XAI Games: The Arbitrum Gaming Hub Explained

Transcript

welcome back to the rollup High Roller Community as always nothing on the rollup is to be ConEd as Financial advice we are just an Educators in the defi space toss us a quick like give us a share a repost send it to a friend who may want to watch this and finally give us a sub or a follow it means the world to help support credibly neutral educational content in def5 we're here to educate Empower and enrich you and let's jump in what's going on Welcome Back to the rollup yeah that was a little pregame did you like that I did I was I was a fan getting like hyped up you know actually I have a question before I just mess it all up is it Z is or is there a debate it's uh it's

Z it's Z but it it could be either or it could be xai or it could be Z it could be whatever you want you know by say Z there's no centralized Authority yeah just the arbit from sequencer that's it that's the only person we have to bow down to yeah basically oh man so we are here today with our good boy soie who I think Rob met as well but I certainly did in um I think it's 2020 on a boat in Miami Luke Martin's boat Good Times um and now you've come in a amazing Direction with uh z a arbitrum orbit layer three some really cool news we can we're going to

dive into amot coming over to your chain which I thought was super based um the UPC or the the recent mint as well from our good friend Sebastian at Pima for their game and yeah but I know that there's a lot going on behind the scenes that you guys started this project some time ago so perhaps you could kind of just uh run through how you guys started um and then kind of like switching the name and kind of Direction a bit and where you are okay so I can uh we start off as a game studio and we still are game studio called X populus what will help will be helpful for people is like X populus and the zy foundation/ zai work uh similarly the same way that there's offchain labs and then there's

the ARB foundation so when we started off as a game studio in 2021 um we wanted to build awesome games we still want to build awesome games with awesome experiences but we also got really excited about the concept of uh incentive design around video games and where that fits ultimately we realized that uh incentives are actually kind of a crazy Pandora's Box for games in the sense that like now you have a financial incentive in games you're gonna have a [ __ ] ton of cheaters you're gonna have like that's actually the main bease for crypto gaming in my opinion isn't what anything else are people talking about it's like hey can we actually fix the cheating aspect of it right one way to tackle that is by building onchain games right because if you have there is no

server and there's very limited stuff on the client side people can't like inject weird [ __ ] [ __ ] and you know cheat you can have like vrf on chain so no one's like messing with things all the code is running on the chain that you can't it's a mutable code that you can't change so we started getting really into building onchain games to kind of avoid this problem um I'm just excited around the design space around onchain games in general I have pretty good relationships and networks in the space Network in the space and we you know went to a bunch of Big Chain providers and I I think you know everyone that's working on um standardized app chain or whatever are doing a really good job you know subnets have their pros and cons uh the polygon stack has their pros and cons and we

just kind of do started doing an analysis of everyone and um somewhere along this process I was like why don't we go talk to the arbitrum guys this was like a year ago so this is before even the orbit initiative uh and you know we hit it off with them really well really like the way that you know the arbitr from Tech stack worked and what they had on the road map and organically kind of came together and like hey what if you know offchain Labs would if you guys become one of our Tech partners and we build this chain together to directly address the needs of game developers right because we had all these pain points that we were like oh we really wish this wasn't the case or this wasn't the case um and we also wanted strong partners that you know are really

experience in building a blockchain so this is what Z was born out of and you know really some of the things that we've changed are you know this awesome user experience this gas lless experience for users there's a protocol enshrined gas subsidy contract uh that once you know govern governance and all that stuff starts that the protocol will have control over eventually and uh you know there's higher gas limits there's higher contract limits so you can push what you can do um on the Chain there's a few other stuff that we're working on that we haven't announced yet but yeah that's kind of the the story of it all is wanted to build awesome games realized that hey there's some things lacking on the blockchain side found an awesome partner to build uh this chain with and it it's it's a decentralized permissionless protocol so that you know

we're one of the core contributors to it but there's tons of people contributing uh to it offchain Camelot um you know rare bull a bunch of people are coming and building on the chain and and Pima Studios as well and we've had you know exp populace talks to some of these people because we're all building on the same Tech stack but a lot of this is just happening organically and people are really excited by it and I think yeah it's been awesome to see and we're excited uh where we're going to go over the next couple years yep yeah we can we can definitely get into the Weeds about arbitrum or bid and and the tech stack I just want to point out like you mentioned that uh putting games on chain overcomes this like massive like cheating Vector um I think there's that's like a two-sided

like attack Vector like you got the the participants in the game cheating against the other participants in the game but then you can take that all the way back to like the centralized game itself like the game developers that are like nerfing these characters and that's why ethereum was born to begin with right was because vitalik had his World of Warcraft account like all of his stuff taken away and his account was nerfed um so you've got like the centralized uh like game Studio that could kind of like attack and and cheat its players and then you have the players that cheat against one another so yeah I I think putting games on correct me if I'm wrong here but putting games on chain addresses both of those

concerns yeah I think uh to your second point of like hey you know game developers are like doing all these things and sometimes game uh players push back I've actually thought about this back and forth where I'm like does the community really know better and I think the answer is somewhere in the middle where I think actually that the community isn't well equipped in traditional gaming to have the clear picture because they're not getting all the analytics right they're not getting all the like the Deep analytics the attribution or like you know the Deep data funnel that like legal Legends has right because it's all on their own centralized servers there's no way for me to like qu there's no Dune dashboard for like Riot block like Riot right and so I do think that the even from my own

argument on this stuff because I try to think back and forth on this I agree with you in that point of like hey empowering players is an interesting experiment I do think there's like an air of caution on that because like obviously like people just want you know some people might not understand why something is being nerfed or balanced but I feel like that is a good reason to have this transparency right that like hey maybe the reason why players in because I I I obviously I play a lot of your games have not had the time to play video games for like nine months now unfortunately but uh you know I spend times on forums and you hear people complaining and all this stuff and you go oh man like I don't really know if I want someone like that making decisions but maybe they're not well equipped to

make those decisions because they don't have the clear picture and I think blockchain and all those types of EC commies for these future games is going to enable that and that I'm really excited when we have like the First full scale fully onchain game high production quality with a large user base what is that going to look like you know what is that interaction between the the player base and now the upgradeability of this game how is that going to intersect it's going to be really exciting to see yeah yeah I mean I've heard a lot about ZK rollups for for games being like you know topof the line in a sense um but uh it's still so early with like proving costs and times and things so makes sense that that kind of arbitrum orbit L3 was like a a logical choice

because like you said when you have all all these players trying to do all these different things um you know I'm curious like like how do you guys think about it from uh from like a blockchain perspective like does every action in a game need to be a a transaction like how are you thinking about um I guess scalability of like me going into um a world or maybe we can use um the Pima Studios game as an example um and talk a bit more about that generally with regards to like you know if I'm if I go to like in RuneScape to General bizaar and buy a sword okay that's a transaction but then if I talk to somebody and like click some buttons is that also a transaction like like how do

you balance the scalability and things and maybe you could use p as an example with their new game or just in general yeah I I think the important distinction to you for the listeners is like a transaction just means a state change right that on the Chain you're just like submitting some input to the blockchain so even when we use the word transaction we just mean some way that you're interacting with the blockchain it doesn't literally need to be a financial transaction or whatever or even like a null transaction So within that framework I think it's really interesting to think about like um you know do you set up do you have everything right like every aspect of it is like there is no server it's a serverless game and it's all ran on run on the Chain there's a lot of issues with like latency and stuff because then

you have to wait for like finality and that's where I think the ZK stuff comes into play where if it's like a fully fully onchain game it it's supposed to like reduce that latency I think with Pima like they've built their core game loop on on the Chain like the game logic is on chain for the battles uh the the uh pets are on chain they're tradeable Etc when we think about you know the games that we have in our funnel we have tons of web 2 games that we working with and and you know helping them get into web 3 we're thinking about like what actually makees sense right really easy assets the Assets in the game some should be tradeable some shouldn't there should be soft and hard uh Assets in the game that's usually a pretty easy one then when it comes to game logic it's

like usually pretty easy to be like hey if this game logic is in some way shape or form involved in the distribution of incentives let's be mindful here of like a cheating Vector maybe it makes sense to put some of this on chain um Implement like a like a winter vrf or super oracles vrf or whatever um then the other aspect of is like just generalized right like generalized things on chain I think it's really easy if you put things like achievements on chain right so you're building up like really you're building up like an identity layer almost of the players for the for them so it's like hey I could be playing um I've the recent thought experiments I've been thinking about is like what does a single player web 3 game look like right and so like within

that aspect I was like damn it's hella satisfying when I'm like playing Final Fantasy or like Halo or whatever and I get the little trophy I'm like oh [ __ ] the dopamine bro it hits so hard with the little notification I'm like oh that makes sense for like that aspect to be on chain like like I can me you like a soulbound nft that represents your uh achievement right but now like blockchains are very data Rich so I'm like building up this aspect of like oh man like you know Robbie's really good at using magic in all these different games or he's completed all of the God of War games and I can I can check that because of the the onchain uh history uh to it so there is a spectrum on uh that we're looking at so like I think the

point of what I'm trying to say on this is like there's no clear answer there's different aspects of the game that you can you can put put on chain I think over time as we get better about building games on chain and once that goes and continues I think we're going to establish better standardized Frameworks of like what should be on chain what shouldn't I think generally like having achievements on chain is something you can put on anything um and then again going back to the other aspect of it like I would urge people as say hey if you have some game logic that is going to be uh used in distribution of incentives try to put that on chain so you reduce the the

vectors there yeah yeah that that makes sense and I think as more games go on chain they'll they'll start to converge around these these standards and that's what unlocks what I'm most excited about with onchain gaming which is composability like when my my modular penguin can enter like Z gaming and then I can also use my penguin in another blockchain and another game and like now I have this Universal Character that I can use across all of these games like that is what I'm most excited about because then Worlds Collide and we can start to see like this intertwinement of different different worlds different incentives different models different designs

and I don't know how that happens or or what it takes to make that happen but I think it's a bootstrapping problem I think like that requires multiple games to live on chain and interact with one another and you only you you only get that level of composability after you have may like a a certain inflection point maybe it's four maybe it's five games that are able to interact with one another no the composability aspect is huge and like cross- selling is huge like the thing when I find it funny sometimes when like people on Twitter like oh I'm so bearish on crypto gaming and like I think part of that rationale comes from the fact that gaming like everyone's been saying for years like crypto gaming crypto gaming games take

hella long bro so games take hella along take longer than Market Cycles you have and Market Cycles as we all know in crypto are like the most Soul crushing and euphoric thing it's like the extreme aspect of the spectrum you'll make like life-changing amounts of money and then all of a sudden you're a victim of like the biggest financial fraud the history of the United States and the country has ever seen and it's like no in between right and I think sometimes people let their emotions Cloud that judgment as well but you know most of these games that I've been following since 21 are going to release this year and the three-year development life cycle is not that long for for a game but I just think about like even Beyond just hey you know make sense from like Way games work all that stuff this idea of like

right now if I'm playing a game from the same um same kind of develop Vel ER or publisher there's not much of an added bonus for me for like that loyalty aspect of it one thing that I loved about uh some of uh there was this one aspect of games where like based on how your ending was in like God of War you got like another you know there was this small Trend in gaming for a second where like if you had a certain save or like a certain ending in the previous game it impacted your second game they kind of shied away from that but I really like that composability of like within the same catalog of games and so I think compos abil you you've already seen that composability is like difficult to do in web 2 but it was cool like I love some

of those experiences and I do think the composability aspect of these games is going to be awesome but the point is the standardization needs to be there and we don't really know what that's going to look like that's probably like a multi several year time Horizon on where we try to figure that out as an industry right and for now it's like yeah for for now it's just like you control your execution environment you get way higher uh throughput super cheap transactions on an L3 people are going to come to uh Z chain to play it's not like it's not like they're gonna um like my point is that it's not like a Unis swap where you know you have to be on the general purpose chain to get users it's like people are going to come to

the chain from the outside funnel or from crypto native people and go directly to your chain for one use case but eventually where it's going to be a point where people are going to want to play multiple games across multiple individualized execution environments as you're saying and that standard is yet to be kind of uh set yeah there's on the on the arbitrum road map there's chain clusters that that that work so we're exploring that stuff as well um but it's a good problem to have right like if you have an app chain that's like doing really well for us we're really excited about building on top of our because it just makes it so much cheaper and for like the stuff that people are be doing on our chain I think it's like a good good tradeoff

um but that's like another thing I've noticed is like a lot like even gaming at scale on ARB one is too prohibitive with the cost like we you know gas is on Z gas is used in Z there's like a gas subsidy contract we're focusing on on all these things to make sure that you know we're solving problems and reducing friction there I think the whole aspect of reducing friction like that thesis was very validated when the zest net went live and uh it scaled to like 5 million something transactions a day without a hiccup like sub 200 millisecond block time and like a few hundred thousand wallets and that was without like we didn't announce there was an airdrop or nothing it was just very easy for you to get started create

a wallet get started and play the games and we were like okay like we're we're on to something here like reducing the friction is May the friction is the bottleneck there's content there's a Content aspect where we need better content better games but it doesn't even matter how good your game is if I have to like jump through ACH bunch of Hoops to get there yeah I agree completely um another cool thing about arbitr morbit that our audience may want to know or may have previously understood from the podcast with Stephen um from offchain Labs is that in arbit from orbit chains if there's no transactions you don't have to pay for the block uh space each block so Z as as an entity as a as a foundation then as like um you know

however it's it's separated right there's you know that is another kind of Advantage from the arbitrum orbit perspective which again makes things more scalable and more cost effective for both the users and the team now speaking more on arbitrum um arbitrum Dow is really awesome for supporting Builders talk to us a bit about your plans for um getting from for garnering some support with arbitrum I know it might be still a bit under wraps or in the late stages but um yeah I mean first of all I hella disagree with you I disagree with you the Dow being friendly towards builders that is not the case at all this [ __ ] is egregious and like I'm I know the point of that I want to add a

point of that is like the people in the Dow really care I'm obviously contributor to the DI as well people really care but there's like a lot of friction right now in terms of like there's almost as many freaking telegram chats as there are perex is right now it's getting like a little out of hand right we have like one of the biggest project on arban I actually don't even know how to get a grant where to go to it's confusing as [ __ ] and I'm in like every chat reading everything it it it's no it's horrible and it needs to change and it's going to change I think people are starting because it's a it's an experiment right and it's actually decentralized as the other aspect of it I still it's surreal to me when I get on calls like governance calls and there's

like 50 people spread across the world all coming to show showing up you know there's people like l2b and Kristoff and those guys that do awesome work there's Joseph from axis who does awesome work there's Matt from stable Labs that does awesome work um I think the the issue is just it's a lot of work to put on to a Founder to do something like it's it's a full-time job to do something with the Dow we're working on we're co-author uh with treasure and Dan from Vila shout out to Dan from Vila and uh The Savvy uh Savvy defi guys they helped a lot tremendous amount of help trying to put this proposal together it's going to go on the Forum soon uh and just trying to establish this gaming um framework and ecosystem for art because I truly think

it's the best tech stack and it's they're better off like having people like us and treasure go evangelize other developers because we know about gaming and kind of Outsource this diligence process to people that are actually building these games and Publishing these games um but yeah the the excited to work with the Dow on this stuff excited to change how how in Founders work with the Dow there's a uh delie and blockworks proposal that's out for the uh new Council thing that I'm really looking forward to supporting um just because I think that the the struggle is like dude I'm already working like 14 16 hour weeks and like I have a girlfriend who's like really sweet and patient but that you know I still have to like try

to live a normal life and I just can't like I'm already overworked and doing all the stuff if you add you know another there's just not enough time in the day I'm willing to make that sacrifice but there's just simply not enough time in that day so I think we're getting better in the Dow about scaling up and figuring out how do we work with Founders because at the end of the day the only people that empathize with Founders or other Founders or people have done it before and I I think those people are too busy building their protocols to be involved in the on the Dow stuff but we have a lot of good council members uh I think you guys are getting involved as well so looking forward to that but I think the so far the reaction from the Dow and the gaming

stuff has been good but it's been really interesting what I will say it's been really interesting to to understand how little people actually know about gaming and it's a huge education opportunity which is really cool but I was surprised by that it's all def5 but I was very surprised by that you know there's there's some people that go like oh arbitrum should just stick to focusing on Defi and I'm like dude does the App Store only have financial apps on there like this makes no sense dude there's a there's easily a world where Z has more users than all of arbit one just on on its own chain in like less than two years obviously you guys would have to freaking hit everything right but like it's gaming brings on people more than like any freaking P for lack of better term can it's like you know but no just I I think

Rob agrees as well we've gone through the Hoops of governance and arbitrum other ecosystems as well generally just defi governance and DOW governance is a bit of a hassle but is what it is to kind of get the decentralized systems churning don't want to get uh suuck up too much on here as we kind of close out in the coming minutes I would love to learn more about uh you guys bringing on cot to Z chain how how that looks like um and also if there's any Alpha for uh if you guys do get ARB um Rewards or um you know how those may be used for for users um as well as some Alpha for for this Camelot launch yeah good question so camelot's coming it's going to be the the deck onai um really excited about that love

the Camelot guys great team iron boots and the rest of the dudes absolute Chads we're going to be their first ever thirdparty deployment we're super stoked about it um to be honest with you we're going to even if we get the ARB Rewards or we don't we're going to stay stick steadfast in our mission to just bring awesome games to Z there's going to be you're gonna have like a lot of announcements coming over the next few days few weeks on uh infrastructure providers uh strategic Partners uh strategic Partners around gaming game Publishers Etc we've been you know we've been at it for like several years and now this the time to start executing and delivering on stuff um yeah and so that that is like the situation for us at least is like we're

not like to be honest with you I am not betting my chips on the Dow giving us like funds we have such a good relationship with game developers um and you know building out like the foundation is building out some ecosystem fun stuff all this exciting stuff going on that I think independent of what happens things are going to be great um if if the Dow stuff happens even better but really the the idea is to be very mindful about where we're spending how we're spending um and and gaming has like a very established way to do these things right like my um on the on X popular side my co-founder has like a 177e crazy history in gaming ran like IGN's in game incubator like pushed over a billion installs so we have tons

of good gaming DNA I think we're one of the few teams that have like deep crypto experience and deep gaming experience which is why we've been executing so well but it's going to be a really exciting year basically um for for Ze and really looking forward to it we're so early Rob so early I'm stoked let's go man yeah I appreciate you coming on and would love to keep the conversation rolling as uh as onchain gaming continues to evolve um you guys are pushing pushing the envelope on both the uh the tech blockchain side as well as the gaming side so best of luck and uh yeah love love uh keep up the good work love it arbit the home of gaming the def the

defi Hub and and the gaming Hub yes sir let's do it anything is possible in arbit