DeFi: Proof of Play raises $33MM; Ordinal's creator launches Runes
Proof of Play aims to abstract away the UX hell presented in Web3 player onboarding and gameplay, and Runes is bringing feasible fungible tokens to Bitcoin
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Today we highlight the following:
GAMING: Proof of Play Raises $33MM, Wants To Build ‘Forever Games’ On-Chain (link here)
DIGITAL ASSETS: Bitcoin Ordinals Creator Announces New Fungible Token Protocol 'Runes' (link here)
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GAMING: Proof of Play Raises $33MM, Wants To Build ‘Forever Games’ On-Chain (link here)
Proof of Play, a Web3 gaming startup helmed by Amitt Mahajan, one of the creators of Farmville, raised $33MM in a Seed funding round led by a16z and Greenoaks Capital. Proof of Play aims to develop games that diverge from the typical "play-to-earn" models. Their inaugural on-chain game, Pirate Nation, is a social RPG whose game contracts serve as a foundation for developers to craft their own games or expand within the Pirate Nation universe - e.g., allowing developers to create games featuring Pirate Nation NFTs or individual pirate characters. It debuted in a closed beta in December on Polygon and has now migrated to Arbitrium Nova.
Web3 gaming terms like play-to-earn, gas fees, smart contracts, wallets, and NFTs have caused confusion among gamers. Damian Bartlett, team lead at W3E Gaming, provides a realistic perspective on the matter:
"When I first came over from Web2 to Web3, it wasn't a quick decision. I had looked at it for several months and just got so confused that I didn't take that step sooner. There are a lot of games where you sign up because something catches your eye. And then you're suddenly hit with wallets; you're hit with seed phrases and all these terms that are just very confusing to somebody new to Web3 gaming."
Proof of Play aims to abstract away the UX hell presented in Web3 player onboarding and gameplay via Mirroring and its Game Wallet. Players authorize the Game Wallet just once using their primary Web3 wallet (e.g., MetaMask). Subsequently, this Game Wallet executes in-game actions without any fees, popups, or transactions to sign. The Game Wallet does not store any funds or player assets, meaning if someone were to gain access to it, they would only be able to perform gameplay actions on the player's behalf—while the player's assets remain in their main wallet.
Pirate Nation also uses meta transactions to streamline transaction authorization. When players sign a transaction, a relay server comes into play and acts as an intermediary, covering the associated fees on behalf of the players. Next, the relay server broadcasts the transaction through a Trusted Forwarder contract, which (1) verifies the transaction's signature, ensuring its authenticity, and (2) forwards the transaction to the Game Contracts for processing. This approach eliminates the need for players to be aware of the tokens associated with the network they interact with.
Pirate Nations introduced Mirroring as a better alternative to traditional bridging, which allows users to transfer assets between two separate networks. Unlike bridging, Mirroring ensures ownership security through a single-chain purchase process, eliminating additional transfer steps between networks. Specifically, when a user buys a token (e.g., an NFT) on a Layer 1 network, Pirate Nations monitors those transfers. They employ their mirroring system to temporarily store the purchase in their L2 address. After confirming the block, the token is transferred to the new owner.
Overall, the play-to-earn approach, coupled with less-than-ideal UX, has impeded the widespread adoption of Web3 games. Take, for instance, the leading Web3 game in Q2 2023, Alien Worlds, boasting 4x the daily unique active wallets compared to the second most popular game. In Alien Worlds, players mainly engage by mining Trilium, the game's native token, using a virtual 'Shovel' on designated land plots. They can then transfer these tokens to Binance Smart Chain and increase their Trilium holdings via staking. The process involves simply clicking a button and accepting a transaction request popup to initiate mining. Now, let's juxtapose this with GTA V, a Web2 game released a decade ago.
We like Proof of Play's emphasis on making games fun without relying on play-to-earn mechanics. Another notable initiative is Dappicom, a non-profit, open-source project aiming to emulate classic Nintendo games on-chain. With gaming tech projects like ImmutableX equipping developers with SDKs, APIs, and a robust infrastructure, coupled with hundreds of millions poured into Web3 gaming each month, we envision more sustainable game economies; ones that extend beyond mining and staking tokens as their core focus.
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DIGITAL ASSETS: Bitcoin Ordinals Creator Announces New Fungible Token Protocol 'Runes' (link here)
Casey Rodarmor, the creator of Bitcoin Ordinals protocol, has launched his latest project - Runes. For context, Ordinals act as a system for numbering and tracking satoshis - the smallest monetary unit in the bitcoin cryptocurrency system, equivalent to one hundred millionth of a bitcoin. Each Ordinal is a non-fungible token assigned to a satoshi, which can then be tracked, traded and inscribed with data like images and videos. In effect, enabling users to create tokens, known as BRC-20 tokens, on Bitcoin which inherit the network's security.
The new protocol Runes looks to scale fungible tokens built on top of the Bitcoin network, while solving some of the issues inherent with Ordinals. Ordinals current design impacts network latency and transaction fees as each Ordinals transaction requires a corresponding Bitcoin transaction. The challenge comes with Unspent Transaction Output (UTXO). UTXO is the balance of an address after a transaction has been made, equating to the total balance remaining after the output of a transaction - the diagram below highlights the UTXO in yellow. While each Ordinal requires a new transaction, with the UTXO unused, Runes’ token balances are instead held by UTXOs and each transaction can hold any amount of Runes. This enables much greater efficiency, flexibility and scalability compared to Ordinals.
While several efforts have been made to create fungible tokens protocols on Bitcoin each exhibit their own challenges. With BRC-20s the challenge comes with not being UTXO-based, others like Omni Layer and Counterparty require a native token to operate fully and also don’t take advantage of UTXO. Runes have the flexibility and scalability to make Bitcoin tokens a feasible option for projects. One challenge we see around building apps around Runes is that it would require managing the UTXOs of different tokens within a wallet, which may add operational complexity for builders.
Our takeaway is that Ordinals will continue to be the go-to for inscriptions and NFTs on the Bitcoin network, whilst the Runes protocols will allow dapps to create their own fungible tokens on the network. The interest and demand is already being made clear - since launching two days ago Runes already has more developers than BRC-20. That’s a very sizeable footprint already given the popularity of Ordinals, which witnessed more than 350k daily inscriptions in July.
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Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption
Chase U.K. to Block Crypto Payments Citing Fraud, Scams - CoinDesk
Grab Launches Web3 Wallet For Singaporean Users - The Defiant
Cygnetise Secures £2.5MM To Deploy Blockchain For Authorised Signatory Sharing - Tech Funding News
DeFi and Digital Assets
⭐ On-chain Leverage Trading Platform Avantis Labs Raises $4MM Seed Round Led By Pantera Capital - TechCrunch
Prisma Finance Pulls In $30MM With LST-backed mkUSD Stablecoin - The Defiant
Celestia Unveils Airdrop and Launch Plans - The Defiant
MicroStrategy Bought 5,445 Bitcoin for $150M Since August - CoinDesk
Unclaimed ARB Tokens Worth $56MM Returned To DAO - The Defiant
DraftKings' Billionaire-Backed Crypto Analytics Firm CoinScan Raises $6.3MM - CoinDesk
Blockchain Protocols
⭐ Announcing Our $5.15MM Seed Round - Essential
Arbitrum Reboots Odyssey Campaign As Rival Layer 2s Gain Ground - The Defiant
Ethereum Developers Debate New Standard For On-chain Audit Reports - The Defiant
FhenixIO Raises $7.5MM To Bring Fully Homomorphic Encryption (FHE) To Smart Contracts - X
NFTs, DAOs and the Metaverse
ApeCoin Community To Acquire Top NFTs Through New DAO - The Defiant
BAYC x BAPE Unveil Streetwear Collaboration - nft now
Walmart Introduces Pudgy Toys In 2,000 Stores - The Defiant
Milan Fashion Week Showcased NFT-Linked Designer Shoe - nft now
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