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By Yves La Rose, Executive Director and Founder of the EOS Network Foundation (ENF)
Blockchain gaming as a movement has been gaining traction over the past few years. The rising popularity of play-to-earn (P2E) games hasn’t just disrupted the traditional gaming industry but also unlocked a wide range of opportunities for the gaming community.
The P2E revolution mobilized an enormous following within a short period. DappRadar, an organization that analyzes trends in decentralized applications (dApps), highlighted that an average of 1.17 million unique active cryptocurrency wallets (UAWs) connected to one or more blockchain games daily during the first quarter of 2022. Underlining this trend, the report noted that gaming accounted for 52% of the total activity happening atop blockchain networks during the period.
While the numbers are inspiring, the skyrocketing popularity of P2E gaming has made it a victim of its own success in terms of accessibility. Due to their popularity, several P2E games require enormous upfront investments, sometimes stretching into the thousands and tens of thousands of dollars, making it prohibitively expensive for many new players to join.
Yes, a handful of truly free-to-play, play-to-earn games are available, but these games come with their own set of problems. For instance, at a certain point, players will need to upgrade their “free” in-game assets (in the form of NFTs) to win against other skilled players; these players might have to shell out a large sum to continue participating, depending on the game’s popularity and the “rarity” of the upgrades.
Either way, these “investments” are significant entry barriers. Additionally, they go against the core ethos of blockchain technology, such as inclusivity and equal opportunity.
There is a solution though. Decentralized autonomous gaming guilds, or DAGG for short, are the potential solution that can maintain the balance by promoting fair and inclusive entry points.
What’s A DAGG?
A DAGG is a novel approach that merges the best attributes of decentralized autonomous organizations (DAOs) and gaming guilds.
The traditional gaming world is ruled by gaming guilds – essentially groups of gamers who play a similar kind of game. However, in this model, the guild is often led by a single individual or a closed group of two to four players. These players are the deciding authorities that often control every aspect of the guild (and its members to an extent). Members generally don’t harbor similar rights as the guild leaders and vice-leaders – something quite familiar with centralized models. Additionally, these guilds live and are given life through the platforms of the game publishers who can turn the switch off at any time, potentially rendering the thousands of sweat equity poured into the guild completely useless.
In contrast, blockchain gaming guilds are community-centric. While traditional guilds are generally limited to a specific game, blockchain gaming guilds are designed to serve as an accessible platform for players to help each other. They aren’t limited to a single P2E game, meaning that if a P2E game fails, the community members will move to something more popular, and more importantly also moving along any valuable assets owned or created by the guild along with them.
Unlike traditional guilds, blockchain gaming guilds work for the greater benefit of the entire community. Players get the chance to play for free (without buying NFTs), and the rewards they earn from winning games are split among the player, the lender, and the guild’s reserve – a win-win scenario for all.
Still, despite their many benefits, most existing blockchain gaming guilds aren’t strictly democratic, which leads to a lack of transparency and fair opportunities. In recent years, several allegations have been made that the “player” selection process is often biased and opaque, with some community members alleging that decision-making is primarily limited to the investors.
This is where DAOs come into the picture. A DAO is an organization run by rules encoded as computer programs called smart contracts. The rules can represent financial transactions, work activities, or anything else that can be programmed. The most important feature of a DAO is that no single person or entity owns it. There is no central management or a board of directors. DAOs are fully decentralized, whereby all members have governance rights and a say in decision-making.
By combining the best attributes of a DAO with the beneficial characteristics of a blockchain gaming guild, a decentralized autonomous gaming guild (DAGG) emerges – a fully decentralized, autonomous, community-centric, profit-sharing, and community-driven ecosystem with no single point of failure.
How Can DAGG’s Help GameFi
As mentioned earlier, the GameFi market is expanding at an unprecedented rate. It has positioned itself as one of the frontiers that can play a crucial role in accelerating the mass adoption of cryptocurrencies and blockchain technology.
However, the GameFi ecosystem needs low entry barriers to achieve peak success. Users should be able to get started with little to no capital, and the complicated blockchain constructs must be simplified. While gaming guilds are frequently criticized for their approach to recruiting players, DAGGs can solve this by enabling autonomous and trustless models to onboard new players.
DAGGs can even address the problem of relying on intermediaries to bridge the gap between investors and players. Instead of having a dedicated group of users to look over the recruitment of new players and facilitating the transactions between lenders and players, gaming guilds can take a page of the DAO playbook and utilize smart contract permissions to support enhanced resource sharing among community members.
From an economic perspective, all DAGG members are entitled to receive a commensurate share of the overall revenue, further attracting more investors to join the DAGG. Players receive their fair share of rewards from their winnings. A portion of the revenue is also deposited in the DAGG’s reserve, which can be used to further invest in new NFTs and in-game items. With time, these new assets will also start generating revenue, thereby benefiting both the guild and its members.
DAGGs can also facilitate fully-functional lending, renting, and borrowing economies between its community members and other communities, making it more enticing (and rewarding) for players.
Unlike existing models, DAGGs can level the playing field by enabling each member, irrespective of their investments, to vote and share their opinion on the future direction and ongoing initiatives that will ultimately benefit the DAGG. This sense of “equality” and “belonging” will remove the friction, allowing more players to join like-minded communities while encouraging more stakeholders to join the broader GameFi ecosystem.
About the author
Yves La Rose is the Executive Director and Founder of the EOS Network Foundation (ENF). A consummate consensus builder within the EOS ecosystem, he lives and breathes EOS, working to ensure the success of the network through the establishment of working groups and making strategic bets and investments throughout the EOS ecosystem.
Yves got his start in blockchain 2010 when he began mining Bitcoin on his laptop, and exploring the potential of decentralized networks. This eventually led to Yves co-founding EOS Nation in 2018 and leading it to become the top rated block producer on the largest and most valuable network using EOSIO, the EOS Mainnet.
For over three years as founder and CEO of EOS Nation, Yves helped navigate the company through a great deal of operational uncertainty. Running network infrastructure, providing community outreach, exploring governance models, and contemplating approaches to public goods funding. His undivided attention was on EOS.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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