This is a no brainer for me, if its even achieves 25% of its goals, user base will 1000x.
Setting the seeds early, incentivising builders is so important, you have passionate changemakers looking to drive this. The controls and oversight look reasonable with venture/gaming expertise, nothing is perfect but as a framework its logical and more or less there.
I can’t see a better way of doing this and need to be done sooner than later. Arb needs to compete with the other chains who have already at advanced development stage of a number of titles.
Will share a more fulsome response and comments here but flagging early that we plan to host an open office hours / community discussion to chat about the proposal: https://x.com/Treasure_DAO/status/1767985862774571260
When?: Fri Mar 15 at 1pm ET Who?: @karelvuong, @Djinn, @Soby, Lucas (Helika), Franklin (Pantera), and some others
Title: Xai Games: Revolutionizing Gaming with Web3 Technology on Arbitrum
Introduction:
The gaming industry is on the brink of a revolutionary transformation with the integration of Web3 technology and blockchain solutions. Among the key players driving this evolution is Xai, a layer-3 scaling network developed on top of Arbitrum, designed to empower gamers and developers alike. With its innovative approach, Xai aims to streamline in-game asset trading, enhance user experiences, and broaden accessibility to blockchain gaming for traditional gamers. This article delves into the significance of Xai Games (layer 3 - Arbitrum) and its native token XAI in reshaping the gaming landscape and why this intersection of gaming and blockchain technology is poised to make a profound impact.
Empowering Traditional Gamers:
Xai opens the door for potentially billions of traditional gamers to participate in open trade within their favorite games without the complexities associated with crypto-wallets. By leveraging Offchain Labs’ expertise in developing Arbitrum technology, Xai ensures scalability, efficiency, and cost-effectiveness, essential for mass adoption among gamers accustomed to seamless experiences. This democratization of in-game asset trading not only enhances user engagement but also fosters a sense of ownership and value within gaming communities.
Revolutionizing In-Game Transactions:
Traditional gaming ecosystems often struggle with scalability and cost inefficiencies, hindering the seamless exchange of in-game assets. Xai addresses these challenges by offering a dedicated layer-3 network built on top of Arbitrum, optimizing transactions for speed and affordability. Through AnyTrust technology, Xai can handle a high volume of transactions at minimal costs, making it an ideal solution for both game developers and players. Moreover, Xai’s commitment to security ensures the protection of valuable in-game assets, instilling trust and confidence among users.
Customized Solutions for Web3 Games:
Xai’s integration with Arbitrum’s layer-2 solution enhances scalability and efficiency, while its layer-3 architecture allows for customizable optimizations tailored to the unique needs of web3 games. Game developers can fine-tune parameters to optimize network performance, ensuring seamless gameplay experiences for users worldwide. With the support of Ex Populus, an experienced game development studio, Xai is set to introduce groundbreaking games like Final Form and LAMOverse, showcasing the potential of blockchain technology to revolutionize gaming experiences.
The Future of Gaming with Xai:
As Xai prepares to launch later this year, it promises to usher in a new era of web3 gaming, characterized by scalability, interoperability, and immersive experiences. By leveraging Arbitrum’s technology and Ex Populus’ expertise, Xai is poised to redefine the gaming industry’s landscape, attracting both early adopters and traditional gamers alike. With a focus on user-centric design and seamless integration, Xai paves the way for the widespread adoption of blockchain gaming, unlocking new opportunities for developers and players worldwide.
Conclusion:
In conclusion, Xai Games represents a pivotal advancement in the convergence of gaming and blockchain technology. By leveraging layer-3 scaling solutions on Arbitrum, Xai empowers traditional gamers with seamless access to decentralized trading within their favorite games. With its focus on scalability, efficiency, and user experience, Xai is poised to revolutionize the gaming industry, offering a glimpse into the future of web3 gaming. As Xai prepares to launch, the possibilities for innovation and growth within the gaming ecosystem are limitless, marking a significant milestone in the evolution of gaming technology.
First, it’s great to see the GCP formally published to the forum. Huge thanks to Dan (@Djinn) for his leadership and initiative here. Gaming is near and dear to our hearts at Treasure and I was excited to help co-author this proposal.
Having contributed to this proposal, I’m of course supportive of the overall direction and, on behalf of the Treasure ARC, we will be voting FOR it when it goes to Snapshot.
We believe that a program like the GCP was sorely needed yesterday. Now is better than never and the GCP will help Arbitrum and all of the games, ecosystems, and projects that orbit it secure the lead across the web3 gaming landscape.
However, changes/improvements should be made to launch a program that can truly catalyze gaming on Arbitrum. We’ve got a massive opportunity to do things right and do things well. This needs to move quickly while at the same time help stand up a long-term, sustainable structure that can continue to grow gaming on Arbitrum for many years to come — after we’ve had major gaming hits start to emerge from the early seeds we are sowing through the GCP.
These comments are mostly my own with additional thoughts/perspectives collected from the Treasure core contributors as well as the Treasure DAO’s Arbitrum Council (ARC).
Background & Select Responses to Comments
The key goals for the GCP (in my opinion):
On top of the primary KPIs outlined ^, we should also orient around these themes:
Arbitrum should be the leader in gaming but we need to invest and move quickly so as to not risk losing the race (both a sprint and a marathon).
We need to see more games, more builders, more gaming ecosystems, and greater adoption of Arbitrum technology (L3 and Stylus) come out the other side of the program. We should see hits emerge, games progress between stages within the development lifecycle, and we should double down on those showing signs of success and traction in an industry that is primarily hits-driven.
The GCP should build and improve upon the STIP and LTIPP as a differentiated and gaming-centric program that can address earlier DAO-governance inefficiencies we’ve faced while also propel a flywheel that can reinvest in and further gaming on Arbitrum.
There is a noteworthy gap in gaming expertise and focus within Arbitrum across the various grant/incentive programs that have been run since the DAO’s inception as well as within the delegate body. This is an opportunity to expand the network and grow the pie of developers, publishers and builders, while also providing additional ammunition to those who can start running right away and drive results. Just as DeFi on Arbitrum has had the opportunity to in late 2023.
About the market and competitive landscape
Speaking from Treasure’s perspective, we’ve been on the front lines in this “shadow war” that has been forged behind the scenes to acquire game developers and studios. This has spanned several years in close collaboration with both Offchain Labs and the Arbitrum Foundation both pre- and post-decentralization as we work to acquire builders to come not only to Treasure but also to Arbitrum.
This was detailed in the educational post but there are a number of competitive ecosystems and networks ranging from Polygon (Immutable), Optimism (Base), Ronin, Avalanche, Oasys, …, the list goes on. To-date, they have been better coordinated with generally more agency and capital that has been put into the hands of the associated foundations or labs entities. Arbitrum is lacking this due to its decentralized nature by design. Thus far, Arbitrum has relied on its clear technology and innovation lead along with its small (but mighty) partnerships team at Offchain Labs and the Arbitrum Foundation, as well as a number of gaming ecosystems to help scale and carry the business development effort (including Treasure).
The reality today is that many of these other ecosystems are going after games and gaming projects on Arbitrum. Aggressively. This recently happened via Treasure with Optimism, zkSync, and SKALE publishing public proposals to bring the Treasure Chain over to their ecosystems. This also happens behind the scenes with many of our games as well who we’ve spent time, capital, and energy to fund, develop, and grow over the past few years. A similar story is echoed by @0xgb.eth from Footium as well as @divdaurres from The Beacon.
As much as we would like to say that we’re primarily competing with the likes of the Blizzards, Nintendos, Epic Games, etc. of the world, Arbitrum and its associated ecosystems are competing mostly within the much smaller web3 space on top of the traditional games market while attempting to change the narrative and shift the negative stigma that traditional gamers have when it comes to crypto/web3/NFTs.
Why the Council and Catalyst Team structure
(I’ve renamed Venture Team to Catalyst Team which I expand upon below.)
This structure does not lead to unnecessary bureaucracy as others have suggested. If done well with the right team (and this is the important part), it has the power to greatly scale the DAO, reduce the load on delegates, and bring in experts into two symbiotic groups who have different, important roles to play within the GCP. Also introduces necessary entity/legal protections that are insufficient for a DAO-elected council (given the amount of capital being proposed).
The Council represents the broader Arbitrum DAO to the Catalyst Team, lends credibility, advisory expertise, and network access (assuming they comprise a bench of gaming experts), determines the RFPs for necessary game infrastructure, and keeps the Catalyst Team accountable.
The Catalyst Team handles the day-to-day of grant/deal assessment, due diligence, and fund disbursement. They should be deeply knowledgeable about game development, grants, and/or venture as the core team driving much of the grant and deal making process.
As a member of one of the largest Arbitrum DAO delegates and someone who had to assess over a hundred STIP applications while also sitting on the LTIPP council with ~170+ applications to review, these council/committee structures are a godsend that reduce the burden for the DAO’s delegates. As evidenced by the LTIPP and other subgroup / council programs that have emerged not only within Arbitrum but elsewhere, we should scale the DAO by placing responsibility onto those who have the experience and who have earned the trust to represent the DAO and its stakeholders (while maintaining measures in place to change the bench as needed).
Feedback on the Proposal
RE: General Structure
Extend Snapshot Timeline: Push to Friday, March 15th at 5pm PT
In order to elicit more feedback from the DAO community and continue educating and socializing the revised proposal with the delegate body, we should add a bit more time to discuss.
Treasure will be hosting an open community call on Friday, March 15th at 1pm ET to discuss the proposal with Karel Vuong (Treasure and co-author), Dan Peng (Vela and co-author), Soby (XAI), Lucas Fulks (Helika), Franklin Bi (Pantera), Andrew Green (Storygrounds and ex-a16z + gaming executive), and others who will share perspectives on the GCP as Arbitrum builders, gaming leaders, and VCs. We hope to see other delegates, game builders, and other stakeholders in attendance.
Rename the Venture Team to the “Catalyst Team” and be more explicit throughout that grants are part of the equation
As mentioned above, I don’t believe “venture” well captures the intended role and focus of the team. The GCP extends beyond venture to include developer grants and other incentive mechanisms focused on gaming.
Not all deals should be venture deals so early into the game (no pun intended!). Catalyzing growth of gaming on Arbitrum extends beyond making 10-100x deals to return the fund. Informed bets should be made via grants in the spirit of increasing the builder/developer/studio presence on Arbitrum, driving long-term alignment to ensure game/studio player growth leads to Arbitrum growth, strengthening Arbitrum’s brand as the defacto home for web3 / on-chain games, and proliferating the adoption of its leading technology.
My fear is if we over-index on venture-like deals and do not provide builders with an easy path to more agile/rapid grants that Arbitrum will lose out on deals. Many of the other ecosystems out there do not ask for explicit, financial return on investment and are more than willing to partner without requiring builders to give equity/tokens up and are happy with other alignment models (exclusivity/commitment period, subsidies based on traction, etc).
The Catalyst Team should comprise professionals who, at minimum, can drive (i) venture or commercial deals (equity/token, rev share, etc.); and (ii) fast-track grant funding. Other alternative types of incentivization and investment models should also be explored.
RE: Builder/Publisher - Funding Guidelines
Eliminate the division of capital (over/under 500k) for grants and leave it more open ended
While I agree there should be a faster track path to grant funding, the arbitrary < or > 500k mark creates restrictions that may raise or lower the barrier of approval (ie. could see 50 good projects requesting 499k vs. 3 mediocre projects requesting 501k)
The Catalyst Team should instead have the ability and flexibility to assess on a case-by-case basis to offer grants or strike commercial agreements with teams
Remove the Arbitrum Foundation’s formal role in the grants process above ^
Beyond playing a supporting role in the program (providing help via business development, partnerships, and deal flow or advising on legal structuring), the Catalyst Team being hired should handle this and maintain a degree of separation from the Foundation
There should be a size limit to grant distributions on a per deal basis for game dev grants
While it’s still early and hard to generalize without deal-specific context, we should set a [US$10m] size limit per deal (possibly even less than that)
More is not often better and this enters into the territory of late-stage investing / M&A and possibly overspending on deals which I do not believe aligns with the overall goals of this program (recall: to catalyze gaming as the first program of its kind within Arbitrum)
Minimum capital contribution by publishers in deals is positive and could be further expanded
Publishers should absolutely put skin in the game and not look for the DAO to fully fund deals.
Within this, there should be additional provisions to allow the Council or Catalyst Team to assess contributions on a facts/circumstances basis to provide greater flexibility.
Speaking of capital contribution, some of the comments seem to misunderstand the minimum capital contribution and difference between publishers vs. builders
Define “Publishers” and “Game Builders” (game developers, studios, and builders)
Make it clearer that independent Game Builders do not have to put up any minimum amount to access funds, this is specific only to publishers who, themselves, are looking to acquire and partner with Game Builders themselves.
Allowing publishers to request an allocation out of the infrastructure bucket
The lines are blurred between ecosystems/publishers who are also infrastructure/technology/protocol builders as the “job” goes well beyond simply finding and bringing in games as extensions to BD/partnerships for Arbitrum. It can also spans distribution, advisory, fundraising, game design, development, QA, localization, and much more.
In Treasure’s case, we are building decentralized infrastructure for next-gen gaming through an end-to-end ecosystem of game development support spanning the full spectrum of infrastructure including a native chain (L2), Infinity Chains (L3s), marketplace, AMM, LiveOps, APIs/SDKs, analytics services, and more as outlined in our litepaper.
In XAI’s case, they’ve innovated to create a new node primitive through their Sentry Nodes (which net them 12,897 ETH through their node sale).
RE: Next Steps & Timelines
The timeline for when capital will begin to flow should be spelled out
While the “Next Steps” section captures the program initialization and administrative steps well, it does not make it clear when builders or publishers can expect to access or tap into the allocated funds. With the added layers (Council, Catalyst Team, publishers), there should be a more explicit timeline and structure for how funds can begin to be unlocked and allocated
Take this example - the Council and Catalyst Team have been fully assembled and stood up, and grant applications and RFPs have started to be posted by May 2024. Past this, there is no stated timeline for when deals will begin to be made
The STIP, Backfund, and LTIPP made it clear for builders and applying projects as to when incentives would be granted, and the GCP would benefit from something similar.
The council composition is important, an election shouldn’t be rushed, and the council needs to reach beyond the Arbitrum DAO pool of candidates
The council needs to comprise a diverse panel of professionals who are knowledgeable about gaming (on both publishing-side and development), web3, and ideally also familiar with Arbitrum.
We should incorporate more flexibility in the timeline and election process that doesn’t leave Arbitrum and the GCP with a feeling of, “well, this is everybody who applied in the two weeks we had and we kinda have to pick five of them”.
There needs to be active recruitment by the DAO to convince highly qualified council members to apply because the people we will want are likely not here reading our forum posts or participating in these discussions (yet).
RE: Budget
200m ARB is proposed to be earmarked but probably shouldn’t be spent in 1 year
This figure was used to turn heads and be market competitive with other similar initiatives out there employed by other ecosystems. However, it’s unlikely that all of that will (or should be) spent in year 1 or even over the 2 year term that the GCP is contemplated.
We should consider committing to funding being unlocked and available within four 6-month timeframes (25% unlocking). Should the Catalyst Team need to unlock capital earlier, it should be presented to the Council (or the DAO).
Allow for greater flex in budget between builders (A) and infrastructure (B)
Incorporate flexibility into the buckets to allow for grant priorities/flow to evolve over time and not be limited by bucketed capacity constraints (or force spending that may be later deemed unnecessary) - ie. on a total 200m total budget, bake in a 15% overallocation:
160m games → target 160m but up to 184m
40m infrastructure → target 40m but up to 46m
Total budget hard cap remains at 200m
Council to maintain the ability in managing the gaming budget and increase/decrease capacity across the different sleeves depending on how the gaming ecosystem on Arbitrum evolves.
Profits to the DAO should be reinvested into gaming
Profits from the GCP should be reinvested back into the Arbitrum gaming ecosystem to sustain and extend future funding while also supporting public goods, infrastructure development, bounties, and other future opportunities yet to be identified.
There currently exist a multitude of revenue streams that Arbitrum is able to access across a more generalized treasury management strategy being contemplated, sequencer fees, the Arbiturm Orbit Expansion Program, etc.
Closing Note
While there are many other granular details that we as a team and council have to contribute to this proposal to help better define the program design, roles and responsibilities of the various groups, value capture mechanism (including a full waterfall model!), etc., this can all be followed up with in due course.
As mentioned, we support the general direction of the proposal and plan to vote FOR this proposal during the Snapshot temperature check.
A Catalyst to the Catalyst
In the current form, my feeling is the Gaming Catalyst Program is fated to have a slow start with timing being gated by: (1) having formed a Catalyst Team; and also (2) having elected a Council.
Based on the noted timeline, the first applications will come in April/May and grants will start flowing in May/June (assuming streamlined commercial discussions / negotiations). This all assumes everything goes as planned, which let’s face it, it rarely does. In actuality, and I hope to be proven wrong, with all of the moving parts around the Catalyst Team and Council recruitment (executive search level recruitment) I think we can reasonably expect at least a 1-2 month delay to get the house in order. And while we can potentially rush to fill seats with bodies, it doesn’t mean that we should.
This means that we’re looking at June/July to actually start catalyzing gaming (3-4 months from now). I think this is too late.
We should consider a “catalyst” to the “catalyst” to get the ball rolling through a publisher/ecosystem-led effort in close collaboration with the Arbitrum Foundation.
Here’s how this could play out:
While there is no stated restriction preventing project from making a grant proposal directly to the DAO (we applaud Into the Dungeons for being the first gaming project to do so), it’s clear that Arbitrum DAO likes its frameworks.
With this in mind, it may make sense to explore a “Minimum Viable Catalyst” (MVC) that aligns with this framework with the following modifications:
For an interim period while everything is being stood up, substitute the Council and Catalyst Team with the Arbitrum Foundation
Allow publishers/ecosystems to, through their public proposals posted on the Arbitrum governance forum, propose an interim structure to bring deals to the Arbitrum Foundation for grant consideration
Allow the DAO to approve/ratify the publisher proposals (the interim measures only)
Upon the hiring of the teams and entity formation, have all deals reassigned from the Arbitrum Foundation to the new Catalyst Team
Publishers/ecosystems will resubmit public proposals to the forum to provide both a status report and to unlock access to further capital in line with the existing proposal
Ecosystems like Treasure are already at the ready and are putting in the work to grow gaming on Arbitrum regardless of the GCP passing or not (ideally it will). We have business development resources, we’ve driven several game migrations (from Polygon, Solana, etc.), we’ve allocated millions in capital and grants ($MAGIC via emissions and ecosystem fund, our treasury) to builders, and we have a deep network to access gaming deal flow which has allowed us to bring together our portfolio of games that has helped put Arbitrum gaming on the map.
eg. ~50% of the games in the Arbitrum Arcade event (the gaming edition of Arbitrum Odyssey) are associated with Treasure
Our games include: Smolbound, The Beacon, Realm, Zeeverse, Bitmates, Kuroro, Kaiju Cards, Tales of Elleria, Knights of the Ether, Mighty Action Heroes, and others.
I read the whole thing, though this excerpt - right off the bat - sold it (at least to me) because it means that you guys are in fact reading and taking concerns into account, and that I wasn’t actually just being overly critical.
“However, changes/improvements should be made to launch a program that can truly catalyze gaming on Arbitrum. We’ve got a massive opportunity to do things right and do things well. This needs to move quickly while at the same time help stand up a long-term, sustainable structure that can continue to grow gaming on Arbitrum for many years to come — after we’ve had major gaming hits start to emerge from the early seeds we are sowing through the GCP.”
And so, as someone without “skin in the game”, I am pleased to continue my support of Dan for his effort to make this happen amid the largely insurmountable challenges ahead, and to Karel whose missive clearly proves that at least someone besides my mom and my friends, read the massive tomes that I wrote about this proposal.
I have no idea if this, as a $400MM ask will pass as-is, but I believe that at this point, it’s “gud enough”.
ps. I also want to add that this missive brought much-needed clarity to why a 2-tier structure was needed - amid all the challenges of what lies ahead. And the name change for the venture (to Catalyst) team, made it make even more sense that as was originally written.
The solution you proposed, initially made me kinda go “meh”, but i can’t think on top of my head on anything better to be honest.
I just don’t know if the foundation is equipped with enough labourforce. We have been seeing with the LTIPP (and I can testify it since my eyeballs are falling off due to overtime) how participated these intiatives are starting to be in the arbi ecosystem. Which is a fantastic thing. But also means you can get an influx in the beginning x2, x3, x5 times higher than expected. This also applies to delegates that will have to vote.
But i don’t want to be a negative force here. Let’s try it, let’s see if the foundation wants to help us here. If we keep a milestone tiered approach, we can at some point with hopefully not too much friction move already in evaluation project from the structure of the catalyst of the catalyst to just the official catalyst structure.
While members of the DAO worry about how best to allocate 200 million ARB to gaming initiative, Optimism has allocated 800M OP, currently worth over $3.2 billion+ to supercharge their network’s growth and another 800 million reserved for airdrops, and with latest 4844 upgrade, their gas fees are lower then $0.0001 cents in some cases.
But, please take all the time you need to mull over 200 million ARB for gaming.
Appreciate the huge engagement the post is receiveing and the efforts of @karelvuong , @Djinn and team in getting this out. I have primarily 2 concerns with the proposal as it currently is
I don’t fully understand the mechanics of how revenue will come back to the DAO - who is going to make sure this actually happens?
On a related note, I wonder if deals can be executed as token swaps for the games that have launched a token. For example, if treasure or XAI were to apply to the GCP then it would be a simple swap of $ARB for $MAGIC or $XAI, and revenue share/capturing the upside for the DAO would be taken care of with minimal headache
I like this idea a lot. Something @Frisson mentioned to me was how worried he gets when he has to vote on multi-million proposals that have not even had a pilot.
Breaking up into tranches of 50 million ARB makes sense. I wonder how it would be structured - would the entire 200 million be transferred from tally in one vote and then it gets streamed over time?
Or would there be 50 million ARB approved in the first batch and then a review by the DAO on continuation? I would personally be more comfortable with this approach, especially once @Immutablelawyer , @DisruptionJoe and others complete their optimistic governance module that would make it easier to get remaining tranches without a DAO wide vote.
Overall very supportive, great to see we have now stood up a gaming vertical too!
Overall very solid proposal, there are arguably some tweaks that could be made but i think getting this proposal passed quickly and into market is crucial for Arb to be competitive. Hiring the right team for oversight will of course be key but this is great step in the right direction.
Mechanism would be dependent on the grant or deal terms but could come in the form of: equity/tokens, treasury swap, revenue share (on microtransactions, marketplace revenue, sequencer revenue), etc.
On the enforcement, the “Catalyst Team” (Venture Team) to stood up would broker these deals and the associated commercial arrangements / terms with either the game developers or the publishers on behalf of the DAO with it being a beneficiary of the value capture. With the Catalyst Team being (potentially) structured an Arbitrum Foundation subsidiary (TBD following more fulsome entity structuring analysis), this group, like the Foundation, should operate for the benefit of the Arbitrum DAO.
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On the token swap approach, this could work for some deals and feels cleaner but the majority will likely be too early to do this and prefer a long term lock or vesting structure. With tokens entering into the equation, the upside would need to be captured through a plan to divest those tokens at some point in time. The divestment strategy should likely be driven by the Catalyst Team as the folks being closest to the respective game teams and their progress but should work in concert with the DAO’s treasury management council.
Both strategies could work. The latter depending on timing does also make sense and could fall in line well with the proposed quarterly transparency reports to evaluate progress. In either case, the DAO will always have the rights to shut things down if needed. What I like about the latter vs. it being streamed over time is that it could be deployed in a treasury management strategy to generate yield vs. remaining fully dormant (a wasted opportunity given the magnitude of the funds)!
Disagree completely. Allocating 200 million ARB for gaming, even if done wrong, is not going to destroy Arbitrum.
Lack of attention to Arbitrum and other L2s eating away market share and other products will. What use is great infrastructure if no one is going to use it?
When?: Fri Mar 15 at 1pm ET
Who?: