AMA Highlights - Skill2Earn and the future of GameFi on Zilliqa

Check out the highlights from our recent Skill2Earn and GameFi AMA with Matt Dyer and Tom Fleetham.

AMA Highlights - Skill2Earn and the future of GameFi on Zilliqa

In an industry often marked by fleeting trends and unsustainable models, Zilliqa is pioneering a new era of GameFi with a focus on building longevity and genuine engagement. 

The nascent world of GameFi, the combination of online gaming and decentralised finance, offers exciting potential but is haunted by the early failures of Play2Earn models for Web3 games.

Through exciting new projects like Web3War and The Winners Circle, Zilliqa is pioneering a radical new approach to Web3 gaming through the philosophy of Skill2Earn, a merit-based system that rewards gamers based on their skill and in-game performance.

To explore the potential of this new Skill2Earn model and what it means for the Zilliqa blockchain, Zilliqa Technology CEO Matt Dyer recently joined Head of Business Development for Sports and Gaming Tom Fleetham for a live AMA session with the community.

They covered everything from the sustainability of Web3 gaming models to how Skill2Earn will drive value and growth for the Zilliqa blockchain, and the session concluded with some exciting news about Web3War, the flagship Skill2Earn multiplayer first-person shooter powered by Zilliqa.

Check out all the highlights from the AMA session below:

A new, sustainable approach to GameFi

Tom kicked off the discussion with a look back at the initial approaches to Web3 gaming, dissecting their shortcomings and giving context for Zilliqa’s decision to take a new approach.

“When we look at the gaming and sports sectors from the previous bull run, we see they achieved great traction but had flawed models,” Tom said.

“If you look at Axie Infinity, the growth of that game was insane. You also had fan tokens, mainly through Chilliz and Socios, performing similarly. But those models did not prove to be sustainable, and there are various reasons for that.”

“We feel that we can take a different approach and create more sustainable models this time around,” he added.

Tom noted that building a sustainable economy for Web3 gaming centres around high-quality user experiences, utility, and fair incentives for engagement.

“The fundamental problem when it comes to Play2Earn is that all the players are rewarded just for playing. What that means is that if you stop bringing in new players, you're eventually going to run out of rewards.”

“We believe that fundamentally some players need to be net contributors to the game if you're actually ever going to create a sustainable economy,” he said.

Other issues created by the Play2Earn approach to Web3 gaming include the incentivisation of the use of bots to farm rewards. As the required interactivity from users is generally low, these games can attract an audience of automated programs, building the opposite of real engagement.

This problem can be solved through high-quality gameplay aimed at traditional gaming audiences and a requirement to demonstrate skill and in-game performance.

“If all you care about in the Play2Earn model is the rewards that are coming back, then the actual quality of the game doesn't matter - as long as it's passable and works, it's good enough,” Tom said. 

“Now we're seeing a new crop of Web3 games that put gameplay first and are much higher quality, but I think the jury is still out on what model works in terms of creating a sustainable Web3 game economy, and our solution to that is Skill2Earn.”

Skill2Earn drives utility and engagement

As demonstrated by Web3War, The Winners Circle, and other projects coming soon the Zilliqa blockchain, Skill2Earn is designed to encourage deep engagement through high-quality experiences and real utility.

Matt and Tom noted that as a more mature approach to GameFi, Skill2Earn can be the key to unlocking the massive potential market for Web3 gaming by focussing on interactivity and sustainable adoption.

“We believe that Skill2Earn will give fans more of an interactive experience and an incentive to dive deeper and learn more about the sport in question,” Tom explained. “If you're going to be incentivised to be a skillful fan, that is obviously going to lead to deeper engagement.”

“Skill2Earn allows you to create a sustainable rewards economy. We don't want to create a scheme that relies on new users to be joining all the time for the value to be maintained within the project.”

Tom added that this new approach also opens up opportunities that have previously not existed for players looking to break out into professional gaming. By allowing players to earn rewards based on their performance, Skill2Earn gives gamers a clearly defined way to start earning from their sport.

“If you look at the esports industry, there is not really any such thing as a semi-pro esports player. If you compare esports with traditional sports, it's very much an all-or-nothing situation and there's also no real defined path to becoming a professional gamer.”

“Skill2Earn can actually provide a place for aspiring professionals to start earning money from playing games, and I think that has the potential to be huge. I think there are plenty of gamers out there who would fancy themselves as particularly good at one game or another, and if they have the opportunity to earn rewards based on their skill, that is going to be really appealing,” Tom said.

Tom also noted that Skill2Earn is applicable to the fan loyalty space, as exemplified by projects like The Winners Circle, through imbuing fan tokens with real utility and giving users the ability to earn meaningful rewards based on their skill and knowledge of their favourite sport.

“On the sports side, the likes of Chilliz and Socios achieved big things in terms of the fan tokens and the partnerships they closed during the last bull run. But the real problem from a sustainability point of view, and from a fan's point of view, is that there is not a huge amount of utility associated with those tokens,” Tom said.

“It's not a particularly compelling experience to be a token holder of those fan tokens. There is also generally no way to earn the token so you are not really rewarded for being a fan.”

“Ultimately the only reason to buy and hold these fan tokens becomes speculation, and that's not really what fan tokens should be about, in our opinion,” he said.

In contrast to these initial models, The Winners Circle is leveraging Skill2Earn and the Zilliqa blockchain to drive passionate engagement from horse racing fans while rewarding them with exclusive access and unforgettable experiences.

Tom also teased that Zilliqa is exploring opportunities to bring this Skill2Earn engagement approach to fan token initiatives with its existing esports partners in future.

“We really want to show what ‘good’ looks like in terms of how we create a sustainable model for Web3 gaming and how we create fan tokens with genuine utility and the ability for fans to earn them,” he said.

Building value for the Zilliqa network

Matt contextualised the launch of Web3War and The Winners Circle, and elaborated on what the success of Skill2Earn means for the Zilliqa blockchain.

“There is a lot of focus around Web3War and what we've done there, but we also have The Winners Circle and the $HRSE token coming soon as well. It's not just one game that we're looking at - it's more of a holistic play around how we are approaching the market with Skill2Earn as a key differentiator,” Matt said.

“We are strong from a layer-one perspective in terms of the infrastructure we have in place, and we have a laser focus on and around the Skill2Earn mechanism that we feel drives sustainability.” 

“I think that narrative will attract a lot of people towards Zilliqa.”

The adoption of Skill2Earn projects running on the Zilliqa blockchain can also lead to a healthier ecosystem through boosting transaction volume and interaction with other decentralised applications or wallet providers on the network.

“The activity of Skill2Earn - things like playing against other people, staking your tokens as a function to get access to features - drives on-chain transaction volume and value for the network,” Matt said.

“Transactions, particularly around smart contracts, are where gas is burned, which fuels the trajectory of a layer-one network. As we have more projects building on Zilliqa that are being used by a large number of people, that is going to drive transaction volume on the layer-one, which in turn drives a deflationary mechanic.”

This growth of Skill2Earn projects comes as exciting new tools are being deployed on the network, making the blockchain more attractive to developers and users alike.

“Looking at what's happening on Zilliqa with the success of Web3War and various other teams building some cool stuff from a DeFi perspective, we are going to start to see a lot more liquidity being put into the ecosystem,” Matt said. 

“Beyond specific games or fan engagement platforms, this downstream effect of the success of our Skill2Earn approach is really exciting.”

The AMA session was closed off with a surprise appearance from Roll1ng Thund3rz co-founder and CTO Valentin Cobelea, who announced the launch of Web3War v3.0.

This latest release of the free-to-play Web3 multiplayer shooter marks the launch of its first seasonal content update, as well as the first implementation of Skill2Earn mechanics in the game, giving anyone the ability to earn rewards for proving their skill.

Ready to try out the first-ever Skill2Earn multiplayer game powered by Zilliqa? Head to the Web3War website to get started.