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Despite promises of “decentralization” and “trustless ownership,” the vast majority of crypto games today are, at best, partially decentralized. Web3 is the branding, but in reality, most are Web2+.Game assets live on-chain, yet the game logic, state and storage remain off-chain on centralized servers.

Why? Simply put, it’s not easy to build a fully decentralized game on-chain. Blockchains in 2023 are still far too slow for processing the gargantuan number of transactions that video games require. Lattice CEO Ludens tells Cointelegraph:

“Building a fully on-chain game right now is a little bit like building video games on a computer from the 1980s. We don’t yet have complex on-chain games yet because the blockchains – even Layer 2s – are not powerful enough right now.”

Furthermore, developers have to make important tradeoffs when using blockchain technology to make the game widely accessible to non-crypto audiences.

For instance, Aurory’s developers created a hybrid inventory system called Syncspace, which allows players to leave their assets in Aurory’s custody, but move them into their Solana wallets if they wish.



“Syncspace is Aurory’s UX strategy,” Julien Pellet, Aurory’s infrastructure technical director, tells Magazine. “Not every player wants to handle the complexities of a crypto wallet. We accepted that tradeoff by building Syncspace and allowed some assets to live off-chain in order to bring Aurory to a wider audience of non-crypto-native Web2 players”

But there are passionate communities of degens interested in full-fat, on-chain “autonomous worlds” that are built from the bottom up by the players. One group even modded a game to form a communist collective so everyone “won” the same. Autonomous worlds, as they’re sometimes known, face a lot of hurdles, but given the limitations, the early results are impressive.

Sky Strife from Lattice
Sky Strife from Lattice. (X/Twitter)

How Web3 games started

Web3 games are grappling with a bunch of other issues due to the brief history of the emerging sector. During the last crypto bull cycle, most blockchain games tried to be financial products first and video games second. 

That strategy helped catapult the play-to-earn gaming sector into brief mainstream prominence when token prices were going up. But unfortunately, if the appeal is based on delivering a financial return, then enthusiasm can disappear fast when token prices take a dive. 

Games like Axie Infinity, Pegaxy or Crabada, which once promised spectacular returns for players, have since fallen off a cliff. For Axie, unique active wallets peaked at around 700,000 in November 2021 but now tally more often in the eight to 10,000 range today.

The Metaverse Index (MVI) token, which tracks a collection of major gaming and metaverse tokens, is down 95.6% from its all-time high in November 2021.

MIT
The Metaverse Index token has been on a wild ride. (CoinMarketCap)

In response, Web3 games are now shunning the “play-to-earn” catchphrase that helped propel the sector to prominence, embracing phrases like “play-and-earn” or “play-and-own,” and deemphasizing the profits while focusing on benefits such as the ownership of game assets, or simply how fun the game is.

“At the end of the day, the core focus of games should be leisure and entertainment, not delivering a financial return,” Aurory’s backend tech director Jonathan Tang tells Magazine. 

“As Web3 game developers, our job is to think of how to leverage blockchain technology and what it brings to video gaming, while keeping the game fun as a priority.”

Some believe the emphasis on financial returns has tainted the industry’s image, not least due to an influx of scammers.

Pellet adds: “The last bull run attracted scammers that have multiple elaborate strategies such as cloned websites and fake projects to divert millions of dollars from legit players and teams. With Web2 games, it’s much harder to pull off those types of scams.”

Axie Infinity now has a much more finite number of players
Axie Infinity now has a much more finite number of players. (Axie Infinity)

Enter on-chain games

Encouragingly, however, a smaller community of builders interested in building autonomous worlds are trying to bring on-chain maximalism to blockchain games.

In contrast to their Web2.5 counterparts, fully on-chain games have their assets, and the game logic, state and storage live on-chain. The game state refers to the current status of the gaming world, such as player progression and the items they possess, while game logic simply refers to the rules of the game — how players move, interact, collect and consume. 

Why bother with having it all on-chain? Doing so ensures the game’s state is always immutable and transparent on the blockchain. But most importantly, it opens the door to the same kind of open composability that is possible in DeFi and enables an aggregator like the 1inch Network to build on top of Uniswap or Curve to integrate Synthetix and allow for cross-asset swaps. 

Composability allows anyone to build second-layer rules on top of the game’s original rules. Second-layer rules in fully on-chain games exist in the form of smart contracts on top of the core game developer’s original smart contracts. They are simultaneously experienced by all players in the game, unlike third-party mods in traditional gaming that simply alter the player’s local gaming experience.

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Collective action

Take, for example, the on-chain RPG Dark Forest, built on the Gnosis chain in 2019 by pseudonymous creator Gubsheep. Dark Forest saw groups of players in their own DAO (DFDAO) creating permissionless guild systems through external smart contracts. With the guild system, small players were able to overcome collective action problems in competing against big whale players by pooling their own in-game resources together. As DFDAO put it in its blog:

“Someone needs to beat orden_gg. Orden_gg has won twice in a row and is at the top of the leaderboard as we speak. If we band together for a collective victory, we can defeat Dark Forest’s unofficial raid boss together.”

Dark Forest is a decentralized MMO space conquest strategy game
Dark Forest is a decentralized MMO space conquest strategy game. (Medium)

DFDAO co-founder toe knee told Magazine: “The Astral Colossus (guild) was a mini game ‘above’ the core DF contracts, but in the eyes of the DF core contract, it was just another player. Instead of being an EOA account like everyone else, it was a smart contract with custom logic that shaped how it would behave differently. This contract was non-upgradeable and verified so players could confirm for themselves that we couldn’t change the rules and we couldn’t keep their planets after they donated.”

Dark Forest players have also created their own in-game marketplaces or even forked the game entirely onto a different chain/layer 2 — Gnosis Optimism. The new game – Dark Forest Arena – introduced new gaming modes previously unavailable.

Dark Forest
Dark Forest Arena.

Communist take over

Or take another on-chain game, OPCraft, a Minecraft-inspired experiment built by the Lattice team on Optimism. Weeks into the launch of the game, one player, calling himself SupremeLeaderOP, created a “communist society” where any player that opted into the guild would give up all their resources and share them with every other player in the society. 

These rules were not a social promise between players. They were binding and tied to an on-chain smart contract. SupremeLeaderOP could not, even if he so desired, rescind his promises to players or bend the rules of his communist guild. Some players saw the guild as a wacky fun experiment and immediately swore allegiance to the communist Republic, in the process, giving up all their in-game resources in return for access to the guild’s collective treasury. As documented on the Lattice blog: 

“Once a player had become a comrade, they were able to — through smart contracts that the Supreme Leader had deployed — mine material for the government treasury and build using treasury material on top of government owned land! The Republic even had a ‘social credit’ system to prevent freeloading comrades from spending more material from the treasury than they have contributed. Free loading comrades were not allowed to build anymore until they had ‘repaired their social credit’ through contributing their labor.”

In fully on-chain games, players can implement innovative changes rather than having to wait for a core developer to introduce the updates through a centralized patch. It’s a level of bottom-up spontaneous creative expression that extends far beyond how we traditionally think of video gaming, but in the Web2 world, experimenters tinkering around on custom game mods eventually spawned billion-dollar game franchises such as Dota and Counter-Strike. Dota was first created permissionlessly as a mod on Blizzard’s Warcraft 3 game, while Counter-Strike was birthed from a mod on Valve’s Half-Life game. 

The on-chain gaming space is nascent, and builders in this space still refer to fully on-chain games very differently. The popular autonomous worlds label was coined by Lattice Labs, but other builders in the on-chain space have referred to the concept as eternal games, infinite games or on-chain realities.

Although the terminology varies, the common denominator underlying these games is hard permanence on the blockchain. Just as smart contracts and tokens will forever exist on-chain, fully on-chain games remain fully uncensorable and alive long after a gaming studio abandons the game.

The tradeoff? Most on-chain crypto games currently resemble turn-based board games with simple game loops like Space Invaders and Pac-Man in the early era of video games.

Limitations, limitations, limitations

In creating the on-chain racing game Rhauscau, creator Stokarz tells Magazine he had to make a bunch of necessary tradeoffs in game design due to cost limitations.

“The reason why most on-chain games follow a traditional board game design with minimal game logic is because executing it all on-chain is inexpensive. On the smart contract level, it’s a one-dimensional play with agents simply changing the positioning of the play.”

Although Rhauscau is deployed on the layer-2 Arbitrum Nova, which boasts a throughput speed far higher than Ethereum mainnet, the game is still limited to simple game loops that last five minutes tops.

“The first tradeoff with Rhauscau’s game design was that it had to be centered around one simple game loop. Too complex games mean more transaction speeds, which would make it too costly for users to pay for it. It’s similar to early mobile games like Cut the Rope,” Stokarz added.

Partially decentralized Web2.5 games don’t face the same trade-offs as on-chain games because the only crypto layer within their games is assets in the form of nonfungible tokens. 

But they make an important sacrifice in another regard: the game’s open composability.

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Future of on-chain games

No one denies fully on-chain games face an uphill battle, and scalability isn’t the only problem.

Ludens emphasizes that the immature state of on-chain games is also due to game designers lacking a set of coherent guiding game design principles for building on blockchain ledgers. “Game designers should think harder about how to harvest the full affordances of a blockchain ledger in their game design.”

But blockchain and software infrastructure is an issue.

“On old video games, we saw simplistic text adventure games first. When computers got faster, then came FPS games like Doom. With higher computational power on the blockchain, it will further increase what we can do with game design.”

Games started as text based RPGs and moved on to first person shooters like Doom 1993
Games started as text-based RPGs and moved on to first-person shooters like Doom 1993. (Doom/Britannica)

“Getting chain infrastructure to a higher throughput would obviously help scale on-chain games greatly. It would allow sharding of the game’s state and executing it together on multiple chains at the same time.”

On the software side of things, he wonders what game engines like Lattice’s MUD (multi-user-dungeon) will look like years down the road. “Can MUD write powerful enough applications as we continue to push it?”

Today’s video game market is dominated by the Unreal and Unity game engines. Commercial game engines like Unreal only emerged in 1998 after decades of experimentation. Today, they serve as the go-to software framework for game developers to create a game efficiently with much less technical complexity.

MUD aims to achieve something similar for blockchain game developers. The software stack streamlines the task of building an EVM app with various development tools like an on-chain database.

On-chain and on ZK-rollups

Ethereum’s roadmap is built around scaling via ZK-rollups, and there’s a big opportunity on the various layer 2s for game designers to take advantage of faster and cheaper transactions. A small collection of builders on Starknet believe that the layer-2’s zero-knowledge proof native architecture is much better poised to scale a fully on-chain game.

Cartridge is building its own game engine called Dojo, among other developer tools for Starknet game developers. Its founder, Tarrance van As, believes that Starknet is the only one with a tractable path to scalability for hundreds of thousands of users eventually.

“With Dojo, game developers get a baseline capability of the framework because everything is provable all the time,” he tells Magazine.

“In the future, your game is not even going to be a layer 2 but a layer 3 or layer 4 on top of Starknet,” he says, referring to bespoke blockchain environments designed for specific types of applications that are built in another layer on top of the layer 2. But he adds ZK-proofs can even be generated on the same local PC running the gameplay.

“With ZK-proofs, you can even have logic computed on the client itself. We may even be able to run the game on our local device and simply provide the proofs that it was done correctly thanks to the mathematical integrity of ZK-tech.”

Van As sees a world of opportunity opening up and believes that in years to come, on-chain games will resemble blockchains a lot more than traditional AAA games. 

“On-chain games are free from the restrictions of traditional game publishers such as a financial runway, development cycle and its closed nature. They resemble Ethereum much more in the sense that it evolved from an emergent, bottom-up culture.”

Donovan Choy

Donovan Choy

Based in Singapore, Donovan Choy previously wrote about crypto for the Bankless newsletter. He published his first book ‘Liberalism Unveiled’ in 2021, an analysis of Singapore’s political economy. He enjoys satire, spaghetti Westerns and the Wu-Tang Clan.

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PM urged to take three key steps ahead of emergency cabinet meeting on Gaza

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PM urged to take three key steps ahead of emergency cabinet meeting on Gaza

British Palestinians have called on Sir Keir Starmer to take “immediate, concrete” steps on Gaza instead of “focusing on a symbolic gesture” of recognising it as a state ahead of an emergency cabinet meeting.

The prime minister has recalled his cabinet ministers from parliamentary recess for a meeting at 2pm, when they will discuss what the UK’s next steps should be, after Sir Keir held meetings with Donald Trump yesterday.

Ahead of the cabinet meeting, the British Palestinian Committee (BPC), which represents the experiences of Palestinians in the UK, has sent Sir Keir a letter urging him to take actions they say could make a real difference to people in Gaza.

Gaza latest: ‘Worse-case scenario of famine’ unfolding

The war has now been going on for 21 months after it was sparked by Hamas militants killing 1,200 Israelis and taking 250 hostages on 7 October 2023. The militant group still holds 50 hostages, of whom only 20 are believed to be alive.

The BPC said recognising Palestine as a state is now “symbolic” as it “will not end the genocide and must not be used to deflect from accountability”.

Sir Keir has been under pressure from his own MPs and other UK political parties, notably since France said it will recognise Palestine as a state, but has so far resisted – saying recognition needs to be part of a wider peace plan.

He has so far refused to say whether “genocide” is taking place in Gaza – a claim Israel has vehemently denied.

Israel has paused fighting in three areas for another 10 hours today to help aid distribution, the third day it has done so amid mounting international condemnation of the scenes of hunger unfolding in Gaza.

David Mencer, a spokesperson for the Israeli government, said: “There is no intent, (which is) key for the charge of genocide… it simply doesn’t make sense for a country to send in 1.9 million tonnes of aid, most of that being food, if there is an intent of genocide.”

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Sky News on board Gaza aid plane

The BPC, an independent group, said the government has “not only a political and moral obligation, but a legal obligation” to take three steps.

They are:

• Preventing and punishing Israel’s “genocide” in Gaza and to end “all complicity in it”

• Apply “immediate and comprehensive sanctions on Israel”

• Safeguard the rights to freedom of expression and assembly in the UK

More specifically, the group has called on Sir Keir to end “all forms of military collaboration, urgently review all public contracts to ensure they are not aiding unlawful occupation or genocidal acts, and support universal jurisdiction mandates”.

Read more:
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The view from a plane dropping aid into Gaza

Palestinians wait to receive food from a charity kitchen, amid a hunger crisis, in Gaza City, July 28, 2025. REUTERS/Khamis Al-Rifi
Image:
The BPC said the UK could take immediate steps to help starving Gazans. Pic: Reuters

The group said these steps would help towards ending the starvation crisis in Gaza, which it said had been made possible “due to the impunity granted to” Israel and “compounded by the active military, economic and diplomatic support from states such as the UK”.

The group also accused the UK government of introducing “draconian legislation to limit the rights” of British citizens campaigning to end the atrocities “and British complicity in those atrocities” – in reference to Palestine Action being designated as a terrorist organisation.

‘Immediate steps’ Britain can take

Dr Sara Husseini, director of the BPC, said: “We wrote to the prime minister to remind the UK cabinet of their legal obligations towards the Palestinian people.”

She said there are a “number of immediate steps” the British government “can and should be taking”, as outlined in the letter.

Dr Husseini said 147 countries have already recognised Palestine as a state, and instead of “focusing on a symbolic gesture” it is essential the UK severs diplomatic ties with Israel, institutes a full arms embargo, applies comprehensive sanctions and cuts trade.

“Anything short of this amounts to complicity,” she added.

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Has Trump broken from Netanyahu over Gaza?

Ahead of the cabinet meeting, senior minister Peter Kyle told Sky News the PM had decided to call an emergency meeting “to discuss all of the actions that Britain can and should be taking at a time like this”.

He said recognising Palestine as a state is a manifesto commitment but the “real priority” right now is to try to get aid into Gaza.

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How Corbyn’s new party is preparing for battle – and where insiders think they could win

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How Corbyn's new party is preparing for battle - and where insiders think they could win

Jeremy Corbyn and Zarah Sultana’s new party will offer “unapologetically socialist” policies, with the pair to embark on a nationwide tour to listen to ideas, Sky News understands.

The former Labour MPs are aiming to hold the party’s first conference in the autumn to help decide what it stands for and models of leadership.

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Ms Sultana told Sky News its policies will include “democratic public ownership of key industries, universal free childcare, rent controls, free public transport and much more”.

Mr Corbyn, the ex-Labour leader, added there is “huge appetite for the policies that are needed to fix society”, including “wealth redistribution, housing justice, and a foreign policy based on peace and human rights”.

The autumn conference will be for paid members rather than those who have simply signed up to the party’s website.

How to translate signups into membership, and exactly how members will have their say on policies, will be discussed as part of a “founding process” over the next few months.

This will involve local engagement with communities up and down the country, including rallies and meetings fronted by Mr Corbyn and Ms Sultana, as well as “other public figures”, a source close to the party told Sky News.

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Corbyn’s new party shakes the left

Election goals

While there are many details to be fleshed out, including the name, the pair’s “primary aim” is to make gains at the local elections next May, it is understood.

Mr Corbyn and Ms Sultana announced their new venture last Thursday, and claim more than half a million people have signed up, but “Your Party” is only an interim name. Members will decide the official one in due course.

Insiders have claimed they are attracting support from a wide geographical area, the strongest bases being in London, the North West, and Yorkshire and the Humber.

It remains to be seen whether those who have expressed an interest will go on to join the party.

However, there is a risk it could eat into Labour’s vote share by attracting those on the left unhappy with the direction of the Starmer government, particularly on issues like Gaza and welfare.

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‘Worst-case’ famine warning in Gaza

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Corbyn open to ideas on new party name

Mr Corbyn led the Labour Party from 2015 to 2020 before being suspended following a row over a report into antisemitism. He retained his seat in Islington North after standing in last year’s general election as an independent.

Ms Sultana was suspended as a Labour MP last year after rebelling against the government over the two-child benefit cap, and announced she was quitting the party to launch a new one with Mr Corbyn earlier this month.

Polling by More in Common before the new outfit was officially announced suggested it could take 10% of the vote at a general election, mainly from Labour and the Greens.

This has raised the prospect of Mr Corbyn striking a deal with the Greens, where both sides would agree to stand down in seats where the other has a stronger chance of winning

Could Farage benefit?

The Islington North MP has suggested he is open to collaboration with progressive parties, but it is understood that electoral strategy will be informed by conference. It is also not clear if the Greens would agree to any such pact.

Some MPs are worried the split in the left vote could make it easier for Nigel Farage, already ahead in the polls, to enter Downing Street.

Patrick Hurley, the Labour MP for Southport, told Sky News: “The thing I’m worried about with regard to the unnamed but already chaotic Corbyn Party is that they let Reform through the middle by taking votes off a progressive centre left party like Labour.

“They won’t be a threat electorally, but they may well let the radical right wing into power by splitting the vote.”

However, Labour was dismissive of the threat the party posed, with a source saying: “The electorate has twice given its verdict on a Jeremy Corbyn-led party.”

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Corporations have acquired 1% of Ether supply: Standard Chartered

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Corporations have acquired 1% of Ether supply: Standard Chartered

Corporations have acquired 1% of Ether supply: Standard Chartered

Corporations have accumulated 1% of all Ether since June, with Standard Chartered forecasting 10% ownership as institutional appetite for ETH continues to grow.

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