GameFi, the blockchain gaming world, has rapidly emerged as a crucial sector in Web3, with a significant portion of users engaged in crypto games. This trend has been magnified in May 2024, as the daily unique active wallets surpassed 3 million, marking a new peak.

The surge in player numbers and game diversity underscores a pressing need for robust gaming infrastructure capable of meeting the intricate demands of modern blockchain games. As a result, developers are proactively creating specialized solutions to bridge the existing gaps, focusing on blockchain platforms tailor-made for gaming to enhance scalability, performance, and user experience.

Introduction

The realm of GameFi, characterized by blockchain-based gaming, has established itself as a fundamental part of Web3, with a substantial portion of the user base now actively participating in crypto games.

The recent spike in activity as of May 2024, with daily unique active wallets exceeding 3 million, indicates a growing interest in and demand for advanced gaming infrastructure capable of accommodating the evolving landscape of blockchain games.

Developers have been making significant strides in crafting bespoke solutions to address these challenges, such as designing blockchains specifically optimized for gaming to unlock enhanced scalability, performance, and user interface.

Why Blockchain Games Migrate to Custom Blockchains?

The inherent scalability limitations of the Ethereum main Layer-1 network became apparent in the early 2010s, shortly after its launch. The infamous congestion crisis triggered by CryptoKitties showcased the network's inefficiencies, with users facing exorbitant fees and prolonged transaction times.

In response, developers began exploring layer-2 solutions – secondary blockchains built on top of the Ethereum network. These layer-2 platforms consolidate multiple transactions into a single batch on Ethereum Layer 2, enhancing scalability while preserving the network's security. This innovation notably reduced transaction costs to nominal levels.

However, with the rapid growth of the industry, layer-2 solutions have started to struggle to keep up with the escalating transaction volume of games, necessitating further enhancements in user experience and reduced gas fees, especially for complex games.

To tackle this challenge, layer-3 solutions have emerged – advanced blockchains built on top of layer-2 networks, inheriting Ethereum's security features while offering additional functionalities not present in layer-2 solutions. Each game on a layer-3 blockchain enjoys tailored optimization and innovative possibilities.

L3 Solutions: Enhancing Performance, Customization, and Governance

Layer-3 solutions introduce a new level of transaction throughput. Recently, the combined throughput of Ethereum layer-2s and layer-3s reached a record high of 246 transactions per second, with a single gaming-focused layer-3 chain, Xai, processing 101 TPS. In contrast, Ethereum's base layer manages only 12-15 transactions per second.

By operating on dedicated blockchains, games eliminate competition for network resources. Although other layer-3 and layer-2 solutions coexist on Ethereum, the development of rollup technology has minimized transaction sizes, enabling exceptional TPS achievements.

Running on specialized blockchains empowers developers to customize parameters like block size, block time, and consensus mechanisms to suit their game's unique requirements. This customization extends to utilizing different computing algorithms, data formats, and executing confidential transactions discreetly from layer-2 networks.

Operating on an independent network grants developers autonomy over their game and its ecosystem, facilitating agile decision-making and prompt implementation of updates without negotiations with network participants, as there are none to contend with.

Game-Specific Chains: Showcase of Innovations

Several game-specific blockchain solutions have garnered attention. Noteworthy among these are layer-2 platforms designed explicitly for GameFi applications, with Ronin emerging as a prominent entity, accommodating 836,000 unique wallets on a daily basis in May. Ronin hosts popular blockchain games like Pixels and Axie Infinity.

The potential of layer-3 solutions transcends transaction volume, offering developers unique avenues for creativity. For instance, Arbitrum Orbit, a platform atop Arbitrum, an Ethereum layer-2 solution, enables users to launch their own layer-3 application chains seamlessly, leveraging enhanced customization.

Implications for Users

The widespread adoption of layer-3 solutions translates to a significant enhancement in user experience. Firstly, users benefit from expedited transaction processing, with Ethereum layer-2s and layer-3s achieving unprecedented throughput, minimizing transaction approval times.

Secondly, Web3 games, often criticized for their intricate user interfaces, have seen significant improvements. The introduction of Account Abstraction in the Ethereum ecosystem has streamlined the gaming experience, making it nearly indistinguishable from traditional Web2 platforms, particularly on layer-3 networks.

PlayBlock, a dedicated layer-3 blockchain solution within the Playnance GameFi ecosystem, emerges as a prime example on Arbitrum Orbit, processing 1.2 million daily transactions. Layer-3 technology enables seamless fee coverage by PlayBlock, ensuring users enjoy fee-free transactions and need not possess a crypto wallet.

Players entering the game are automatically provided with a wallet, addressing accessibility concerns in the competitive landscape by enabling simple top-ups and withdrawals via crypto and card transactions. Account Abstraction eliminates the need for managing seed phrases or multiple transaction signings.

Interoperability represents another significant benefit, offering users the flexibility to transfer in-game assets across titles. The emergence of interoperable gaming ecosystems allows developers to create distinct games within a unified blockchain environment, fostering user engagement and interaction with assets.

Beyond GameFi

The burgeoning demands of the GameFi sector have catalyzed the development of application-specific blockchains, offering unparalleled flexibility, rapid transaction processing, and negligible gas fees. The synergy between evolving technological solutions and industry requirements will propel the game-specific blockchain sector forward, ushering in innovative solutions and advanced GameFi products.

These advancements are poised to drive the rapid expansion of GameFi and facilitate the onboarding of millions of new participants to the Web3 industry.