The real advantages of the Blockchain are here. They are ignored


Roham Gharegozlou is the CEO of Dapper Labs, the company behind the viral blockchain game CryptoKitties. Brian Flynn works in the Dapper Labs product team.

Introducing as many people as possible to the benefits of decentralization is a cause that almost everyone in this sector shares. The problem is that, in making the technology more accessible, many developers are sacrificing the advantages of decentralization for reasons of convenience.

A decentralized product should keep three key promises for its customers:

  • Resistant to censorship: your things are safe and cannot be tampered with
  • Self-government: you own and control your assets, identities and data
  • Open ecosystems: all get value from new contributions

Dapper Labs has some horses in this race: we started with CryptoKitties, still the most popular blockchain game by volume of transactions, and we recently announced NBA Top Shot, a new blockchain-based ecosystem developed in collaboration with NBA and NBPA. We also sent Dapper, one of the first "smart wallets" for ethereum.

The value of resistance to censorship and the customers who own their data are relatively well understood. Less attention is paid to the other great advantage of cryptography that compromises centralized approaches: open ecosystems.

Open ecosystems are the cornerstone

Open ecosystems allow anyone to contribute to someone else's platform or work on the platform and receive rewards for their work. On ethereum, we are seeing open ecosystems appear in the realm of decentralized finance (DeFi).

The MakerDAO DAI, an algorithmic stablecoin, is used by dapps like Dharma, Compound Finance and many others. These decentralized loan applications provide competitive rates by using Dai to attract borrowers, while allowing lenders to make money from the assets they already own.

Compound Finance and Uniswap make MakerDAO stronger if combined together rather than existing individually. These open ecosystems are even on multiple levels, using smart contracts from more primitives to create endless possibilities. For example, Opyn is a non-confidential trading platform built on MakerDAO's Ethereum, Compound, Uniswap and DAI.

Without Compound or Uniswap, Opyn would not be able to exist.

"The combination of Primitives will allow the creation of protocols and systems that were not possible before their existence. These emerging systems will be greater than all the individual primitives alone." – The Emergence of Cryptoeconomic Primitives by Jacob Horne

Transforming creators, users and developers into stakeholders

In an open ecosystem, users, developers and original creators can gain value.

Users have more choice (because anyone can add functionality to anything) and in the end users decide what is important. The speed of software innovation increases because developers can use the other code as lego blocks.

Developers who rely on existing code, in many ways, market the product of the original creator for them, further increasing the scope of the brand. In return, developers draw on an existing and qualified user base.

Consequently, trust is created through a cyclical relationship between all the participating parties.

"I feel like we're in a unique position where platform users have an incentive to work hard to see the platform succeed and move mountains if given the chance."

– kabciane, a KittyVerse developer who creates numerous utility contracts

In the context of MakerDAO DAI, every developer who uses DAI in their dapp is preaching what MakerDAO has done for the decentralized financial ecosystem.

Why are there no more blockchain games?

Open ecosystems have significant long-term advantages, but as Brady Dale of CoinDesk recently pointed out, they are difficult to create in games. Using sidechain or centralizing the data that matters most to third-party creators, dapp developers are inhibiting potential open ecosystems related to their experiences.

Developers are building full-stack games, with most of the existing off-chain data, resulting in less modularity, less shared data and actually closed ecosystems.

One of the main design decisions for CryptoKitties was to calculate and store the genes on the ethereum blockchain. It would have been much easier not to do it, and the resulting experience would have been more accessible – but many of the things that make CryptoKitties interesting or valuable to date would have been possible.

Developers need to access these genes to create third-party games like KotoWars and Mythereum, both of which create more utility and value for specific genes (ie some cats are more valuable because these experiences exist).

If CryptoKitties had decided to reduce the decentralized value of the game for reasons of accessibility, The KittyVerse would not exist, the game would not be as reliable and the tokens would have almost as much value or utility for the players as a result.

Open ecosystems are important outside of DeFi

Cheeze Wizards, the new game from Dapper Labs, tries to exploit as many lessons as possible from CryptoKitties.

It is specifically designed as an open ecosystem: third-party developers can use the Cheeze Wizards API and artistic resources before the game launches its first official tournament by the end of the summer. Cheeze Wizards is also encouraging developers to play in the open ecosystem through a month-long hackathon, with $ 15,000 in cash prizes and a whole host of other rewards like incentives.

The same Cheeze Wizards is composed of "tournaments" hosted by Dapper Labs or third-party developers. The contract and the rationale for these tournaments are all chain, which means that any developer can create their own tournament and take a percentage from the amount collected.

The tournament contract is an integrated business model that developers can develop based on the existing IP, something that was never possible before with second level experiences.

Recognizing the reality that ethereum is not being resized today, CheezeWizards is really for and from the cryptographic community.

Blockchains and dapps can be designed so that developers can gain their fair share of contributing to an ecosystem. Rewarding developers for the maintenance or improvement of a network is the hidden treasure that craves to be discovered by open ecosystems.

"In the same way that the lively ecosystem of consumer exchanges and experiences around bitcoins, ether and ERC20 has driven the liquidity for resources, the ecosystem created by [third party] the experiences will be what drives the enthusiasm and confidence of consumers in digital assets. "

– Blockchain Gaming, which separates the signal from the noise of Devin Finzer

The choices we make now will shape the future

Many developers are turning to so-called "Layer 2" resizing solutions (eg Sidechains, Lightning network) to reduce the load on the basic blockchain and provide a better user experience. Even large companies are starting to rely on blockchain technology, compromising decentralization in favor of performance.

The pendulum for blockchain games in particular seems to oscillate towards more centralized solutions in an attempt to attract mainstream users.

Unfortunately, while this means that while developers will make users interact in an economical and simple way with their application, the main advantage of creating software in an open ecosystem – like the network effects of other developers – will be impossible to achieve.

The most difficult apps on sidechain and blockchain will have difficulty communicating with each other due to the friction and lack of standards for transporting digital resources through networks.

On the other hand, applications on networks that support open ecosystems can build one on the other freely and transparently, creating more choice for consumers and increasing the effects of the network for 39; whole system.

"Decentralized systems begin halfway through cooking but, under the right conditions, they grow exponentially as they attract new employees. "

– "Because decentralization is important"By Chris Dixon

We want to push the pendulum back in the opposite direction, towards open ecosystems and compostability without authorization. Open ecosystems empower customers and developers, ultimately creating more value for everyone involved.

Oscillates the image via Shutterstock

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