Blockchain Made Easy: Develop Your Idea into Reality with Luniverse Node

With the increasing adoption of blockchain technology in businesses, many companies are facing challenges in implementing and utilizing it due to the high barriers to entry. To operate a successful blockchain business, both technical and business aspects must be considered. Let’s discuss the concerns that companies preparing for Web3 businesses are facing and explore potential solutions.

Concerns from a business perspective

First, cost

Operators of blockchain or Web3 businesses often encounter difficulties due to the fast-changing nature of the blockchain industry. The value of cryptocurrencies, including tokens and NFTs, is highly volatile, and the fluctuating prices of gas fees needed for processing transactions (smart contracts) on the Ethereum network make it challenging to forecast costs.

Second, regulation

Moreover, the technology and regulatory landscape of the blockchain industry is continually changing, making it challenging to predict future market trends accurately. Regulatory concerns arise in various sectors where blockchain technology is employed, including travel rules for anti-money laundering and regulations based on the security status of tokens.

High barriers to entry

The growth rate of the blockchain market is significantly higher than the number of available blockchain experts. Entering the market requires designing and building distributed systems and smart contracts and keeping up with emerging regulations, making it a challenging endeavor.

Concerns from a technical perspective

Lack of development personnel

The infrastructure for operating or preparing for blockchain businesses is also inadequate. Running blockchain nodes or networks can be costly for large-scale DApps, and small projects may face challenges due to high entry barriers. Moreover, the complex and rapidly evolving regulatory environment, particularly in areas like cryptocurrency and token securities, significantly affects blockchain technology. Ensuring compliance with relevant laws and regulations can be quite challenging for businesses without prior experience in finance or technology industries.

Lack of infrastructure

The infrastructure for operating or preparing for blockchain businesses is also inadequate. Running blockchain nodes or networks can be costly for large-scale DApps, and small projects may face challenges due to high entry barriers. Moreover, the complex and rapidly evolving regulatory environment, particularly in areas like cryptocurrency and token securities, significantly affects blockchain technology. Ensuring compliance with relevant laws and regulations can be quite challenging for businesses without prior experience in finance or technology industries.

Lack of documentation and tutorials

Blockchain is a complex industry with high entry barriers, both from business and technical perspectives. Unlike other industries, there are not many comprehensive documents or materials that can help individuals learn the industry rapidly. Developing and deploying DApps effectively takes significant time and effort.

Difficulty in data indexing

Introducing blockchain technology to businesses generates and manages enormous amounts of data, much of which is complex and challenging to utilize effectively. This problem can limit or reduce the potential value of blockchain in certain situations.

Decision makers are always worried about the above business and technical reasons, and may fall behind in a rapidly changing era.

The Most Challenging Technical Aspect: Node Setup and Scalability

Node Setup

One of the most challenging aspects of the DApp development planning phase is node setup. To operate a DApp, a node is required to manage the interaction between blockchain elements and those outside of the blockchain. Nodes play crucial roles in maintaining blockchain security and reliability, including:

  • Storing a copy of the blockchain ledger
  • Validating transaction validity
  • Creating new blocks
  • Maintaining network security of the blockchain

Scalability Issue

As the amount of data stored on the blockchain increases, so do the storage and related requirements for each node that participates in the network. If a node is operated as a single entity, catastrophic damage can occur when the node goes down. Although having multiple nodes can mitigate this risk, maintaining data integrity and operating multiple nodes require additional infrastructure and significant costs.

Mainnet Compatibility

DApps are developed based on mainnets such as Ethereum, but eventually, they must be compatible with other mainnets. Each blockchain network is a separate entity, so transactions occurring on different blockchain networks are often not recognized by each other.

Therefore, DApp operators need to develop compatibility with various blockchain networks. In the process, developers need to create smart contracts that operate on each network and access different blockchain networks using node providers’ services to deploy DApps for user adoption.

Ultimately, DApp operators inevitably face node expansion and mainnet compatibility challenges, incurring significant costs in the process. They need to hire infrastructure experts for node expansion and mainnet experts for various mainnets such as Ethereum, Polygon, and Binance.

What is a Node Service?

Although the significance of node expansion and compatibility with multiple mainnets for a successful business is well-known, it is a time-consuming and costly process for companies in the initial stages of development or with insufficient capital to hire developers and planners responsible for node and mainnet compatibility and operating nodes. However, recently, SaaS products called Node Providers or Node Services have emerged, allowing easy node operation while being compatible with various blockchain networks. Additionally, they can easily monitor the status of other blockchain networks and retrieve the data necessary to build smart contracts.

For instance, Luniverse node service, developed by Korea’s Lambda256, is a representative example, and there are also others such as Alchemy’s Super Node and Infura’s node service.

Criteria for Choosing a Node Service

Many node services are available on the market, and we can select one that suits our needs. The benefits of being able to operate a node easily in SaaS form, without the high cost of building and expanding it ourselves, are undoubtedly significant. However, as mentioned earlier, nodes play a crucial role in ensuring security and reliability in blockchain networks and DApp operations, so it is crucial to consider carefully when selecting a node service.

Reputable Traditional Blockchain Company

If a blockchain specialized company has its mainnet or has experience in building one, the likelihood is high that its node service is well developed. To build a mainnet, nodes must be operated to maintain the blockchain network and execute smart contracts based on it. Without node operation, new transactions cannot be verified, and the blockchain’s state cannot be updated. Typically, companies that have built their mainnet have operated multiple nodes simultaneously, indicating their ability to operate a node service that is secure, reliable, and efficient.

Support for Various Mainnets

Support for various mainnets is essential for expanding DApp services and increasing user entry. It is challenging to ensure compatibility with numerous mainnets like Ethereum, Polygon, Binance, and AppToS in a short time with limited personnel. Even if compatibility is achieved, ensuring stability can be difficult. Therefore, selecting a node service that supports various mainnets is recommended when choosing a node service.

Competitive Cost for Quality

The node, mainnet, and specs required for each DApp developer and operator will differ. Some DApp operators say that they struggle with the additional costs incurred due to specs that are higher than necessary when using a node service. Node services usually calculate additional charges based on API requests per cost or computing unit (CU) used. Node services are certainly operated at a much lower cost than building and operating them ourselves, but there can be a cost difference of up to 2-3 times depending on the location of operation. Therefore, we recommend using a service with a competitive and appropriate pricing for its quality.

Efficient and Diverse APIs

In the end, a node service is a product that can be developed by connecting to various mainnets such as Ethereum and Polygon through APIs. It is best to select a node service that supports diverse APIs such as wallet balance, token (FT) and NFT data, and statistics data of deployed DApps for better development environment and scalability for DApp developers.

Luniverse Node

The node service we are introducing today is Luniverse Node developed by Lambda256. Luniverse Node is a node service that meets all of the above requirements based on the following competitiveness.

Stable node service

Luniverse has been operating blockchain infrastructure for a long time since the time when blockchain technology began to receive public attention, and provides stable and robust blockchain nodes based on that experience. You can immediately start development by utilizing the Luniverse node service without the need for building an Archive node that requires a lot of resource investment.

Multi-chain Web3 API

Luniverse Node service allows you to search for data in multiple blockchain environments with a single API. Through the Multichain API, you can inquire about account balances, token and NFT information, block and transaction statuses, and statistics data of deployed DApps.

Various additional functions such as Stream & Webhook

You can build a reactive DApp by tracking real-time blockchain events. By utilizing Stream and Webhook, you can receive event notifications by account, type, and condition subscribed, and perform various logic on the DApp side, including sending notifications.

In addition, you can easily check the traffic and error situations by time zone through the dashboard. By utilizing Debugger for request/response analysis, you can track and respond to errors, thus providing a stable DApp service.

Luniverse Node currently supports Ethereum and Polygon networks, and Luniverse team is working hard to support more mainnets such as AppToS and Optimism in the future! Experience high-quality node service at a lower price.

Luniverse: Join us at Consensus 2023 for Exclusive Promotions and Benefits!

The world’s largest annual blockchain technology conference, Consensus 2023, is just around the corner. Consensus 2023 is a conference organized by Coindesk, bringing together the most prominent leaders, entrepreneurs, developers, and investors from the blockchain and cryptocurrency industry. This year’s event will take place in Austin, Texas from April 26-28, 2023, and Luniverse will be one of the exhibitors at the conference!

Luniverse at Consensus 2023

During the conference, Luniverse will showcase its blockchain solutions and demonstrate how they can help businesses achieve their goals. Visitors to Consensus 2023 can expect an exclusive experience at Luniverse’s booth, located at Booth #1300, near the main stage.

(Click the map to view the booth location)

Exclusive Benefits for the Visitors

The company has prepared an exciting giveaway promotion for the visitors, including a free gift and a free trial/promotion for Luniverse blockchain services and USDC giveaway. Visit Lambda256’s booth to get their free gifts and learn more about Luniverse’s blockchain solutions!

1. Free Gift Giveaway for VisitorsΒ 

Come to the Luniverse booth and get a chance to win a free gift. All you need to do is leave your namecard or submit your name/email below to claim your prize. Don’t miss out on this exciting opportunity to receive a free gift from Luniverse!

2. Follow us on Twitter/DiscordΒ 

Win more free gifts at our booth! Simply follow us on our official Twitter and Discord community. Click the icon to access each account and start following us to get more gifts. Good luck!

3. Luniverse NOVA Trial – USDC giveaway

Sign up Luniverse NOVA and get USDC and membership NFT rewards in 3 mins! Experience the power of Luniverse blockchain services today for free.Β 

Exploring zkEVM: A Scaling Solution for Ethereum

In recent years, the blockchain and cryptocurrency spaces have achieved tremendous growth and innovation with the emergence of various use cases and applications. However, with the development of blockchain technology, scalability issues have emerged as the number of users has soared. Blockchain technology’s potential has become more apparent, from the CryptoKitties craze in 2017 to DeFi Summer in 2020 and NFT Boom in 2021, but this growth has led to high gas costs and low throughput, making it a big challenge to popularization.

One of the best ways to solve this scalability problem is to utilize zero knowledge proof(ZKP). ZKP means that you can prove whether the information is true or not without exposing your information to the other person. Based on this concept, ZK-rollup, a layer 2 scaling solution, has emerged. Recently, a zero knowledge Ethereum Virtual Machine (zkEVM) using ZK-rollup has been developed.

zkEVM is a solution that leverages ZKP to improve the scalability of the blockchain. To understand this, it is important to understand the concept of ZK-rollup first.

Zero Knowledge Rollup (ZK-rollup)

zk-rollup is a layer 2 scaling solution that aims to increase the throughput of Ethereum transactions by processing them off-chain while ensuring on-chain security. It achieves this by bundling multiple transactions together and generating a single proof for the entire batch. There are two main components of a zk-rollup:

ZK-rollup components

  • Operator: The operator is responsible for collecting and aggregating user transactions into a single batch. They also facilitate the processing of these transactions in the off-chain VM and submit the generated validity proofs and new state root to the on-chain smart contract.
  • Off-chain Virtual Machine (VM): The off-chain VM is responsible for executing the bundled transactions in a manner similar to the Ethereum Virtual Machine (EVM). It processes smart contracts and performs necessary state transitions off-chain to reduce on-chain computation requirements. Additionally, the off-chain VM generates the validity proofs for the batched transactions.
  • On-chain Smart Contract: This component serves as a bridge between the off-chain VM and the main Ethereum network. It receives the aggregated transactions, along with their validity proofs, and verifies them before updating the on-chain state. This ensures that only valid transactions are recorded on the blockchain.

EVM Compatibility of ZK-rollup

zk-rollup provides significant advantages in terms of scalability and security; however, it faces some limitations in achieving full EVM compatibility. The primary reason for this limited compatibility is the complexity of generating zero-knowledge proofs for aggregated transactions. Certain EVM operations, especially those involving dynamic data structures, loops, or intricate arithmetic, may not be easily incorporated into efficient zero-knowledge proof circuits.

As a result, zk-rollup may encounter difficulties in supporting all the features and functionalities of the EVM seamlessly. This constraint could limit the range of smart contracts and dApps that can be effectively deployed and executed using zk-rollup.

To overcome these limitations and enhance EVM compatibility, zkEVM was proposed as an extension of zk-rollup.

zkEVM

Β 

zkEVM is an extension of zk-rollup that seeks to enhance the EVM compatibility of zk-rollup by creating an off-chain execution environment for EVM-compatible smart contracts. In zkEVM, the off-chain virtual machine (VM) is designed to execute EVM bytecode directly, allowing for seamless integration with existing Ethereum smart contracts and dApps.

Like ZK-rollup, zkEVM aggregates multiple transactions into a single batch and processes them off-chain. The off-chain VM is responsible for executing the batched transactions, generating validity proofs, and updating the off-chain state. The validity proofs are then submitted to an on-chain smart contract for verification, and if validated, the on-chain state is updated accordingly.

zkEVM components

To achieve EVM compatibility and scalability, zkEVM utilizes an off-chain execution environment for processing transactions. This off-chain environment is composed of three main components: the execution environment, the proving circuit, and the verifier contract.

  1. The execution environment

    The execution environment in zkEVM is designed to execute EVM bytecode directly, allowing for seamless integration with existing Ethereum smart contracts and dApps. This environment consists of a set of pre-compiled circuits that can execute a wide range of EVM bytecode operations efficiently. When a new transaction is submitted, the execution environment processes it and updates the off-chain state accordingly.

  2. The proving circuit

    After processing the transaction in the execution environment, the proving circuit generates a validity proof for the entire batch of transactions. The proof attests to the validity and consistency of the off-chain state resulting from the execution of the transactions. The proving circuit uses zero-knowledge proofs, which allows for efficient and secure validation without the need to reveal transaction details.

  3. The verifier contract

    The validity proof generated by the proving circuit is submitted to the on-chain verifier contract for verification. The verifier contract checks the proof’s validity and consistency with the current on-chain state before updating the on-chain state with the new state root. The verifier contract ensures that only valid transactions are recorded on the Ethereum network.

Advantages of zkEVM

zkEVM offers several advantages over other scaling solutions on the Ethereum network, such as:

  1. Secure Scalability

    zkEVM provides secure scalability by allowing off-chain transaction processing without sacrificing on-chain security. The use of zero-knowledge proofs ensures that only valid transactions are recorded on the Ethereum network, maintaining the network’s security and integrity.

  2. Cheaper Costs

    zkEVM significantly reduces transaction costs by processing transactions off-chain. The off-chain processing significantly reduces gas fees, making it more affordable for users to participate in the Ethereum network. Additionally, the use of zero-knowledge proofs reduces the computational overhead and gas costs associated with verifying transactions.

  3. Fast Finality and Capital Efficiency

    zkEVM offers fast finality for transactions, with the off-chain processing enabling faster confirmation times. This increased speed makes zkEVM ideal for high-frequency trading and other applications where fast confirmation times are critical. Additionally, zkEVM allows for capital efficiency by reducing the need for users to hold large amounts of ETH or other tokens to pay for gas fees.

  4. Network Effects

    By providing EVM compatibility, zkEVM offers significant network effects by enabling seamless integration with existing Ethereum smart contracts and dApps. This integration makes it easier for developers to create and deploy new applications and services on the Ethereum network, further expanding its ecosystem.

Drawbacks of zkEVM

While zkEVM offers several advantages over other scaling solutions on the Ethereum network, it also has some drawbacks that should be considered. Some of the main drawbacks of zkEVM include:

  1. Opcode codes

    Due to the unique architecture of zkEVM, not all EVM opcodes can be supported. Some of the less commonly used opcodes may not be compatible with zkEVM, limiting the functionality of some smart contracts and dApps.

  2. Stack-based architecture

    The EVM is designed as a stack-based machine, which can be challenging to implement efficiently in zero-knowledge proof circuits. This limitation can lead to higher proving costs and slower transaction processing times.

  3. Storage overhead

    As with any off-chain solution, zkEVM requires additional storage space to store off-chain state. This storage overhead can be significant and may require additional resources to maintain and scale effectively.

  4. Proving costs

    While the use of zero-knowledge proofs offers several benefits, it also comes with some costs. Generating and verifying zero-knowledge proofs can be computationally intensive and can significantly increase the transaction processing times and gas costs associated with zkEVM.

These limitations can affect the functionality and efficiency of zkEVM. Recently, many projects are trying to solve these shortcomings.

zkEVM Projects

  1. Polygon zkEVM

    Polygon has focused on optimizing opcode codes by designing custom opcodes specific to their zkEVM implementation. These custom opcodes are tailored to reduce the complexity of circuits, resulting in more efficient proving and verification processes. Additionally, Polygon is working on improving the stack-based architecture by introducing intermediate state representations to reduce the stack’s depth, which can lead to more efficient circuit designs and lower proving costs.

  2. zkSync

    zkSync has developed a unique approach to address the storage overhead issue by utilizing a technique called “sparse Merkle trees.” This allows for more efficient storage of account and contract data, as well as quicker updates to the state. To tackle the proving cost challenge, zkSync is also investing in research and development of more efficient proof generation algorithms, which can potentially reduce the time and resources required for generating proofs.

  3. Scroll

    Scroll is primarily focused on privacy and addresses the storage overhead issue by implementing a privacy-preserving storage mechanism that leverages zero-knowledge proofs. This allows for the efficient storage of data while maintaining privacy. To tackle the opcode codes and stack-based architecture challenges, Scroll is working on optimizing its zkEVM implementation by designing specialized circuits and adopting innovative techniques to reduce the complexity of the overall system.

  4. Applied ZKP

    Applied ZKP is a project dedicated to researching and implementing practical applications of knowledge proof technologies, including zkEVM. Applied ZKP uses two validations: state proof and EVM proof to separate compute and storage and to link them using bus mapping. In addition, Applied ZKP is developing new algorithms, tools, and libraries to improve the efficiency of opcode code, simplify stack-based architecture, reduce storage overhead and lower attestation costs.

Conclusion

As previously discussed, zkEVM is one of the promising solutions that can address the scalability issues faced by the Ethereum network. Although zkEVM is still in the development stage, it has great potential to not only transform the Ethereum ecosystem but also bring about the mass adoption of blockchain technology. In particular, the synergy is expected to be tremendous when combined with Layer 1 solution, sharding.

If you are planning a business using blockchain technology, consult with an expert!

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Ethereum Sepolia Testnet – Now Supported on Luniverse NOVA

Ethereum Testnet: Sepolia vs Goerli, which one is better?

Luniverse now supports the new Ethereum Sepolia Testnet! πŸ‘ In this post, we will explore what a blockchain testnet is, examine the current state of Ethereum testnets, and learn how to connect to the Ethereum Sepolia Testnet through Luniverse.

What is a Blockchain Testnet?

A testnet is a separate blockchain development environment designed to operate similarly to the mainnet environment. Web3 developers can use testnets to verify and optimize the deployment and execution of applications and smart contracts, minimizing expensive gas fees in the mainnet environment. Usually, testnets supporting major public chains exist in multiple configurations that changes continuously. This is because testnet environments not only are newly built by foundations or third parties who want to contribute to the ecosystem, but also cease operation due to operational burdens or the depletion of test tokens. In order to select the optimal DApp test environment for their purposes, developers need to continuously monitor these changes.

Ethereum’s Prominent Testnet, Goerli

Since the launch of the Ethereum mainnet, there have been seven testnets; however, as of April 2023, only Goerli and Sepolia are available for use. Ropsten, which was in operation until the second half of 2022, and Rinkeby, which is scheduled to cease operations in 2023, were recently deprecated.

Goerli, one of the major Ethereum testnets, started as a hackathon project in Germany in 2018 and has been officially operating since the first quarter of 2019. Goerli was designed to support extensive client compatibility, including OpenEthereum, Geth, Nethermind, and Hyperledger Besu, as well as an open validator set for high network availability and reliability. As a result, Goerli has gained high recognition among developers for years, along with a strong community, many DApps, and supporting infrastructures. After the Ethereum Merge, the protocol changed from Proof-of-Authority (PoA) to Proof-of-Stake (PoS), further solidifying its position.

However, Goerli has recently faced usability issues due to faucet problems and node synchronization speed. Since testnets use the same protocol as Ethereum, test tokens equivalent to ETH are required for testing processes like transaction submissions. Developers must receive a predetermined amount of test tokens from separate service providers because these tokens cannot be purchased through exchanges. This process is called a faucet. In Goerli’s case, most of the mineable test tokens (goETH) have been depleted, causing liquidity issues. As a result, developers have experienced delays of several hours to days in receiving tokens after requesting a faucet. Additionally, Goerli requires relatively long synchronization times and significant storage space for node operation due to the large chain size, making it difficult for developers to set up a test environment.

The Latest Ethereum Testnet, Sepolia

Sepolia, which was proposed by Geth client developer in October 2021 and began operation in the fourth quarter of the same year, is a new testnet. Although Sepolia has a smaller number of DApps and a smaller developer community compared to Goerli due to its short operational period, it is suitable for developers who have difficulty setting up a test node environment with Goerli because it requires less time and storage space for node synchronization. Also, Sepolia operates on a closed validator set, enabling stable and fast block validation.

Which Testnet Should You Choose?

Sepolia offers stable block validation speed and the ability to start testing quickly without the test ETH Faucet issues that were problematic in Goerli, making it a good alternative for developers who want to deploy and test smart contracts. The fact that Sepolia is operated by the Ethereum Foundation and its core developer teams also adds to its reliability.

On the other hand, in terms of environmental similarity with the Ethereum mainnet, Goerli is superior. If you’re a beacon chain validators or a developer who wants to test Ethereum protocols through various clients, the Goerli testnet would be a better choice than Sepolia.

Using Sepolia with Luniverse NOVA

In response to these changes, Luniverse now supports Sepolia network nodes alongside Goerli πŸŽ‰ To create a Sepolia node, access the Luniverse console (console.luniverse.io) and select Sepolia in the Node creation screen as shown below.

Once the node is created, enter the following chain information to add the Sepolia testnet environment to your wallet and development tools:

Tip! : Are you planning to use the Sepolia testnet? Through the Sepolia testnet Faucet link provided by Luniverse Station (station.luniverse.io), you can receive a certain amount of SepoliaETH for free every day!

In conclusion

In this post, we learned about Ethereum’s new testnet, Sepolia, which is now supported in Luniverse NOVA, and how to connect it using Luniverse NOVA’s Web3 Engine. Now, without setting up a separate node, you can use Luniverse’s Sepolia node to create a stable DApp testing environment. Luniverse will tirelessly strive to create the best Web3 development platform, so please keep staying with us on this journey. πŸƒβ€β™€οΈ Subscribe to the newsletter and receive the latest news promptly!

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Why P2E Games and Blockchain Technology are a Perfect Match

Intro

Recently, games that combine P2E (Play-to-Earn) features and blockchain technology have become popular, causing a significant shift in the gaming industry. Through P2E games, players can trade in-game assets and currency for real money efficiently and reliably. In this article, we will explore why P2E games and blockchain technology are a perfect combination for the gaming industry, as well as the risks and limitations associated with implementing blockchain in games, and lastly the potential solutions to hedge the risk. By reading this article, you will gain a better understanding of the potential of P2E games and blockchain technology, and be able to establish new business models and strategies in the gaming industry.

What is P2E game?

Definition of P2E and Differences from the conventional games

P2E games, or Play-to-Earn games, refer to games where players can earn real money by playing. Players can receive in-game assets as a reward for participating in the game, and this can be traded into real value asset later. Typically, most of these games utilize blockchain technology to prove ownership of in-game assets, as well as to transfer and trade them.

In P2E games, players can receive digital assets as a reward for completing various actions and missions. These rewards, in the form of tokens or NFTs (Non-Fungible Tokens), are implemented through blockchain technology. These tokens or NFTs can be exchanged for other cryptocurrencies or traditional currencies, allowing players to monetize their in-game assets.

Ultimately, P2E games offer not only an enjoyable gaming experience, but also the potential to generate income while playing. Similarly, providing tokens and NFTs to pre-registered users before the game’s launch can be an effective way to attract users, while it can save the advertising or publishing costs. The benefits that can be obtained through tokens created with blockchain technology are very extensive.

If you want to create a new business model using blockchain technology,

Request a consultation on related topics.

A brief look at P2E game examples

  • Axie Infinity: This game, released by Vietnamese tech company Sky Mavis in 2018, is one of the most successful P2E games. In Axie Infinity, players collect, breed, and raise fantasy creatures called Axies and engage in battles. While playing the game, players can acquire tokens (cryptocurrencies) called AXS (Axie Infinity Shards) and SLP (Smooth Love Potion), which can be traded for other cryptocurrencies or used within the game ecosystem.
  • Decentraland: Decentraland is a virtual reality platform based on the Ethereum blockchain network, launched in 2017. On the platform, players can create, explore, and trade virtual assets. The platform has a basic cryptocurrency called MANA, which players can use to purchase digital assets such as virtual land, wearables, and in-game items. MANA can also be exchanged for cash or used within the Decentraland ecosystem.

What is Blockchain?

Blockchain technology is a digital, decentralized, and secure system for storing and sharing information across the entire computer network. Transactions or records are stored in blocks that are linked together in chronological order to form a chain. This is where the name Blockchain came from. The decentralized nature of blockchain proves that a single institution or organization does not control the information. Rather, it relies on a network of computers, known as nodes, to maintain and update the digital ledger. This allows for a more transparent and secure transaction that is protected against fraud and tampering. Blockchain technology has many applications beyond cryptocurrencies, including supply chain management, digital identity (DID), and decentralized finance (DeFi), as well as social media (SNS) and games (P2E).

Key Functions and Advantages of Blockchain

  • Value Creation Using Tokens/Coins Tokens or coins are digital assets that represent value and can be used within a specific blockchain ecosystem. Tokens can be used as an exchange medium for goods and services, and can also grant access to specific content or locations by including utility features within the token. Non-fungible tokens (NFTs) can be used to record and store ownership of real estate, art, digital assets, and more. Companies can create tokens to establish an economic system. Tokens derive their value based on factors such as user demand, utility, token scarcity, and market preference. How these factors are controlled and managed can be crucial to raising significant funds, so it is important to collaborate with blockchain experts or tokenomics specialists.

  • Smart Contracts

    A smart contract is a self-executing contract that runs on a blockchain. Unlike traditional contracts, smart contracts are made up of codes that are automatically enforced between parties based on predetermined terms and conditions. Smart contracts follow this process:

    1. Agreement: Two or more parties agree to the terms and conditions of a transaction or contract.
    2. Code: The contract is translated into computer code that includes the rules, conditions, and results of the transaction.
    3. Deployment: The code is deployed on the blockchain, making it safe, transparent, and tamper-proof.
    4. Execution: When the conditions specified in the code are met, the smart contract automatically executes the agreed-upon action, such as a fund transfer, release of digital assets, or updating records.
  • Distributed Ledger A distributed ledger is a shared and decentralized database that is managed across a network of nodes rather than being stored on a single centralized server. In other words, blockchain technology allows for a distributed ledger where transactions are safely stored and updated across multiple nodes (computers), enhancing transparency, trust, and security.

Why P2E games and blockchain technology create a perfect harmony

Improved security and transparency through player ownership

Many users who first learn about P2E may not be familiar with the blockchain technology. Users who enjoyed traditional online games may have thought they owned in-game items or assets (game currency), but in reality, they did not. Game developers or publishers could control the server hosting the game, and game operators also could manipulate the game economy after the launch. Similarly, there have been cases where users’ acquired items or currency were rolled back due to DB management or server issues. Additionally, players often use third-party websites to trade in-game items and currency, which can lead to many cases of fraud.

However, with blockchain technology, these problems can be resolved using transaction technology. All transaction information is recorded within a block, so it cannot be modified or deleted. Through this function, users can view all transaction histories equally, and enjoy the game while being aware that transactions cannot be changed or deleted. In this process, game users begin to trust that the game economy is fair and that their assets are secure.

In P2E games where blockchain technology is highly implemented, NFTs carry the player’s information, providing true ownership of in-game assets. NFTs implemented with blockchain technology cannot be replicated or altered, which means users can play the game and make transactions based on their ownership without fear of fraud or manipulation.

Generating revenue and securing loyal customers with tokens and NFTs

P2E games enable players to earn profits directly by utilizing tokens (coins) and NFTs, which help them secure their loyal customers. Tokens are digital assets used as a form of utility in the game. In P2E games, tokens are used to trade in-game assets, receive services or upgrades within the game. Furthermore, players can acquire tokens by completing specific missions or tasks, participating in tournaments (PvP), or contributing to the game ecosystem.

NFTs have a different concept from tokens (fungible tokens). NFTs can be seen as unique digital assets that represent ownership of in-game items or goods. Rare items such as weapons, armor, and land acquired in-game can be made into NFTs, which can be traded on marketplaces such as OpenSea and Rarible because they were created using blockchain technology.

By introducing tokens and NFTs into the game, game developers can create new revenue streams and encourage players to spend more time in the game. For example, players will try to acquire tokens by completing in-game quests, using them to upgrade in-game items and registering upgraded items (NFTs) on external markets to monetize them.

This cyclical system encourages game users to become loyal customers by providing various ways to enjoy the game while earning the profits. Similarly, players will invest more time and money into the game ecosystem in order to acquire tokens and NFTs, increasing the likelihood of contributing to the game community.

Challenges and Risks of Implementing Blockchain in Games

While blockchain technology brings many benefits to the gaming industry, there are also several potential issues and risks to consider. Here are some of the main challenges:

Regulatory Issues

Using blockchain technology in the gaming industry can lead to such issues as money laundering, fraud, and consumer protection. Therefore, it is important to carefully check the regulations of governments and related agencies in each country before proceeding with the business. In some countries, P2E games may not be registered on the Play Store or App Store due to regulatory issues.

In particular, 2023 is known as the “year of regulation” in the blockchain industry, so both business operators and investors need to keep up with the industry trends and the regulatory status, preparing them in advance.

Technical Barriers

While everyone agrees on the transparency, high security, and added value creation through tokens and NFTs that blockchain offers, blockchain technology has high entry barriers for development. Since it is an emerging technology, there are a few experts, so finding them takes a lot of time and cost. and requires hiring experts, which takes a lot of time and cost. Many companies are still hesitant to adopt blockchain because they have not yet developed strategies to safely and efficiently build blockchain infrastructure such as the mainnet and smart contract development, as well as maintaining the value of tokens and NFTs.

Solutions

There are several ways to address these issues and risks and operate a successful business. First, to eliminate regulatory risk, it is recommended to partner with blockchain experts or specialized companies. Choosing a partner who not only has blockchain technology expertise but also knows the legal aspects and has references is important. Second, to overcome infrastructure development and technical limitations, it is recommended to use services such as BaaS (Blockchain as a Service). For example, Luniverse by Lambda256 allows users to create a chain (network) with just a few clicks on the console, create and distribute tokens and NFTs as desired without gas fees, and operate and manage them with various APIs provided.

With the NOVA update, Luniverse will provide node services and multi-chain APIs. Users can now operate important nodes for maintaining and operating blockchain networks with just a few clicks. This allows DAaps, including P2E games, to easily secure data and stability with fewer resources. In addition, game developers or DAap developers can provide greater flexibility and interoperability by connecting to multiple blockchain networks such as Ethereum and Polygon through multi-chain APIs.

Conclusion

P2E (Play to Earn) games are a relatively new and rapidly developing field in the gaming industry. As mentioned above, P2E games have clear and diverse advantages, but there are also challenges that must be overcome, such as regulations and technical limitations.

Since P2E games include a model of generating revenue within the game, there is a risk of players feeling like they are working instead of playing. As with many existing games, if game content feels like a chore or task, users will leave.

Similarly, if developers focus too much on technology and economic systems, game quality may suffer. If a lot of resources are spent on creating tokens and NFTs with blockchain technology and integrating them with existing systems, developers may naturally neglect the development of the game’s core story and content.

Ultimately, it is important for business operators to choose a stable blockchain service that can be operated with minimal time and cost, allowing them to focus on better decision-making.

If you are planning a business using blockchain technology, consult with an expert!

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