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3/21/2024

The Pitfalls of Multi-Chain Strategies for Web3 Games

Abstract image with text "The Pitfalls of Multi-Chain Strategies for Web3 games"
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TL;DR
  • A multi-chain strategy (aka cross-chain) exposes games to unnecessary complexity, user friction, potential for security exploits, and performance / compatibility issues. 
  • Game developers should limit the number of bridges they are exposed to reduce complexity, optimise player experience and avoid unnecessary risk. Over $2 billion USD was lost in 2022 due to crypto-bridge hacks. Four out of the top five largest cryptocurrency security exploits in history have been carried out on bridge-based protocols (Rekt, 2023). 
  • By embracing full-stack solutions that minimize the number of bridge exposure points like Immutable, game developers can prioritize the player's experience and deliver a seamless, engaging, and enjoyable gaming environment that fosters the growth of the web3 gaming industry without compromising security.

Web3 gaming moves fast, with game studios and developers always on the lookout to enhance gameplay experiences and tap into the potential of decentralized technology. 

One approach that is getting increasing attention is a multi-chain or cross-chain strategy: instead of trying to pull players to the specific chain you build your web3 game on, your web3 game would live on multiple chains and you would meet the players on their chain of choice.

However, pursuing multi-chain strategies can introduce unnecessary complexity and friction for players, leading to a subpar gaming experience and business outcome for games.

Sreengrab of a Tweet

Additional layers of complexity can negatively impact performance, and compatibility, and introduce increased security vulnerabilities with each additional bridge that is included in the ecosystem - as seen by the over $2 billion lost from crypto bridge hacks in 2022.

Moreover, the trend towards single-chain solutions is clear, with over 90% of web3 game migrations occurring from one single chain to another, rather than expanding to multiple chains (Game7, 2023). In 2021 there were 12 migrations vs 48 in 2022 and 65 in 2023, with Polygon and Immutable receiving most games from other blockchains.

In this blog post, we dive into the pitfalls of a multi-chain strategy and emphasize how it negatively impacts players and games. We argue that pursuing single full-stack and end-to-end player solutions, like Immutable, is a more effective, safe, and advantageous option for game studios and developers. 

A multi-chain strategy can be detrimental to player experience

As a pioneer in web3 gaming, we at Immutable understand firsthand the challenges and limitations of a multi-chain strategy. 

In 2019, Gods Unchained players who owned a CryptoKitty on Ethereum's L1 network could claim a cat cosmetic on their game board. The crypto natives in the Gods Unchained player base loved this feature. But for the majority of gamers, multi-chain strategies often result in confusion and unnecessary friction for players. 

Players need a seamless and straightforward experience when interacting with a game, while being able to use their assets across different games and platforms without worrying about technical glitches or compromising the security of their holdings.

When games adopt a multi-chain strategy, they confront their players with multiple chain-specific wallet requirements, token standards, and even different methods for acquiring or trading in-game assets. 

This fragmentation creates friction, a steep learning curve for players – returning or new – and limits their ability to fully immerse themselves in the gameplay.

A multi-chain strategy introduces technical limitations, increased costs and risks for game developers

Beyond the player confusion caused by multi-chain game strategies, game developers also encounter technical challenges and limitations. One of the major drawbacks of multi-chain strategies is the complexity involved in bridging to and from different blockchain networks. 

Though we live in a world where bridges are still a necessary part of the blockchain scaling ecosystem, including at Immutable, we argue that developers should limit the amount of bridges they expose their game to.

As a developer, you either depend on external solutions that reduce NFTs to wrapped tokens, stripping away the unique properties of those digital assets, or you have to build and secure your own in-house bridge solution across multiple chains. Both options present challenges in terms of on-chain metadata, composability, and wallet integrations, particularly when dealing with non-EVM compatible chains. 

The maintenance costs associated with each additional chain – through also needing to hire additional in high demand blockchain developers – are unlikely to be offset against on-chain earnings, such as royalties, incentives, or developer grants, which only cover a portion of the additional cost burden adding extra chains brings. 

The more chains you link together through bridge providers, the more foreign code you invite into your ecosystem

Expanding to multiple chains increases the attack surface, introducing more potential vulnerabilities like hacks and exploits. The need to bridge tokens between multiple chains across multiple bridges can result in loss of functionality and compromise the integrity of in-game assets. 

Simply put, you are not the one in control of how secure bridge providers are, which means your game is only as strong as the weakest bridge. 

Managing bridges across multiple chains also means keeping track of multiple code bases, and every update adds a code review task for your development team, which can lead to delays in updating when critical issues are announced requiring patching, and also represent an unknown cost.

And even if you do not get hit with a bridge hack, the problem of securing funds across multiple bridges becomes an administrative nightmare, since there are liquidity hurdles you must navigate to keep them operating.

Fragmented liquidity across multiple chains leads to fragmented communities 

Another significant drawback of multi-chain strategies is the fragmentation of communities and limited liquidity. 

Each blockchain network operates as its own ecosystem, and the players and assets within each chain remain largely isolated from one another. This fragmentation limits the potential for a vibrant and interconnected gaming network effect. Each chain becomes its own liquidity silo, fragmenting the buyers and sellers of a collection. 

Read more here on Immutable's Liquidity Strategy in Web3 Gaming

This fragmentation undermines the network effect that can be achieved within a single ecosystem, hindering liquidity and limiting composability.

The case for full-stack end-to-end player solutions like Immutable

When considering multi-chain strategies, it's crucial to recognize that it's not a choice between Immutable and other chains. 

It's a decision between leveraging a comprehensive full-stack solution like Immutable or building a DIY Web3 stack from scratch for each chain, with its quirks, different vendors, and potentially different smart contract languages.

There has been a growing industry consensus for more unified, streamlined web3 gaming ecosystems.

Immutable offers a streamlined and cost-effective solution that allows studios to focus their budget and resources on core gameplay, reducing upfront and long-term costs. 

By focusing on a single unified platform and ecosystem, full-stack solutions like Immutable prioritize the player's experience and eliminate the unnecessary complexities associated with multi-chain strategies.

Immutable is a secure, user-friendly, and scalable gaming environment where players can enjoy true ownership of their assets, seamless interoperability, and a vibrant gaming community. Our goal is to onboard and retain mainstream gamers who have yet to fully embrace crypto, allowing them to buy in and cash out of games effortlessly and experience true ownership of digital assets. 

By providing a tightly integrated platform, Immutable offers millions of gamers their first experience with crypto, prioritizing security, user experience (UX), and scalability. 

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