Video games have always been an escape destination to depart from the rigors of the real world. But, at present, it is not only a place for the mere joy the gamer derives; video games have evolved into a land of opportunity for players to earn real money for engagement.
Most importantly, with the surge in popularity of NFTs and crypto, “Play-to-earn” is under rapid adoption, and the concept of “Pay-to-play” is fast becoming a thing of the past.
Though play-to-earn and in-game NFTs are considered a growth engine of the gaming industry, it is necessary to look at issues that will hamper their growth and wider adoption in the near future. One such key issue in the blockchain is Interoperability. So, in this blog, let’s talk about interoperability and how cross-chain will be a solution for it.
But, before diving into the topic, we like to highlight recent specific news that captured our attention. It is highly relevant to our today’s article as well:- “Meta (formerly, Facebook), Microsoft and 33 other tech giants unite to form Metaverse Standard Forum to drive interoperability.”
This forum claims to set interoperability standards for the open and inclusive metaverse bringing different platforms together. Though it is not yet clear how they will do it, it’s worth keeping an eye on it.
On the other side, the counterparts in the Web 3.0 ecosystem believe the metaverse will be built on permissionless blockchain networks to decentralize data and value sharing amongst networks. According to the leading voice in crypto, David Greene, the metaverse by Meta or Microsoft in the existing Web 2.0 makes the future of the internet even more centralized.
To date, these companies have enjoyed keeping the users’ data in a siloed digital environment instead of borderless neighborhoods. So, their promise of open metaverse interoperability is too big to digest. Yet, there is one term that made us curious, other than the big names in the news, i.e., interoperability.
Let’s start with a simple definition of it.
What Is Interoperability?
Interoperability refers to the ability of computer systems or software to exchange and use information. For example, in blockchain-based games, interoperability is when a player acquires an in-game digital asset like a t-shirt, skin, guns, or other props. He can use the same in multiple games in different blockchains. Interoperability allows the movement of in-game assets around the different digital realms. It brings endless possibilities to monetize for both gamers and gamer developers. This kind of interoperability between blockchains can be made possible through cross-chain networks, which we will discuss later.
In general, when we talk about interoperability, there are two types:
- Cross-platform interoperability
- Cross-application interoperability
Cross-platform Interoperability simply refers to playing a game on different platforms like smartphones, Xbox, Playstations, PC, etc. For example, gamers can play Fortnite games on Xbox, PlayStation, PC, etc. Most traditional game producers claim cross-platform access points to their gaming ecosystem as Interoperability.
But, there is one catch to it. The borders of the centralized game ecosystem are entirely closed. The in-game items, titles, or tokens earned in the game, remain inside the game ecosystem. Gamers cannot use those in-game assets elsewhere. So, when you lose interest in a game and stop playing it, you won’t be able to take ownership of the in-game assets that you purchased. If you leave the game, you lose the in-game assets as well.
The term cross-application refers to the use of in-game digital assets interchangeably across two different games, even in an entirely different ecosystem.
Cross-application Interoperability can be further classified into:
- Cross-application within a network
- Cross-application between two different networks
Cross-application within a network
When in-game assets of two different games built within the same network are used interchangeably, it is called cross-application within a single network. Here network refers to big game producers like EPIC Games, Blizzard Entertainment, etc. For example, a player of Fortnite can use their skin and gun in Robo Recall. In this example, though the game applications are different, both the games come under a single network called Epic Games.
Cross-application between two different networks:
When an in-game asset of a particular game in a network is used in another online game, it’s called a cross-application between two different networks—for example, World of Warcraft: Battle of Azeroth with the gun and skin of Fortnite. In the said example, World of Warcraft is from Blizzard Entertainment, and Fortnite is from Epic Games. In the above example, both the games are different, and the game network is also different.
That’s the promise of extended interoperability the blockchain technology can bring with cross-chain. With cross-chain bridges, game items are not confined to any single digital ecosystem. Instead, players can move, use, and trade in-game items in any digital ecosystem they want. These are called Cross-chain NFT games.
What is Cross-chain?
Cross-chain refers to the activity that takes place between two different blockchains. It allows the exchange of information and value without the involvement of intermediaries. The codebase needs to be standardized, isomorphic, or heterogeneous chain systems to make effective cross-chain interactions.
Let’s make it easy with an example. In most cases, the blockchain systems must utilize similar protocols to be cross-chain systems. Blockchains have languages to them, just like humans do. If one blockchain speaks English while the other blockchain speaks Hindi, cross-chain interaction is tough to do without a shared protocol between them. If you still want to pursue cross-chain interaction, you need an intermediary like centralized exchanges to negotiate communication between the blockchains. However, bringing these middlemen defeats the actual purpose of cross-chain interactions, i.e., decentralized interoperability.
The primary objective of cross-chain interaction is to break the siloed nature of different blockchains and create an intertwined, intermediary-free, and seamless distributed ledger system. Most importantly, it helps the users tap into the benefits of various consensus mechanisms and make the best out of all worlds. Some of the cross-chain products include Polkadot, Cosmos, Wanchain, etc. Now that we have talked enough about cross-chains let’s get into the role of cross-chain in NFT Games.
Role of Cross-chain NFT Games:
Most of the NFTs and crypto games are built on the Ethereum network. Ethereum network accounts for 80% to 95% of the NFT market share. But, the NFT market is slowly moving towards other blockchain networks, paving the way for a multi-chain future.
Let’s build a strong argument with some real examples: According to CryptoSlam, in the past 7 days, the sales volume of NFTs on different blockchains such as Ethereum at $108 million, Binance Smart Chain(BSC) at $ 47 million, Solana at $24 million, followed by Polygon, Flow, and Ronin (Axie Infinity). Though BSC is a distant second, it’s getting big daily. So, why do NFT users and gamers shift towards other blockchain networks?
The most prominent reasons are slow processing and high gas fees. Ethereum mainchain is becoming inaccessible during the peak activity period. Can you recall the days of crypto kitties and the Ethereum congestion crisis? Ethereum essentially becomes unusable at the time of need, especially for small transactions. It led to an exodus of crypto users to cheaper and faster alternatives like Solana, Avalanche, BSC, etc.
These issues induced the creator of Dapper Labs, NBA Topshots, to launch Flow Blockchain. It is especially for NFTs and crypto games. Similarly, Axie Infinity, play-to-earn game, developer Sky Mavis launched the sidechain Ronin to handle gamers’ high transactions. All these created an environment of buy/sell NFTs within the blockchain specific to the game. Due to this, play-to-earn NFT gamers face the restriction on the transfer of in-game assets.
To move NFTs across blockchains, we need blockchain bridges. Unfortunately, these bridges are getting hacked repeatedly, leading to billions of dollars being stolen in cryptocurrency.
This is where Cross-chain NFTs come in. It is vital to develop a bigger and wider NFT space. Interoperability achieved with cross-chain will broaden the play-to-earn crypto gamers and use case for their in-game digital assets. Cross-chain NFT games encourage more blockchain transactions and scalability and promote standardization across multiple applications.
As Play-to-earn crypto games bring more people closer to blockchain tech than cryptocurrency as a financial instrument, NFTs have a huge role to play. For gamers, cross-chain NFT enables their in-game assets to perform more activity around different games and enhance their liquidity option by allowing them to be interoperable between the chains.
Though NFTs are at an early stage, cross-chain interactions have a long way to go to become fully interoperable. But, cross-chain NFTs are the future of transactions.