract

Narrative

Open Finance

DeFi

If we look at the later DeFi projects, they all try to write “financial rules into smart contracts”, so the initial combination is just “issuing coins” or “tokenization”, and later they began to transition to “using smart contracts”, and the narrative also changed from “open finance” to “DeFi”.

Now let’s think about the combination of games and blockchain technology. Should we “tokenize” or use “smart contracts”? If it is “tokenization”, should we use “homogeneous tokens” or “NFTs”? It should be noted here that currencies and securities in the financial industry are homogeneous, while game assets and characters are non-homogeneous. This is the fundamental reason why NFTs are often seen in blockchain games but rarely seen in DeFi.

Let’s continue to review the history of blockchain games.

Back to 2017-2020, why choose 2017 as the starting point? Because CryptoKitties was born in this year, all cats are NFTs (they are also the inventors of NFTs), and the breeding rules are written into smart contracts. However, they did not issue coins. The following 2020-2022 is the star moment of GameFi, and a large number of star projects have emerged, such as Axie Infinity, Starsharks, Metamon, StepN. The typical characteristics of these projects are that they use a sophisticated multi-token system and use NFTs to represent game characters, but do not use smart contracts. So they are still centralized games (CeGame).

It is 2023, and it is still crypto winter. It seems that 90% of GameFi projects are dead. Is making a game just for "issuing coins"? What if the game rules are also written into smart contracts? So we found the full-chain game "Dark Forest". Following the name of DeFi, maybe it should be called "DeGame".

Following the example of DeFi, we can draw a conclusion that full-chain games can help games achieve decentralization and protocolization. Decentralization means that the rules of the game are written into the smart contract code, and the code is usually managed by DAO. "Protocolization" refers to the process of standardizing specific functions or operating methods. This standardization means that this function or operating method is no longer private or proprietary, but becomes a "public good" or standard that can be adopted and used by a wide range of developers or organizations. Projects in DeFi are usually called "DeFi protocols" based on composability, so full-chain games can also be called "game protocols" based on their high composability. At this time, the game also becomes a "public good."

Now we can answer the question we asked at the beginning: Why do we need “full-chain games”? The answer is actually very similar to DeFi:

  • The game lasts forever: there is no centralized entity or server, and it exists forever on the blockchain.

  • Trustless: Code is law.

  • No permission required: anyone can participate

  • Interoperability: Different systems, devices, or applications can communicate and interact effectively.

  • Composability: Various components or systems can be combined to form the basis for creating larger or more complex systems.

  • Promote innovation: Any developer can create new applications or services without having to start from scratch, thus avoiding “reinventing the wheel”.

So can all game types be made into full-chain versions?

No, my idea is that only those that meet the following characteristics are suitable for the full chain version:

  • A game with relatively simple rules

  • Games that don't require instant feedback

  • PvP instead of PvE

  • An open system

  • Online gaming, not single player

Next, let’s talk about narrative.

The term "full-chain game" is actually more of a technical discussion. The more popular term in the narrative is "Autonomous World", which comes from Ludens of Lattic. He wrote a short paper in 2022 to explain his ideas. The details can be found here: https://0xparc.org/blog/autonomous-worlds

In addition, following DeFi, funblock and I also proposed the concept of "decentralized gaming (DeGame)". For details, please refer to this link: https://captainz.xlog.app/The-Evolution-Of-DeGame-And-The-Protocolization-Of-Gaming

The above is what I want to say about the full-chain game. But in the end, I would like to discuss a little bit about the social track.

Following the practice of finance and games, are there two ways to combine social and blockchain? Issuing coins and smart contracts. Then should we also call those social projects that only issue coins and do not use smart contracts "SocialFi" or "Web2.5 Social", and those that write social rules into smart contracts "Onchain Social", "DeSocial" or "Web3.0 Social", or even "Open Social" or "Autonomous Social"? Let's classify the currently well-known social projects.

 

FT

NFT

Smart Contract

Web ?

FriendTech

Yes

No

No

Web 2.5

Social Protocol

Yes

Yes

Yes

Web 3.0

If you are interested in the above concept of "social networking on the chain", you can contact me. I also have some new ideas in this regard, and we can exchange them. Thank you.