DeFi Revelations - PlayFi - Revelo Intel

DeFi Revelations – PlayFi

In this episode of DeFi Revelations which took place on June 18, 2024, Kirk from Revelo Intel hosted Ben and Jyro from PlayFi to discuss Web3 gaming infrastructure, the future of gaming on the blockchain, the economic and technical advancements in PlayFi, and more! Read our notes below to learn more.

Background

Kirk (Host) – Head of Business Development at Revelo Intel

Ben (Guest) – Contributor at PlayFi Gaming

Jyro Blade (Guest) – Product Lead at PlayFi Gaming

PlayFi Gaming –  a decentralized AI and data platform bringing web3 features to the world’s most popular games

Innovating Web3 Gaming: Ben and Jyro’s Journey

  • Ben says he was crypto-adjacent for many years, running a digital agency in Australia. After exiting his business, he had time to explore Bitcoin and Ethereum, which led him to dive into Web3 gaming and eventually build a Web3 gaming project where he met Jyro.
  • Ben explains that he loves the constant innovation and new ideas in the crypto industry, which he hasn’t found in any other industry. He mentions meeting some of the best and worst people but values the connections and friendships made through crypto.
  • Jyro says he has been in the crypto space since 2014 and has a professional background in game development in New York City. He loves experimental technologies and community engagement, making crypto a natural fit for him.
  • Jyro explains that early crypto times were focused on community-driven content, which he found appealing. Although the technology for Web3 gaming wasn’t there in 2014-2016, the last few years have seen significant advancements, making it possible to solve cool problems and create things people care about.
  • Kirk asks what compelled them to build blockchain infrastructure for gaming. Ben says PlayFi is an AI and data layer for mass market gaming, stemming from their own Web3 game development. They encountered technical hurdles that blockchain could help solve and found that indie and AAA games publishers faced similar problems.
  • Ben notes that there is a significant market for building competitions, tournaments, prediction markets, and data-driven creator economies on top of popular games like Fortnite. This untapped revenue potential spurred their interest in solving these problems on-chain.
  • Ben explains that the genesis of PlayFi came from solving problems they encountered in their own game development and recognizing the broader industry need for real-time data extraction from games to enable permissionless experiences. The openness and curiosity of publishers and studios about on-chain solutions further encouraged their efforts.

Bridging Web3 and Traditional Gaming

  • Jyro says there is a fallacy in the Web3 space that if Web3 gets good enough, everything will automatically move to Web3. He mentions that as a game developer, he believes this is false because no singular tech stack will capture the entire gaming market.
  • Jyro explains that game companies need more financial or logistical incentives to create user-generated content systems. He says that companies like Valve and Nintendo want people to engage with their games but do not open their systems for external development.
  • Jyro says PlayFi addresses this by capturing game data without developer integration or player effort, making it actionable for various uses like tracking speed run stats or managing tournaments.
  • Kirk asks about the cost implications of microtransactions in gaming and how technologies like ZKsync can help reduce these costs.
  • Ben explains that Web3 gaming recently hit 3.3 million monthly active users, indicating growth. He differentiates Web3 gaming entrepreneurs from players, noting that most players play for fun and community rather than financial incentives.
  • Ben highlights the importance of cost and real-time data for PlayFi. He says ZKsync allows real-time, affordable game data processing, which is crucial for the platform.
  • Jyro says that zero-knowledge proofs allow asking multiple questions on a blockchain without incurring multiple fees. This makes it cheap and fast, suitable for real-time data applications.
  • Jyro explains that end users won’t notice they’re paying gas fees, as the unit economics make it beneficial for everyone involved. For example, in a tournament with an entry fee, the costs are minimal, allowing organizers to profit while covering necessary fees.
  • Jyro mentions that PlayFi’s system abstracts costs for end users and makes operational costs manageable for organizers, ensuring a smooth and economically feasible experience.

Exploring PlayFi’s Economic Model: Revenue Generation and Token Incentives

  • Kirk asks about the economic model of PlayFi and how it generates revenue for the protocol and potentially for token holders.
  • Ben compares PlayFi to Uber, highlighting that they are building on top of an existing, vibrant market. He notes that PlayFi is like Uber in that it adds a convenience layer over an established service, increasing usage without needing to extract large fees from any specific game or audience.
  • Jyro explains the incentivization system within PlayFi. He says that $PLAY, the native token, will be used for anything related to data. Users who upload quality data will receive $PLAY tokens, and those who process and store data will also earn $PLAY tokens. 
  • He describes how modular nodes process and store data, converting extensive video content into concise text documents. The system rewards users for contributing quality data, processing it, and creating oracles to access the data.
  • Jyro envisions that many users will engage in all three roles: uploading data, processing and storing it, and creating ways for others to access it. This creates an ecosystem with high-quality, optimized, and accessible data, encouraging various entities to use the oracles and pay in $PLAY tokens.
  • Jyro mentions their collaboration with MultiversX, allowing external chains to access data from PlayFi’s infrastructure, further incentivizing the creation of high-quality data. The system rewards users proportionately to the quality and demand for their data, creating a continuous inflow of tokens.
  • Kirk asks about mechanisms to incentivize holding or staking $PLAY tokens, considering that $PLAY is being rewarded frequently.
  • Jyro explains the staking mechanisms. Node operators will stake both $PLAY and $ETH to settle down to the EigenLayer, with a staking and slashing mechanism to reward good behavior. 
  • The more a node operator stakes, the better their share of rewards. Additionally, there will be a delegation system where regular users can delegate their play tokens to node operators and earn a share of the rewards.
  • Jyro says that the average user will likely use $PLAY tokens for gas and delegation, while power users will cycle their tokens through the system to operate their tools. This setup encourages both active participation in the network and passive involvement through staking and delegation.

Bootstrapping Activity on PlayFi: Token Mechanisms and Go-to-Market Strategies

  • Kirk asks about the token mechanisms and go-to-market strategies for bootstrapping activity on the system.
  • Ben says partnerships are key and PlayFi is an aggregator of data from games, not a gaming chain. They focus on making data available to builders and have upcoming partnerships with chains having existing gaming ecosystems.
  • Ben explains that liquidity is a significant issue in gaming marketplaces, and PlayFi aims to address this by integrating DeFi elements, enabling liquidity for trading gaming assets. He notes that some publishers are interested in this aspect.
  • Ben adds that they anticipate speculative markets over in-game assets and are curious about how people will use the data provided by PlayFi.
  • Jyro explains that their system does not require moving assets onto the chain. Instead, PlayFi monitors asset ownership and tokenizes the action of transfer. This avoids the need for developer integration and maintains liquidity without tokenizing the asset itself.
  • Ben says that gaming often falls into the trap of over-engineering solutions. He highlights that PlayFi focuses on practical, fast, and cost-effective solutions that are meaningful in the context of gaming.

Unveiling PlayFi: Modular Nodes, AI Efficiency, and Upcoming Node Sale

  • Jyro explains that they have modular nodes, which perform various tasks such as processing transactions, storing data, and indexing, all divided into four main modules: zero knowledge, AI, coordination, and storage.
  • Jyro describes that storage modules store data securely, AI modules process and index data like video feeds, zero knowledge modules create and validate data fingerprints, and coordination modules manage communication between nodes and the base layer.
  • Jyro highlights the flexibility of modular nodes, allowing users to toggle specific functions based on system needs, like turning off AI processing to free up GPU resources.
  • Ben highlights that nodes as a service are crucial, and they plan to launch their node sale with partners to ensure they have enough nodes to process large amounts of data efficiently.
  • Ben mentions that they are focused on making their AI processing efficient, even running on CPUs without needing high-powered machines, differentiating their approach from large AI projects.
  • Jyro adds that they are doing small AI targeted at specific tasks, making their system hyper-optimized and elegant without needing extensive resources.
  • Ben states that PlayFi recently came out of stealth mode, has a Testnet live, and will have a node sale in July followed by a token launch later in the year.  
  • Jyro says that they are building partnerships with high-profile teams and organizations, highlighting the momentum and engagement they are gaining.  

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Show Information

Medium: YouTube (Video)

Show: Revelo Intel – DeFi Revelations 

Show Title: Revolutionizing Gaming With Playfi: The Ultimate Web3 Infrastructure For Top Games Worldwide!

Show Date: June 18, 2024