Web3 is a software development framework that allows integration with a blockchain. A blockchain provides a verification layer, which can store data immutably without the control of a central authority. It is non-trusted and non-intermediated, so it is less prone to manipulation and censorship.

The benefits of this are to help establish a proof, like ownership of a digital item that is recorded on a public decentralized database without the need for an intermediary. This can be a fair and transparent way to validate data, that is not influenced by a single entity but through a distributed consensus mechanism.

Web3 can provide new features to gamers that are unprecedented, so their introduction to games are a disruption to the market. This can help in resolving issues in gaming. Here are some of the main features that can transform the gaming industry.

Ownership

In conventional games, the platform can suspend a gamer’s account and delete their data for whatever reason given in terms of service. This is because the gamers do not own their data on conventional gaming platforms. With the blockchain, gamers can keep the items they generated from the game without relying on another party. This makes ownership the main feature of Web3 for gamers.

In Web3, blockchains help gamers establish the ownership of their in-game assets. If a user claims to own a rare NFT (Non-Fungible Token) that they earned from playing a game, the blockchain can verify this as fact. This helps to reduce counter claims since there is recorded proof of ownership. Conventional games do not have a non-trusted verification system, since it is mostly based on trusting the platform. The problem arises if the platform refuses to recognize a claim of ownership to an in-game asset.

With Web3, gamers can own their in-game assets and take custody of it.

If the platform suddenly closes, it can also purge any items that a gamer owns from the platform. By having a blockchain, the asset can survive even if the gaming platform is no longer in operation. A blockchain also offers cross-platform use of digital assets, so they are not lost forever.

It is important to note that the blockchain is for verification, but not for the enforcement of the legality of ownership. This means that counter claims can still be made by another party, and it will still depend on the court of law to determine who is the rightful owner. With verification on a blockchain, it can provide a settlement if the court can see that it is evidence of undeniable proof.

Transparency

Web3 brings more transparency of asset ownership, transactions of in-game purchases, issuance of rewards and verified randomness. This is so crucial in the gaming industry because of integrity and fairness. It is important to make sure that gaming platforms are not cheating gamers and that they are correctly distributing rewards to the gamers. A blockchain can be a way to ensure fairness in this regard.

Chainlinksmart contracts on the blockchain provide transparency by using decentralized verification of randomness which can be used in gaming. It is open to the public to show fairness.

An example of a problem in gaming that needs more transparency is online gaming sites that offer gambling. In the past, some sites have been caught in cheating scandals. Fraud in the gaming industry is challenging because gamers are losing from rigged systems that do not offer genuine randomness. With Web3, gamers play games that can use random number generators that use the blockchain for verification.

Decentralization

Decentralization helps to prove fair and credible data for gamers by using a non-intermediated network of validators. Gamers can benefit from this feature when they record the data on a blockchain to make valid claims to reward earnings. If the claim is verified on the blockchain by the network, then the platform must issue a payment and cannot overturn the validity of the claim.

Since Web3 is decentralized, it can bring gaming platforms independence from a centralized authority. Gamer’s data are secured by cryptographic means on a decentralized network that is censorship resistant and tamper proof.

This was designed to allow transactions to be peer-to-peer (P2P) without the need for an intermediary to transfer value. In this case, when gamers record data they are creating a proof that requires a network fee which is the value being transferred in order to process the data.

Decentralization does not require a central authority. It can be peer-to-peer or allow users to directly transact with one another without permission from a third-party making it less prone to manipulation.

The actual content for in-game assets can also be stored on a decentralized network. Protocols like IPFS provide storage that is not based on a single platform. It is distributed across various storage systems that are hosted by participants who are incentivized to store the content. Gamers will not lose or get their content confiscated as long as they have it secured on a blockchain.

Self Sovereignty

Gamers are given the freedom to move their assets to other platforms with cross-platform interoperability. That means that with Web3 support, gamers can transfer in-game assets across various blockchain-based games. For example, a gamer who earned or purchased a skin in one game can use it on another game that is compatible.

With an NFT, gamers can create self sovereign profiles where they can use their digital assets across different blockchains through cryptographic authentication.

Self sovereignty provides gamers with full control of their assets. An NFT can be minted to represent that as a form of authentication so gamers will not need permission from the platform they are playing on to transfer what they own. Gamers will have complete custody of what they own and this means full authorization to transfer assets on any platform they choose.

Incentivization

The use of incentivization brings a new dimension to gaming. While conventional games are mainly enjoyed for entertainment, Web3 games offer the same but with the addition of earning income from playing a game. This is different from monetization in conventional games (e.g. mobile game monetization), since Web3 offers not just purchasing in-game items but also earning with the use of cryptocurrency.

An attractive feature that Web3 brings into gaming are incentives in the form of tokens. Game developers can add this feature to new or existing titles using an SDK (Software Development Kit). This seamlessly plugs software modules with blockchain functionality into games, which can simplify and speed up development.

Incentives can be offered in the game in the form of rewards for accomplishing levels and winning challenges. Since gamers are incentivized, this can attract more players to Web3 gaming ecosystems. An example of this is Play-to-Earn (P2E) gaming platform Axie Infinity, which has seen tremendous growth in its ecosystem.

One thing that incentivized Web3 gaming can bring to developers is loyalty. The benefits of rewards can earn developers more gamers to their platform, and this can be used to build loyalty programs. With rewards developers can grow their user base and increase revenues.

CryptoBladesis an example of a P2E game where gamers can earn from playing.

Gamification

The intersection of gaming with DeFi (Decentralized Finance) opens up new opportunities for gamers. Gamification or GameFi not only allows gamers to earn, but also to participate in crypto financing protocols like staking, lending and liquidity pools. These are the counterparts of financial instruments used in traditional finance.

With Web3 games, gamers can get exposure to DeFi protocols.

The use of GameFi is rather risky. It is interesting in the way developers can integrate these protocols in games. The risk is that it can be like gambling if gamers get careless with their money. It is all recorded on a blockchain, so it is not hard to help verify claims but it can also show if you are losing money.

Digital Governance

With the introduction to tokens, comes digital governance. This was introduced with third and fourth generation blockchains that followed Ethereum (e.g. EOS, Tron, Binance Chain). This will allow Web3 gamers who hold tokens to participate in voting new policies and developments on the gaming platform they are a part of. A token can represent a vote, but it all depends on how the gaming platform implemented their voting system.

Gamers can vote by holding a certain amount of tokens in a voting smart contract. When a proposal is sent, the gaming platform can hold a vote among its community of token holders to determine whether to implement new things to help the platform. With traditional gaming platforms, this is not the case since the decision making is concentrated with the board of directors or top management without consulting the gamers.

Synopsis

In gaming, the use of Web3 can be significant in many ways. It can help gamers to establish their ownership of in-game items or assets that they purchased. That means they are in full custody of those items, and not the gaming platform, allowing them more control and rights to digital content. Since it is recorded on an open decentralized system, it also offers more transparency to help provide fairness.

That also means that even if the gaming platform were to close due to certain reasons (e.g bankruptcy, server crash, system hack, etc.), gamers will still have custody of their in-game items since Web3 makes them independent of the gaming platform. Gamers get to keep the in-game items like skins, powers, weapons and rewards and transfer them to other platforms.

Web3 also gives gamers privileges that allow them to participate in digital governance. This concept is what helps democratize gaming, allowing for community-driven decision making backed by the use of tokens. Gamers can actually vote policies to help determine the future of their gaming platform.

While these features appear good in theory, it will be up to the gamers and developers to decide if this is beneficial. Web3 can address so many issues in gaming, but in practice there are still things that need to be ironed out. That includes regulatory clarity regarding cryptocurrency and further adoption in order for Web3 games to grow. This can help to shape the direction of the future of the gaming industry.