AI & Machine Learning

Web3 Development

NFT & Metaverse

Blockchain Development

Blockchain Solutions

Products

Get in Touch
arrow-left Back to ‘Today at Nextrope Blog’

How to create NFT games? – A practical guide

Maciej Zieliński

17 May 2022
How to create NFT games? – A practical guide
Table of Contents

NFT games are entertainment products that are based on blockchain technology and tokens. More and more entities use NFT to monetize their ventures in the gaming industry. This allows players to create, sell, or buy tokens of any game-related object while providing financial support to the game's developer. How does it work in practice? How to create an NFT game? We're writing about it below!

Who profits from NFT games?

With NFT, creators can tokenize and sell skins, artifacts, armor, weapons, etc. in a given form. NFT can be used not only by developers, but also by players. For example, they have the ability to sell NFT in-game to other collectors and players, thus earning money and cryptocurrency.

How to start making an NFT game?

In order to design and utilize NFT in-game, developers create smart contacts that automate the use of tokens. An example of this is the most popular blockchain game – CryptoKitties, where several smart contracts create a structure for the entire game! As for smart contracts, a good example is GeneScience, which defines a random mechanic in order to generate new cats. In addition to smart contracts, there are other things to consider when creating an NFT game.

NFT GAMES

NFT game model

There are currently two most popular forms of NFT games:

  1. P2E (play to earn) - gameplay will only start when you purchase the NFT token. This does not change the fact that in the future there will be an opportunity to treat the game as a potential investment.
  2. F2P (free to play) - it's a unique form of entertainment that cuts down on initial costs. You can play it immediately, free of charge. When you create a game in this respect, you may find that potential revenue is lower than P2E. Such games do not have NFT in useable form. Older players teach younger players in order to participate in later profits.

NFT game genre

Select the genre of game that will be targeted at potential users. Keep in mind that an NFT game is very similar to a classic game. The difference will only be the monetization of your product. A number of genres are therefore available for selection:

  • adventure games,
  • RPG’s,
  • story driven games,
  • card games,
  • strategy games,
  • war games and many more.

After choosing a genre, analyze the competition. It may be worthwhile to check out similar games using blockchain technology. Don't copy games that have not been successful. Some choose a solution that takes advantage of the best and most interesting features from the competition’s projects. All information regarding the game should be written down and recorded in the game's design document. This will help you avoid the issue of your team not understanding your vision of the project. Designing proper and transparent stages of game development, including levels, conditions of promotion and monetization, will help to avoid misunderstandings. When you achieve this, move on to designing the visuals.

Application availability

Applications built on blockchain technology have their own dApps name, meaning they are decentralized. This is important because the main code and data of the decentralized application are stored in a peer-to-peer blockchain. This is the opposite of a client-server application where information resides on servers that are easy to hack. Emphasis should be placed on decentralization, as every cryptocurrency is decentralized. In addition, decentralized applications are open source.

Mobile app vs Web browser

Another element to consider is how your customers will use the game. Reactions can be based on a web browser or a mobile application. Both forms are attractive for NFT implementation. The web application is widespread and can be started from almost any device. The mobile app will certainly work better on smartphones and offers many unique features.

Mobile applications – division

Mobile applications can be divided into native and cross-platform forms.

  1. Native form – applications are created for a specific operating system and provide access to a variety of smartphone features: camera, contact list, GPS, and more.
  2. Cross-platform form – Cross-platform options will not have access to smartphone features, but they are much easier, faster, and less expensive to create. This is because you need only one solution that will work on all operating systems.

Whichever feature you choose, consider whether your game can be used on a smartphone. Moreover, AppStore has a number of requirements and restrictions for gaming apps. There is also the hybrid application, which is both a mobile and web application.

Selection of technologies for NFT games

Encorporating NFT into video games is best done using open source. One of the most popular ecosystems for making games with NFT is the dApp "Truffle Suite". It is the best place to develop smart contracts. Truffle Suite is used by entities such as Microsoft, Amazon or VMWare. This solution provides blockchain developers with a standard and schematic environment to test potential smart contracts in gaming. As for the best blockchain to build an NFT game on – that would be Ethereum. It's the most popular platform for creating and running NFT – also in gaming, where it enjoys the greatest popularity.

This image has an empty alt attribute; its file name is gaming-4970616_1920-1-1024x683.jpg

Truffle Suite is comprised of three different elements:

  • Truffle – is an environment for developers who use Ethereum as a basis for creating NFT and implementing and using smart contracts.
  • Ganache – is a tool that allows you to configure the local Ethereum blockchain. This ensures that decentralized applications can be deployed, developed and tested in a secure location.
  • Drizzle – is a set of front-end libraries designed to develop and create a transparent interface.

Front-end

This element can be created using Javascript. You will need the right Framework, which will guarantee a set of specific software solutions. This will give us the design, logic and basic functions of the game. In addition, some tasks allow the creator of an NFT game to add their own code to a package created in a Framework. The Front-end can be hosted on Netlify, one of the best platforms for web creation. It's a great solution for small groups making NFT games that don't have the ability to build an infrastructure for their plans by themselves.

Wallet and payments

Let us remember that ordinary money is handled differently than cryptocurrencies. A cryptocurrency is stored in a virtual wallet based on blockchain technology. The crypto portfolio is a space that allows you to store your crypto or NFT without third party intervention. Let us remember that when creating NFT games, we need to guarantee a high level of security for wallets. The best way to choose the appropriate method of storing capital is to go to the web page of the cryptocurrency that interests us, and then check the recommended wallets for storing it.

Each wallet must meet the following requirements:

  • needs to have private and public keys;
  • needs to have several levels of security.

If these conditions are met cumulatively, then everything is done properly.

Smart contracts

Thanks to blockchain technology smart contracts, we have access to programs that run based on fulfilling certain contract terms. Users who want to access the NFT as part of a computer game must follow this procedure:

  1. The Frontend receives the user address from the crypto portfolio.
  2. The Frontend sends the user address to the smart contract.
  3. The smart contract provides the user with a NFT address.

The creation of smart contracts begins by checking the official Ethereum blockchain library, Web3. This allows us to abstract from the internal mechanics of Ethereum and work with networks and intelligent contracts as if they were normal JavaScript objects.

Testing an NFT game

To test an NFT game, it's a good idea to use a particular blockchain for that purpose. For example, Rinkeby. There are several ways to test NFT games, which are as follows:

  • Functionality testing – this is a test to check the overall performance of the game, data transfer, block size etc.
  • Security testing – this is a mandatory test that helps us determine if the blockchain system is in danger of being hacked.
  • Interface testing – when creating an NFT game, keep in mind that you need to make sure that the workflow and functionality work properly.
  • Integration testing – this is the bridge between different programming components.
  • API testing – This checks the software components' communication with the external API, so we can be sure that requests and responses are processed automatically in the proper way.

Summary

Seeing the above requirements you should be aware that creating an NFT game requires a lot of knowledge and dedication. You can create it in various forms. Make sure not to make the gameplay entirely based on monetization. In addition, consider whether the NFT are attractive enough (and the game itself as well) to incentivize players to invest in NFT for the so-called “skins” or other elements of a virtual character. Whether you choose a browser, mobile or hybrid model, it's important to keep in mind that NFT can generate high revenue, but it can also leave a negative impression on players if it is purely finance-focused.

Tagi

Most viewed

Never miss a story

Stay updated about Nextrope news as it happens.

You are subscribed

Aethir Tokenomics – Case Study

Kajetan Olas

22 Nov 2024
Aethir Tokenomics – Case Study

Authors of the contents are not affiliated to the reviewed project in any way and none of the information presented should be taken as financial advice.

In this article we analyze tokenomics of Aethir - a project providing on-demand cloud compute resources for the AI, Gaming, and virtualized compute sectors.
Aethir aims to aggregate enterprise-grade GPUs from multiple providers into a DePIN (Decentralized Physical Infrastructure Network). Its competitive edge comes from utlizing the GPUs for very specific use-cases, such as low-latency rendering for online games.
Due to decentralized nature of its infrastructure Aethir can meet the demands of online-gaming in any region. This is especially important for some gamer-abundant regions in Asia with underdeveloped cloud infrastructure that causes high latency ("lags").
We will analyze Aethir's tokenomics, give our opinion on what was done well, and provide specific recommendations on how to improve it.

Evaluation Summary

Aethir Tokenomics Structure

The total supply of ATH tokens is capped at 42 billion ATH. This fixed cap provides a predictable supply environment, and the complete emissions schedule is listed here. As of November 2024 there are approximately 5.2 Billion ATH in circulation. In a year from now (November 2025), the circulating supply will almost triple, and will amount to approximately 15 Billion ATH. By November 2028, today's circulating supply will be diluted by around 86%.

From an investor standpoint the rational decision would be to stake their tokens and hope for rewards that will balance the inflation. Currently the estimated APR for 3-year staking is 195% and for 4-year staking APR is 261%. The rewards are paid out weekly. Furthermore, stakers can expect to get additional rewards from partnered AI projects.

Staking Incentives

Rewards are calculated based on the staking duration and staked amount. These factors are equally important and they linearly influence weekly rewards. This means that someone who stakes 100 ATH for 2 weeks will have the same weekly rewards as someone who stakes 200 ATH for 1 week. This mechanism greatly emphasizes long-term holding. That's because holding a token makes sense only if you go for long-term staking. E.g. a whale staking $200k with 1 week lockup. will have the same weekly rewards as person staking $1k with 4 year lockup. Furthermore the ATH staking rewards are fixed and divided among stakers. Therefore Increase of user base is likely to come with decrease in rewards.
We believe the main weak-point of Aethirs staking is the lack of equivalency between rewards paid out to the users and value generated for the protocol as a result of staking.

Token Distribution

The token distribution of $ATH is well designed and comes with long vesting time-frames. 18-month cliff and 36-moths subsequent linear vesting is applied to team's allocation. This is higher than industry standard and is a sign of long-term commitment.

  • Checkers and Compute Providers: 50%
  • Ecosystem: 15%
  • Team: 12.5%
  • Investors: 11.5%
  • Airdrop: 6%
  • Advisors: 5%

Aethir's airdrop is divided into 3 phases to ensure that only loyal users get rewarded. This mechanism is very-well thought and we rate it highly. It fosters high community engagement within the first months of the project and sets the ground for potentially giving more-control to the DAO.

Governance and Community-Led Development

Aethir’s governance model promotes community-led decision-making in a very practical way. Instead of rushing with creation of a DAO for PR and marketing purposes Aethir is trying to make it the right way. They support projects building on their infrastructure and regularly share updates with their community in the most professional manner.

We believe Aethir would benefit from implementing reputation boosted voting. An example of such system is described here. The core assumption is to abandon the simplistic: 1 token = 1 vote and go towards: Votes = tokens * reputation_based_multiplication_factor.

In the attached example, reputation_based_multiplication_factor rises exponentially with the number of standard deviations above norm, with regard to user's rating. For compute compute providers at Aethir, user's rating could be replaced by provider's uptime.

Perspectives for the future

While it's important to analyze aspects such as supply-side tokenomics, or governance, we must keep in mind that 95% of project's success depends on demand-side. In this regard the outlook for Aethir may be very bright. The project declares $36M annual reccuring revenue. Revenue like this is very rare in the web3 space. Many projects are not able to generate any revenue after succesfull ICO event, due to lack fo product-market-fit.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

Tagi

Quadratic Voting in Web3

Kajetan Olas

04 Dec 2024
Quadratic Voting in Web3

Decentralized systems are reshaping how we interact, conduct transactions, and govern online communities. As Web3 continues to advance, the necessity for effective and fair voting mechanisms becomes apparent. Traditional voting systems, such as the one-token-one-vote model, often fall short in capturing the intensity of individual preferences, which can result in centralization. Quadratic Voting (QV) addresses this challenge by enabling individuals to express not only their choices but also the strength of their preferences.

Table of Contents

In QV, voters are allocated a budget of credits that they can spend to cast votes on various issues. The cost of casting multiple votes on a single issue increases quadratically, meaning that each additional vote costs more than the last. This system allows for a more precise expression of preferences, as individuals can invest more heavily in issues they care deeply about while conserving credits on matters of lesser importance.

Understanding Quadratic Voting

Quadratic Voting (QV) is a voting system designed to capture not only the choices of individuals but also the strength of their preferences. In most DAO voting mechanisms, each person typically has one vote per token, which limits the ability to express how strongly they feel about a particular matter. Furthermore, QV limits the power of whales and founding team who typically have large token allocations. These problems are adressed by making the cost of each additional vote increase quadratically.

In QV, each voter is given a budget of credits or tokens that they can spend to cast votes on various issues. The key principle is that the cost to cast n votes on a single issue is proportional to the square of n. This quadratic cost function ensures that while voters can express stronger preferences, doing so requires a disproportionately higher expenditure of their voting credits. This mechanism discourages voters from concentrating all their influence on a single issue unless they feel very strongly about it. In the context of DAOs, it means that large holders will have a hard-time pushing through with a proposal if they'll try to do it on their own.

Practical Example

Consider a voter who has been allocated 25 voting credits to spend on several proposals. The voter has varying degrees of interest in three proposals: Proposal A, Proposal B, and Proposal C.

  • Proposal A: High interest.
  • Proposal B: Moderate interest.
  • Proposal C: Low interest.

The voter might allocate their credits as follows:

Proposal A:

  • Votes cast: 3
  • Cost: 9 delegated tokens

Proposal B:

  • Votes cast: 2
  • Cost: 4 delegated tokens

Proposal C:

  • Votes cast: 1
  • Cost: 1 delegated token

Total delegated tokens: 14
Remaining tokens: 11

With the remaining tokens, the voter can choose to allocate additional votes to the proposals based on their preferences or save for future proposals. If they feel particularly strong about Proposal A, they might decide to cast one more vote:

Additional vote on Proposal A:

  • New total votes: 4
  • New cost: 16 delegated tokens
  • Additional cost: 16−9 = 7 delegated tokens

Updated total delegated tokens: 14+7 = 21

Updated remaining tokens: 25−21 = 425 - 21 = 4

This additional vote on Proposal A costs 7 credits, significantly more than the previous vote, illustrating how the quadratic cost discourages excessive influence on a single issue without strong conviction.

Benefits of Implementing Quadratic Voting

Key Characteristics of the Quadratic Cost Function

  • Marginal Cost Increases Linearly: The marginal cost of each additional vote increases linearly. The cost difference between casting n and n−1 votes is 2n−1.
  • Total Cost Increases Quadratically: The total cost to cast multiple votes rises steeply, discouraging voters from concentrating too many votes on a single issue without significant reason.
  • Promotes Egalitarian Voting: Small voters are encouraged to participate, because relatively they have a much higher impact.

Advantages Over Traditional Voting Systems

Quadratic Voting offers several benefits compared to traditional one-person-one-vote systems:

  • Captures Preference Intensity: By allowing voters to express how strongly they feel about an issue, QV leads to outcomes that better reflect the collective welfare.
  • Reduces Majority Domination: The quadratic cost makes it costly for majority groups to overpower minority interests on every issue.
  • Encourages Honest Voting: Voters are incentivized to allocate votes in proportion to their true preferences, reducing manipulation.

By understanding the foundation of Quadratic Voting, stakeholders in Web3 communities can appreciate how this system supports more representative governance.

Conclusion

Quadratic voting is a novel voting system that may be used within DAOs to foster decentralization. The key idea is to make the cost of voting on a certain issue increase quadratically. The leading player that makes use of this mechanism is Optimism. If you're pondering about the design of your DAO, we highly recommend taking a look at their research on quadratic funding.

If you're looking to create a robust governance model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure that your DAO will stand out as a beacon of innovation and resilience in the long term.

Tagi