Rethinking Crypto in Gaming

Rethinking Crypto in Gaming

Web3 gaming has an extremely bad reputation with gamers and game developers outside of the crypto ecosystem because of some misguided narratives pushed by crypto folks that aren’t themselves gamers or game developers.

Through proper education, we can reframe the conversation around the benefits of Web3 as they can be used to make more fun and engaging games.

Web3 Primitives

There’s five primitives that Web3 has that can benefit game developers and enable new functionality or reduce friction for players. If a game makes use of one or more of these primitives, then it’s a Web3 Enabled Game.


The ability to globally accept payments for digital goods and services with security means that game developers don’t have to mess around with supporting credit card processors or scammers. They can sell their goods and services to anyone in the world, regardless of where the game dev team is based out of.

Digital Assets

Digital Assets are the lowest hanging fruit for a game to implement and call itself “Web3”. They tokenized versions of in-game assets (cosmetics, items, characters, etc) that are minted “on the blockchain”, allowing them to be tradable on third party marketplaces. As discussed below, one of the largest problems by allowing unregulated trading of your in game assets is that it encourages “pay to win”, and cheapens any sense of progression players may strive towards in your game. (Similar to being able to buy game assets in Web2 games).

That being said, there is an incredibly interesting design space for zeitgeist digital assets rather than “forever” digital assets. That is to say, mint your assets during seasons, and decommission them after (like server restarts). This will give pricing of assets to be a bell curve rather than up only but is more inline with how traditional video games think about external markets.

This carries over to NFTs and other digital assets too, if you free yourself from the constraint of long tail assets, and focus on delivering fun during the attention capture you have, you can optimize for bell curves instead of exponential curves.

The challenge is making a game exciting enough that even someone that bought at the top of the bell curve feels like they got value for their purchase because they were able to participate in the zeitgeist at the peak of it, even if the investment didn’t return monetary sums.

Trusted Compute

Having decentralized, trusted, compute is a huge unlock for a lot of applications. In gaming, it can enable trust less wagers and stake based matches seamlessly and with little friction. Games wouldn’t even have to run their own betting systems, they can just act as oracles and submit data about matches to the chain, allowing third parties to interpret that data and build from it as they wish.

By featuring on chain funds escrow, you take away any risk of third party platforms having trusted access to funds and potentially being hacked or rugged.


Most people that mention composability with Web3, mention it as one game event influencing something in another game. This is not the composability I think is killer in web3.

The killer composability narrative here is NFT as IP ownership. Previously, if indie game developer studios wanted to get licenses to brands for co marketing or entitlement distribution to those brands’ fans, they’d have to go through lengthy contract negotiations with the IP owners (if those owners even cared enough to license the IP).

With NFT as IP, the IP owner (the holder of the NFT) can claim entitlements from the IP consumer (indie game dev), without the game dev needing to beg the IP issuer for rights to use that specific asset.

This allows for indie devs to build better distribution pipelines and marketing.


Just like in DeFi, governance in gaming could see the separation of game development teams and game administration teams. Development teams could push new patches, but it’d be up to the admins (chosen through token votes or DAO governance or whatever other mechanism), to decide if those new patches or game modes get put in circulation. You could even do something like futarchy based on if a given patch will make net new players join the game or not, or something similar to incentivize voters.

Aesthetics of Play

These primitives are good mechanics through which game developers can implement web3 stack into their video games, but we still need to touch the aesthetics of why web3 stack is important to gaming. Quick context, this wonderful paper by Robin Hunicke, Marc LeBlanc, and Robert Zubek about their “Formal Approach to Game Design” outlines the MDA framework (Mechanics, Dynamics, and Aesthetics). Mechanics describes the particular components of the game, such as data representation and algorithms. This is how game developers generally look at the games they are building. Aesthetics describes the desirable emotional responses evoked in the player, when they interact with the game.

There’s some nine odd aesthetics that players usually look for when playing video games:

  1. Sense pleasure
    1. These are games with great visuals or music or how it simulates your senses
  2. Fantasy
    1. Ability to step into an experience you don’t have in real life
  3. Narrative
    1. Game as drama, the story that unfolds as you play
  4. Challenge
    1. Game as obstacle course, the fun you get to over come certain obstacles
  5. Fellowship
    1. Working cooperatively to achieve a goal
  6. Competition
    1. Games as expression of dominance
  7. Discovery
    1. Act of uncovering the new
  8. Expression
    1. Human need to express ourselves
  9. Abnegation
    1. The want to “grind” or shut your brain off and do a pass time

The reason these aesthetics are good to study as a game developer is that not all aesthetics of game play naturally lend themselves to crypto style games. For example, solo narrative RPGs might be great for discovery and narrative, but don’t really make use of the social components of web3. There’s no other players to trade with or compete against.

It’s important to understand that if you’re making games for web3 audiences, you do so with specific aesthetics in mind that cater specifically to those audiences (competition and fellowship are big here!).

Harmful Narratives

Play to Earn

”Play to Earn” is an incredibly harmful narrative that industry folks have pushed to reduce games to “work”. In its simplicity, it’s a theory that in games where grinding for resources is ubiquitous, players with disposable incomes might spend money to purchase resources from those with disposable time that have spent the time grinding.

At its face it seems pretty harmless, after all, that’s how free markets work; people specialize in some good or service and trade that speciality for other goods or services they don’t have specialization in.

However, play to earn economic models are rife with problems, everything from insider trading by game developers, to pay to win mechanics that make a large section of the player base mad, to market inflation of in game items.

Firstly, because of the nature of games, game developers have the ultimate mint authority on how new items get brought into the world and what is valuable and what isn’t. For example, a malicious game developer might see that a crafting material, Red Moss, in their game is currently trading at extremely cheap prices. In their upcoming DLC, they might make this ingredient a key material in an ultra powerful spell. Knowing that this DLC is about to come out, the developer and their friends might buy up this ingredient, drop the DLC, then rake in profits from selling the ingredient at higher prices. There’s not really watchdog groups that can monitor small markets like these or even adequate regulation to prevent these things.

Secondly, being able to sell progression means that whoever can spend the most $ on your game effectively can claim all the “win” conditions. What I mean by this is that oftentimes, progression in games is a bragging right (I spent 10000 hours grinding for my fire cape in Runescape, or defeated a huge boss for my Magic Bow in WoW). If anyone can just buy this achievement, this achievement is worth nothing. This gets especially bad when you introduce PvP or any kind of competition to the game.

Finally, by incentivizing grinding of materials by making them worth $, you invite botting into your game, as farmers race to be the most efficient at producing and selling these digital goods. This means your game now has tons of “zombie” players, which makes actual players have a worse time playing. Also, by introducing all these farmers, you inflate the market with these digital goods, bringing down the challenge for players to obtain goods themselves.

This is not to say that digital assets are inherently bad in web3 games, but as we’ll discuss in the primitives section, they require extreme care to how you’re balancing them in your game.

Play to Own

”Play to Own” is another narrative pushed by folks that don’t understand how games work. In short, the narrative states that player ownership of assets is somehow a thing gamers “want” because game developers won’t be able to nerf or modify their assets or control where they can be traded. One of the more famous examples is Vitalik’s origin story of getting into blockchains because Blizzard nerfed (reduced capability of) his warlock character in World of Warcraft and he could do nothing about it.

In reality, game developers need to rebalance the game all the time in order to keep it fun and cohesive with new content. If the game issues you a “Sword of the Moon” that’s +4 atk, and later realizes that too good, and lowers the attack value of all new swords issued to +3, they would disable the use of the older swords, to balance the game. So does having the old sword really matter? You can’t use it in game, it’s balanced out, having an old print of a thing is kind of just meaningless.

Autonomous Worlds

“Autonomous Worlds” is currently the largest web3 narrative on EVM. It’s championed by researchers who believe the future of MMORPG gaming will be these on chain games whose entire logic exists on the ledger. These games will have various layers of third party modules that build and extend functionality to build a sandbox like experience.

Firstly, by championing that Web3 games must be MMO style games only, they significantly limit the kinds of games we can leverage with a web3 tech stack. In reality, web2 MMO game populations vastly pale in comparison to all other types of games, so the MMO market is not the large market they think it is.

Secondly, the layered approach to modules interfacing on top of each other is an incredibly difficult UX challenge for game builders, and it’s unsure why any developer wouldn’t just want to ship a cohesive, vertically integrated piece. The only reason I can think of is to tap into the economies of these “autonomous worlds”, in which case, it’s really disparate games sharing composable economies, which is different from the ideas proposed in the Autonomous Worlds design.

Thirdly, most people that champion autonomous worlds routinely gloss over how to actually tackle the technical challenges of these things on a common ledger, with problems of MEV and transaction ordering, amongst others. For example, if I submit a move to attack someone, they can see the move in the mempool and put in a higher fee tx to move away before my attack hits. This is a really bad UX. This is making the assumption of the best case scenario where the game is running on some app chain where gas prices don’t matter and so cost and scale are already accounted for, otherwise those become issues in this narrative as well.

Finally beyond the technical challenges, these AW folks are often also puritans about putting all logic of the game on chain, looking down on games that make use of web3 primitives without logic on chain. This is just a very harmful ideology.


The large goal for this article is not to dissuade game developers to build games in web3, but rather enlighten web3 developers about the differences in game development and gamers vs traditional web3 audience for web3 products. It’s to reframe the conversation about gaming to one that’s more gamer and game dev friendly, and hopefully brings less antagonistic views from the gamer community about web3.