Gaming, Metaverse, and NFTs: Which Solution is the Right One??

Gaming, Metaverse, and NFTs: Which Solution is the Right One??

By Michael @ CryptoEQ | CryptoEQ | 2 Dec 2021


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Spencer Randall, CryptoEQ: “What we’re most interested in at CryptoEQ is the co-creator space, and the marketplace piece (of the metaverse) because of what that would mean for non-fungible tokens (NFTs), art, and gaming. Additionally, the virtual-worlds piece. That could be huge for the gaming industry and in game assets.” 

Due to their high transaction volume and need for speed, NFTs and, more specifically, gaming, have pushed the blockchain world to new limits. Because blockchains typically optimize for security and decentralization, creating a global game on a blockchain comes with many hurdles, chief among them, scalability. To tackle this problem, creators have typically gone down three paths: more performant yet less decentralized application-specific layer 1 blockchains, sidechains, and layer 2s. 

Layer 1s, while slower, allow developers to work within an existing development environment with a community of potential users already baked in. Sidechains are typically very fast, cheap, and tap into a layer 1s existing network effects and users, but have vastly different security assurances and risks involved. Compared L1, sidechains are more difficult to maintain the network consensus and are most vulnerable via their “bridge” to the mainchain. Layer 2 solutions (L2) are primarily built atop Ethereum to enhance the network’s scalability. They are able to fully leverage Ethereum’s financial infrastructure, network effects, and most importantly, security! Unfortunately, L2s are quite new and immature. Additionally, there are different approaches to Layer 2 solutions (e.g. zk Rollup, Optimistic Rollup, etc.) with their own nuances. 

The beauty is that, ultimately, the market will decide. Rather than centrally-planned from one company, like Meta, builders can use the tools provided by different blockchains with different approaches to gaming. 





Why is Ethereum embracing a “rollup centric” future?

Sharding, discussed earlier, is L1 scaling and still years away from being implemented. It is far more complex and risky when compared to rollups because it is altering the actual base layer. This means the ~$500 billion network is at risk to any bugs or miscalculations. Meanwhile, rollups are available now and possibly even more powerful. Optimistic rollups are a promising extant scaling technology that can be incorporated (and expanded upon) quickly. They offer developers an easy way to migrate their existing dApps to the rollup chain with a reasonable degree of security/scalability tradeoffs. This alleviates Ethereum congestion and high fees that is already here.

Additionally, the Ethereum community realized that rollups can provide immediate value now and only get better once sharding is implemented. This means Ethereum scaling development is hyper focused on rollups (plus some plasma and channels) as a scaling strategy for the near to mid-term future.



Did you miss our first CORE+ report?

Our first CORE+ report covers trends in blockchain gaming and discusses their pros and cons. Online games have seen rapid innovation from enabling and integrating blockchain technology. We dive into many of the main projects currently operating in the gaming space, as well. Read the first CORE+ report below. Check it out here.



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Michael @ CryptoEQ
Michael @ CryptoEQ

I am a Co-Founder and Lead Analyst at CryptoEQ


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