Projects based on indestructible tokens like Loot and The N Project have helped raise interest in Metaverse to all-time highs, which in turn gives hope that blockchain will finally hit the masses. Is it him or is history doomed to repeat itself? The problem is that the same things that capture the imagination of the audience end up degrading the performance of mainstream platforms and raising barriers to entry higher than ever. In this article, I explore the underlying issues that are responsible for creating these dynamics with the goal of helping solve these issues once and for all.
The main problem is that old blockchain technology, especially Ethereum, presents huge barriers to access that prevent Metaverse from attracting new users. These problems are then exacerbated by the inability to allow network users to set a constant price for network usage.
Monkeys and penguins are dear
The fees required to use the popular NFT marketplaces can be an insidious problem because projects often impose such costs on the user with often unrealistic expectations of potential profit. A quick look at Etherscan reveals the surprisingly high cost of transaction fees paid for each project. Projects such as Bored Ape Yacht Club and Pudgy Penguins force their users to pay 106.7 and 111.4 Ether (ETH), respectively, to interact with their smart contract. In total, users of these two projects had to pay about a million dollars in transaction fees!
Axie Infinity, is it really NFT based?
But here’s the thing: these projects are not really NFT-based games! In Axie Infinity, players can fight and breed small creatures, which can then be sold or leased to other players precisely because they are implemented as NFTs. This is what makes Axie Infinity a good example of an actually NFT based game. The problem is that the more the game uses NFT and the benefits of blockchain-based assets, the more ETH users will have to pay.
Both the trading and tribal aspects of these games require transaction fees on the Ethereum blockchain. Axie Infinity paid over 15,000 ETH transaction fees, roughly equivalent to over $ 60,000,000! This is money that developers could use to improve their products, but more importantly, money that users could spend to buy more digital assets from both Axie Infinity and other game developers.
catch-22 for new users and publishers
Lured by the NFT craze, many new users are moving to a market like OpenSea to host their NFTs. In an ideal world, this would be a great opportunity to add another blockchain lawyer to your ranks, offering a great user experience. Unfortunately, there is currently a transaction fee associated with listing an item on OpenSea at around 0.1 ETH, or around $ 400. This is not the kind of user experience that makes people think they are using some kind of futuristic technology!
These ridiculous fees not only harm new users trying to understand what blockchain mania is, but also discourage larger enterprises from building on blockchain platforms. Why would major video game publishers embed NFTs in their games when the end consumer of their product had to pay over $ 100 to trade in-game weapon skins? Of course, no consumer will be thrilled with NFT assets in the game, which are more expensive to trade than in the base game.
While a major video game publisher has ambitions to cover the blockchain transaction fees for the player base, those fees will still be expensive and increase in proportion to the game’s lifecycle. In fact, the publisher of this game will be punished by increasing the number of repetitions of their game! Given these shortcomings in current blockchain transaction prices, it’s no surprise that we haven’t seen video game developers and publishers first start digitizing assets in the blockchain game.
Blockchain without fees
It is clear that there are serious problems with current NFT based games on older blockchains. This is largely due to their transaction pricing mechanism, which prevents new user acceptance and discourages video game publishers from using NFT resources in their games. Unfortunately, we don’t get anywhere near the names of 3D video games that use blockchain to track the ownership of assets in a game. It would be too expensive for consumers or publishers to bear the transaction costs on a fee-based blockchain.
However, there is hope. It is possible to exclude commissions from the blockchain user experience.