With SAGA All the Rage, Modularization + GameFi May Become a New Narrative in Crypto

TL;DR

Recently, SAGA was launched on Binance, and it saw a significant surge, attracting market attention. So what are the innovations behind SAGA? Further observation reveals that the combination of modularization and GameFi is becoming a new narrative in the crypto market. Besides SAGA, what other projects are worth paying attention to?

With SAGA so popular, what are the innovations?

Recently, SAGA was launched on Binance Launchpool, drawing high market attention. According to information released by Binance, only 4.5% of the initial circulation of SAGA comes from Launchpool shares, with 1.5% from airdrops, while ecosystem and foundation shares are negligible. Following its launch, SAGA saw a significant surge. So, what are the innovations behind SAGA? SAGA is a Layer 1 protocol that allows developers to automatically launch dedicated chains (Chainlets) that are compatible with different virtual machines, run in parallel, and are interoperable. Essentially, SAGA provides modular infrastructure, supporting developers in launching chains and scaling infinitely. The project has also collaborated with Layer 1 protocols such as Polygon, Avalanche, and Tia to expand its infrastructure on a larger scale. From a business model perspective, SAGA’s essence lies in distributing block space to downstream demanders, with a key issue being how to price it. SAGA adopts a unique “musical chairs pricing” mechanism: (1) Assuming there are initially a=12 validators, SAGA aims to select 8 for delegated validation; (2) SAGA selects a certain number of validators based on their staking rankings to enter the bidding process, for example, p=10, which eliminates validators ranked 11th and 12th; (3) The remaining 10 validators make bids, which are then ranked from low to high, with the top 8 selected as delegated validators, and the price determined by the highest bid among the 8 validators, eliminating validators 2 and 7, who bid $6 and $8, respectively, leaving 8 validators to agree on a price of $5. This mechanism may seem complex, but it achieves one goal: providing block space as cheaply as possible through an internal pricing mechanism (or effective pricing).

Modularity + GameFi becomes a new direction for crypto narrative

As of April 1, 2024, the incentive testnet Saga Pegasus of SAGA has hundreds of protocols, including 350 projects. Among them, 80% are games, approximately 10% are NFTs and entertainment, and 10% are DeFi. With its modular public chain characteristics, SAGA attempts to break through the public chain through GameFi. In addition to SAGA, modularization + GameFi is becoming a new narrative direction in the crypto field, and this article introduces several mainstream modularization + GameFi narrative projects.

GALA

Gala Games is a blockchain game development company founded in 2018, aiming to build a decentralized gaming ecosystem. Gala Games serves as both a game development platform and a game aggregation platform. Gala has established dedicated network nodes for system maintenance and security, providing decentralized computing support, transaction verification, and storage services for the gaming ecosystem. The entire gaming ecosystem operates on a distributed node network, rather than on centralized servers controlled by a single entity. The founder nodes of Gala provide power for the operation of the Gala ecosystem. Well-known games in the Gala ecosystem include Town Star, Spider Tanks, Mirandus, GRIT, Gala Music, Gala Film, and VOXverse.

RON

Ronin Network is developed by Sky Mavis, a game studio focusing on technology. It is an EVM-compatible chain designed specifically for gaming. Unlike previous Ethereum sidechains, Ronin aims to completely solve critical issues in gaming such as high Ethereum gas fees and slow transaction speeds, providing players with a smoother and more seamless gaming experience. In January 2023, Ronin released the desktop game aggregation platform Mavis Hub 2, followed by the launch of RON staking functionality in March, switching to a Delegated Proof of Stake (DPoS) mechanism in April, and upgrading the functionality of Ronin Wallet. In May, the NFT marketplace Mavis Market was launched (integrated with Ronin Wallet), and in September, the chain game project Pixels migrated from the Polygon network to the Ronin network (also indicating further expansion of the Ronin partnership program). In October, the Lucas (v2.6.2) upgrade and Shillin hard fork were announced on its mainnet, and in November, a partnership was reached with the Korean game production company ACT Games, which plans to migrate all its games to the Ronin network. In December, partnerships were reached with globally renowned game studios Foonie Magus, Directive Games, Bali Games, Tribes Studio, and Bowled.io, further expanding the gaming ecosystem of Ronin.

ARB

Arbitrum is currently the largest Layer2, and it is building a new narrative of Layer3+GameFi through Orbit. Orbit is part of the Arbitrum stack, allowing anyone to launch their chain on Arbitrum One or Nova without permission, similar to the OP Bedrock stack, which is akin to the functionality of a modular public chain, enabling one-click chain deployment. On the evening of March 27, the Arbitrum Foundation announced a collaboration with popular NFT brands Azuki and Weeb3 Foundation to create a Web3 network AnimeChain that attracts anime fans. In addition, projects building L3 based on Orbit include XAI, Apechain, Cometh, SyndrHQ, polychainmon, and meliorafnd. Essentially, SAGA belongs to the modular crypto narrative direction of Layer1+GameFi, while Arbitrum Orbit’s Layer2+GameFi follows a similar approach. GALA and RON belong to dedicated game public chains, with relatively high game quality and professionalism. Overall, the development strategy of public chain + GameFi is becoming a new narrative in crypto.

How will GameFi break through this bull market cycle?

The GameFi industry has been in development for many years, evolving from the initial simple CryptoKitties to the explosively popular Axie during the last bull market. With the introduction of high-performance public chains such as SAGA and RON, the underlying infrastructure of GameFi is gradually maturing. So, how will GameFi break through in this cycle? DAW may be the most promising development direction at the moment. DAW (Decentralized Autonomous Worlds) is a type of game that is fully on-chain, open, and without pre-set gameplay. By providing a publicly accessible programmable interface, players can freely create, enhance, and expand their gaming experiences within the boundaries of this digital physical reality, further expanding the storyline of the game. In Web2, a typical example of a sandbox game is “Minecraft”. Currently, DAW is still in the early stages of development, and one notable project in its brief development history is OPcraft. In October 2022, OPcraft, a fully on-chain 3D Minecraft-themed game created by the Lattice team, was launched. In OPcraft, a set of simple rules was established. Players can only perform four in-game operations, including destroying blocks, crafting blocks, placing blocks, and claiming a 16 x 16 plot of land (becoming the highest diamond staker of that block). In just two weeks after its launch, it attracted over 1,500 participating players and over 3.5 million on-chain records, sparking various user-generated pixel art, individual player-made plugins, as well as a series of spontaneously formed competitions, gaming activities, and community governance activities, and even some malicious and friendly player behaviors.

Conclusion

In summary, SAGA’s Layer 1 + GameFi and Arbitrium’s Layer 3 + GameFi have similarities in concept, both projects are technically oriented towards GameFi; GALA and RON, on the other hand, are more similar, focusing on the development of Web3 games, and later delving into public chains based on gaming needs. However, the overall direction of these two categories is essentially the same; modular GameFi in the future is expected to become the primary narrative in the crypto industry.

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