In the constantly evolving digital entertainment world, the emergence of Web3 gaming is a unique sign of innovation and opportunity. Combining the engaging experience of traditional games with the decentralized power of blockchain technology, Web3 games are changing how we interact with and explore virtual worlds.

I asked Sebastien Guillemot, co-founder of Paima Studios and dcSpark, to share his vision of the web3 gaming industry to provide a better understanding of the intersection of blockchain technology and gaming, as well as to explore the evolution of gaming in the decentralized era.

Q: Web3 games are a relatively small industry with huge potential that is still developing. What was your impetus for choosing this area?

The concept of layer 2s (“L2s”) has unlocked a lot of innovation. People can create new environments without being limited to the EVM while still inheriting security and market access compared to launching a new L1. However, it was also clear liquidity would be a big problem: what would motivate people to bridge to a new L2 (beyond lower fees)? Unless an environment provides a 10x improvement over other layers, liquidity will be sticky and not migrate over. We felt that in this environment, use cases that depend less on institutional-level liquidity (such as gaming) were poised to thrive, and that’s why we started pioneering gaming L2 technology 2 years ago at Paima Studios.

Q: Can you share an overview of the current state of the Web3 gaming industry and its development trajectory? What do you see as the most promising aspects of Web3 games compared to traditional gaming experiences?

Currently, most games live in a web2.5 world — that is to say, using a mix of centralized servers and using web3 environments purely for the tradability of in-game assets. This setup has thrived because it already enables commercially successful projects without the engineering complexity of building an application in a fully decentralized manner. However, this setup is only a half-measure. You only get partial composition (only of game assets), you only get part-ownership (game shutting down still means you lose everything), and a lot of games that don’t walk this fine line carefully end up inheriting the worst of both worlds. Within this, fully decentralized games have been quickly growing in interest as a way to lean fully into the web3 benefits.

Q: You are the co-founder of Paima Studios, can you tell us more about the project, its key features and benefits, and how it came to be?

Paima Studios is a game studio founded 2 years ago to not only build fully decentralized games but also build a modular gaming rollup framework to enable anybody to build these kinds of games as well. We’ve deployed multiple games to mainnet using our technology such as our latest game Tarochi (an onchain RPG game) and multiple other companies are leveraging our software for their development as well.

Q: You are also a co-founder of dcSpark, a crypto ecosystem developer. As a co-founder, you are involved in the creation of ecosystems in the crypto space. How do you see blockchain games contributing to the broader crypto ecosystem, and what role do you see them playing in the future of decentralized finance (DeFi) and non-fungible tokens (NFTs)?

We see games as a key driver of initial use cases for cutting-edge software such as zero-knowledge cryptography (ZK). For example, Zeko (our ZK rollup framework written in partnership with o1Labs and Mina Foundation) is usable for multiple different use cases from DeFi to RWAs, but we’re also putting a large focus on gaming by connecting Zeko as the first ZK layer to Paima Engine.

Q: Navigating the intersection of blockchain technology and gaming requires a deep understanding of both industries. How do you approach bridging the gap between these two worlds, and what opportunities do you see emerging from their convergence?

Gaming, unlike DeFi where institutional players who can provide large liquidity are often key, depends on a large set of active players. This requires the ability to iterate fast based on user feedback (most games have to be updated every week to stay relevant) and active communication with the community. Members of our team have many years of experience building core blockchain protocols and are fans of gaming as well, so a lot of it has been merging those two passions.

Q: Community engagement is vital for the success of any gaming project. How do you cultivate and support a thriving community around your gaming projects, and what strategies have you found to be most effective in fostering long-term player engagement?

Transparency in the building process is key. People understand that web3 games have some complexity to them (especially if the full game is decentralized), but a lot of people are very excited about the technology so transparency on technical progress is a lot more important than in web2. Additionally, if a game is fully decentralized, it means that at the end of the day, the community is the one that decides the tokenomics and so having the community provide feedback and brainstorm on tokenomic ideas helps make everyone feel they are part of the building process.

Q: What unique opportunities do Web3 games offer to both players and developers? Can you tell us more about the potential benefits of Web3 games for players in terms of ownership and monetization?

Beyond the ability to trade in-game assets, it also empowers players to have more of a voice in the direction of the game, and it allows developers to start making contributions to the game and be financially rewarded for it even if they are not part of the initial team. Most web2 games that have tried to be open-source games eventually fall flat due to the natural centralization around a core team that has to manage the servers, triage the issues, process FITA payments, and more, and we believe web3 games can allow open sources games to thrive where web2 games have failed.

Q: Do you think there is a need for a connection between Web3 games and other new technologies such as virtual reality (VR) and augmented reality (AR)? Can their integration improve these technologies?

Although I do not think they are required, I think the integration is a desirable end goal. I think one of the types of games that people resonate the most with when it comes to whether or not they should be decentralized is games that have social interactions at their core. For example, if future human interactions happen in the metaverse, I think it would not be ideal if it all happened in a centralized environment such as Meta’s metaverse called “Horizon Worlds”, and we would be better served by a decentralized platform.

Q: Web3 technologies are constantly expanding their capabilities. One of the most secure and convenient authorization methods is Web3 authentication. It is used not only in web3 games but also by some of the leading cryptocurrency companies such as OKX, WhiteBIT, Bybit, etc. What are the main advantages of Web3 authentication for compatibility and cross-platform integration between different gaming platforms and Web3 services?

Many startups have tried to leverage web2 authentication as the root of trust for creating crypto wallets (especially in gaming). Although this works to a certain extent, it often causes cascading composability issues. For example, if the provider for creating wallets from an email used by the game is different from one used by an NFT marketplace, then the two platforms may generate different web3 wallets from the same web2 account, leading to user confusion and frustration.

I think we have already seen the potential of web3 authentication services, and I’m excited by many people working on everything from core protocol changes to blockchains like Ethereum to new products that help improve the user experience, lower costs and improve interoperability.

Q: Looking ahead, what do you think will be the most significant trends or achievements in the field of web3 games in the future?

I think ZK is the current main trend for gaming, with many projects realizing that gaming is currently one of the main drivers of interest in many ZK platforms, such as Starknet and Mina. ZK enables not only easier proving of the game state but also helps move a lot of the calculation into the user’s local machine, which helps a lot with scalability when it comes to the large player counts that games have to support.

Q: Finally, what advice would you give to aspiring entrepreneurs and developers looking to enter the web3 gaming space, based on your own experiences as a co-founder of both projects?

Right now in the decentralized gaming space, a lot of teams are still focusing on iterating on proof-of-concepts and hackathons. It’s a great time to get involved even if you don’t want to commit to making it a career choice, and still has a lot of room for commercial projects to come in as early adoptions.