What’s next for web3 gaming in the age of dynamic NFTs

Lineage Protocol
7 min readMay 31, 2023

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Ever wished you could rock your favorite weapons or skins on different gaming platforms? Well, imagine this: slaying enemies with your epic arsenal in one game, then seamlessly carrying that same firepower into a completely different gaming universe. Sounds like a gamer’s dream come true, right? Buckle up, because we’re about to explore the exciting concept of dynamic NFTs and how they are transforming in-game collectibles into assets with unlimited utility.

Introduction

Previously, gamers were primarily focused on the enjoyment and excitement they derived from games. However, with the advent of NFTs, a broader audience, including those who are not traditional gaming enthusiasts, has started paying attention to the opportunities offered by web3 games.

NFTs have brought about a significant transformation in the gaming industry by providing financial benefits to both creators and consumers, thereby giving rise to two distinct gaming categories: web2 and web3.

Web2 games, such as Fortnite, Call of Duty, and League of Legends, are traditional games without NFT integration. These games often face challenges related to centralization, data collection, lack of ownership, and potential security breaches stemming from their online play and centralized server hosting.

On the other hand, web3 games like Axie Infinity, Decentraland, and Gods Unchained distinguish themselves by leveraging decentralized technologies and blockchain to address the challenges encountered in web2 gaming. These games allow players to truly own their in-game assets, trade them on marketplaces, and earn real value through play-to-earn models.

However, despite these advancements, the web3 gaming industry still grapples with low engagement rates and the imperative to enhance the overall game experience.

In this article, we will explore how Lineage Protocol is leveraging dynamic NFTs to address the challenges faced by the web3 gaming industry.

How NFTs are Used in Gaming

Imagine owning exclusive 1/1 collection guns in Call of Duty or driving custom-designed cars in GTA, all tradeable for real money or other rare assets. These once-fantastical ideas have become reality through the power of NFTs.

NFTs are used to represent in-game assets that can be uniquely owned and traded for monetary gains. Games like Sandbox, and Splinterlands serve as prime examples of this transformative trend.

While this is a progressive shift, it’s important to understand that NFTs can be divided into two categories: static and dynamic.

Static NFTs, like the individual cards in Splinterlands, have predefined characteristics and limited functionality.

While these NFTs hold value and uniqueness, they often lack engagement because they are designed for specific purposes and don’t have the capability to interact with the gaming environment or adapt to different gaming conditions.

On the flip side, dynamic NFTs have revolutionized the web3 gaming experience by introducing interactive and responsive in-game assets. These dynamic NFTs can evolve, respond to player actions, and adapt to changing circumstances, adding a new layer of immersion and excitement to gameplay.

However, managing and updating the metadata associated with dynamic NFTs can be complex and challenging, which is why Lineage Protocol is here to help solve these issues with solutions we will later discuss.

The Rapid growth of Web3 Gaming

Web3 gaming has captivated the attention of gamers worldwide, as more than 50% of US gamers now possess cryptocurrency and 80% express interest in utilizing it for in-game transactions. The projected value of NFTs in 2023 is an impressive $3.5 billion.

Despite facing challenges since 2018, such as Ethereum blockchain congestion caused by high CryptoKitties transaction volumes, the Ronin Network hack, and bear market conditions, the NFT gaming industry has shown remarkable resilience. Both the number of NFT games and the volume of player participation have seen noticeable growth.

Blockchain games accounted for 44% of activity in March and rose to 45% in the first quarter of 2023, surpassing the 42% recorded in the previous quarter of 2022. Polygon has emerged as a favored blockchain platform for gaming, attracting an average of 97,000 daily active users (DAU) in 2022 — a substantial 340% increase from the previous year.

According to a report from DappRadar, Web3 gaming projects secured a substantial investment amount of at least $739 million in the first quarter of 2023, with a staggering $434 million, or 60% of the total, raised in March alone. These figures underscore the growing confidence and support for the thriving Web3 gaming sector.

Benefits of NFTs in Web3 Games

What do NFTs offer gamers? Let’s take a closer look below.

True ownership of digital assets

NFTs offer web3 gamers true ownership of their in-game assets, a concept that is absent in traditional games where players may accumulate vast amounts of assets as they progress through the game, but do not truly own them as they exist on centralized servers and function merely as tools for use within the game.

With NFTs, gamers can enjoy a decentralized economy where their assets can be used and traded as they see fit. This level of ownership opens up new possibilities for creative gameplay and revenue generation through asset trading on blockchain marketplaces.

Asset interoperability

In-game assets in NFT games are not just limited to a specific gaming environment. They can be easily transferred across multiple environments and even optimized for various purposes. Some brands have built APIs for vast in-game assets as NFTs that can be used by any gaming brand, regardless of the blockchain they are built on. This seamless experience allows in-game assets to be more responsive to gamers, providing a more immersive and engaging experience.

Tokenization

In-game digital items are a common feature that allow players to purchase high-end equipment or in-game currencies such as digital gold. However, the use of tokens has transformed this experience by making these items a tangible asset in the gaming economy.

Tokenization has created inclusivity for all gamers, especially those in countries with laws restricting international payments. Fungible tokens offer an alternative for in-game assets to be available to everyone.

The Limitations of Static NFTs in web3 Games

The rarity of static NFTs is determined solely by a programmed dataset and does not consider in-game events. These limitations lead to a lack of user retention, absence of personalized experiences, and inefficient monetization.

Lack of user retention occurs when expensive NFTs experience a significant decline in value during unfavorable market conditions. As a result, players may lose interest and choose to sell their assets in order to minimize their losses.

Also, the absence of personalized experiences means that users are subjected to repetitive gameplay, which can result in boredom and decreased engagement.

Static NFTs are inefficient for monetization compared to dynamic NFTs, which evolve and grow in rarity through usage. This creates an avenue to monetize NFTs based on their unique attributes and utility.

How Lineage Protocol breaks these limitations

Lineage Protocol integrates and optimizes dynamic NFTs to address the challenges posed by static NFTs. Let’s discuss the solutions it offers below.

Multiple data sets: Lineage Protocol’s standout feature is the ability to incorporate multiple data sets into NFTs. This means that in-game assets, like characters, can have additional attributes or elements added to them as separate entities. These entities can exist and evolve independently, allowing for the integration of new skins, weapons, or other features into the game as unique NFTs that can be utilized individually.

Collaborative NFTs: With Lineage Protocol’s solution, creators can set permissions and allow other NFT creators to add new data sets to existing NFTs. This can be done across all chains, enabling cross-chain and cross-project collaborations.

This way, NFTs can exist in multiple ecosystems simultaneously and each data set can evolve independently.

Interoperable NFTs: Lineage Protocol empowers NFTs to seamlessly move between platforms and ecosystems, fostering collaborations and unlocking limitless new experiences. Game developers can leverage NFTs across different blockchains to create immersive experiences that integrate assets from diverse sources.

You can think of this as something similar to the Metaboss MMORPG that supports more than fourteen NFT collections to be used in its gaming environment but not limited to a single chain and a single game.

Metadata Explorer: One exceptional feature of Lineage Protocol is the metadata explorer, which is similar to Etherscan. As dynamic NFTs continuously evolve and acquire new metadata, the explorer diligently tracks the evolution of NFTs right from their genesis, providing players with valuable insights into how these NFTs are utilized across diverse ecosystems.

Secured and Seamless-experience: Lineage Protocol offers a swift evolution of NFTs without compromising on security. By eliminating gas fees and heavy smart contract interactions, it allows for instant and dynamic development of NFTs on any blockchain.

In Conclusion

The current state of NFT utilization faces challenges of low engagement and stagnant experiences, making games unappealing during market downturns. Even with the emergence of dynamic NFTs, game projects lacking innovative implementation risk encountering similar or worse outcomes.

The issues of compromised security, interoperability challenges, smart contract execution, and inadequate gaming experiences can hamper user retention and hinder widespread adoption of web3 technologies.

By addressing the limitations of the current NFT ecosystem, Lineage Protocol not only transforms NFTs into valuable assets but also enhances player experiences, fosters creativity, and propels the future of web3 gaming.

With Lineage Protocol’s solutions, a new era of engaging, immersive, and dynamic gaming experiences is on the horizon.

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Lineage Protocol

Middleware metadata infrastructure enabling limitless NFT interaction and utility.