Cross-posting the GCP Strategic Update (March 2025) here for all those following this thread.
We encourage everyone to follow the link and digest the full update.
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So, if I understand the latest posts correctly, the plan is to retain the status quo while ensuring transparency and disclosures via moreā¦reports?
As a gamer and game dev, I tend not to lean towards any chain or any game, but instead looking at the long-term overarching picture of gaming as a whole because gamers have always gravitated towards games and communities that hold their interest. Web3 gaming is no different from any other gaming sector, except for the fact that thus far it has failed - miserably - to attract core gamers. Instead we have Web3 gaming dominated by gamblers and speculators who are more focused on making money than they are in engagement. The mistakes there have already been made and thereās no going back. But what if we had the chance to change that - for the better?
IMX, AVAX, Treasure, XAI et al - across all chains - are all siting on catalogs of underperforming games. We refer to that as the āSteam Enigmaā. And collectively, millions have been thrown at breaking the cycle of Web3 transient gaming engagement. That has thus far failed to yield tangible results because Web3 gaming engagement is transient by nature. When you flood an ecosystem with a lot of games, UA aside, the end result is that breaking out presents an insurmountable challenge for teams - regardless of funding, experience or clout.
Anyone paying attention - and who understands the metrics - already realizes that the era of token funded games is at an end. Thatās just not going to work as it once did - unless of course the teams are more focused on token-funded raises so they can get an early exit while abandoning the games when the music stops and the speculators have all moved on post-TGE.
Djinn, Karel et al came up with the idea for the GCP at a different time in the gaming cycle. A year ago, sentiments were high, the outlook seemed great - and Web3 gaming was supposed to be taking off. Then it didnāt. Most of us who actually do this for a living - right here on this forum - said that gaming has its swings and misses and that the risks were high. And so, the GCP needed to ensure that it was positioned to take steps in mitigating those risks and that throwing money at gaming was never - ever - a guarantee of success.
Every single day there are well-funded gaming teams either closing, being sold or downsizing their teams. Thatās not a fluke, itās a sign of the times ahead.
All that is to say, I still maintain that the GCP has to make the hiring of people with actual gaming and game dev experience a top priority. And they need to be in the intake team so that even before it gets to the council there is a good chance that the team and project have been thoroughly researched, vetted and the due diligence solid. Which is what I had originally assumed was being done. Turning it into a VC model isnāt going to yield the expects results because lets face it, how is that different from what came before - and has subsequently failed?
Build a better mouse trap.
Currently, as per the current transparency report, we have this structure. Image courtesy of the GCP - Strategic Update (March 2025)
According to that chart, from what I can tell, the GCP is still missing about 6 positions. And nowhere in there is the mention of any position that is āgamingā related. So, where are the gaming people? The people with actual gaming and game dev experience? The people who, when speaking with a gamedev team, understand precisely what is being conveyed, relayed and planned about a project? Every single successful games publisher, licensing distributor or funding team, either has such a person on staff or bring them in at some point - even if they are external. If such people are defined as being a part of pre-existing roles (e.g. Content Lead) in that chart, then that brings me to thisā¦
Another point to consider. While the Project Review process as outlined in the transparency report is solid enough, Screen One and Two are the ultimate points of failure. And so, thatās where the focus needs to be in terms of a proper and all-encompassing due diligence into a projectās chances of success. Yes, while 90% of game projects will ultimately fail to yield the expected results, āfailureā is relative to the investment made. Meaning, is the GCP looking for a 2x, a 10x or a break-even?
The GCP grant from the Mar 2024 startup was a 200M $ARB ask.
On Mar 15, 2024 $ARB was trading at around $2.00. Today, it is at $0.33. Thatās an 84% drop. And so, as of this writing, the 200M ARB grant to the GCP fund is $66M.
This means that the value and number of inaugural GCP projects are ultimately affected - especially when you take into account the costs of running the GCP project.
To wit: Off The Grid, a standard-fare AAA game with Web3 elements, raised $82M. Itās still in early dev, and the token TGE is today. Before that, we had Shrapnel.
That the GCP says they have already signed 66 projects makes it all the more important for the interested/vested parties to get insight into what those projects are, what they cost, the expectations, the ROI tracking etc. Given the above post by the ARB Foundation, theyāre obviously aware of these projects, have confidence in them etc. All said and done, I see that as a good sign.
However, I still have concerns about the viability of the GCP actually signing 66 projects within a span of 12 months even though it clearly wasnāt staffed to any meaningful degree during that period. Thatās not normal and is completely outside the norm. Was it rushed? Were corners cut? Were projects signed because of the pedigree of the team sans normal DD etc?
Lastly, it is my understanding that the GCP lacks the infra and team to lead a funding round. So, what is the play here? Do teams have to then first get a funding lead before engaging with the GCP investment team?
In conclusion, I still believe that the GCP should be setup as a third-party game distribution studio structure, staffed with experienced gamers/gamedevs because this Web3 version of a VC inspired fund is the very same playbook that has seen very little success in Web3 gaming.
To be clear, I still support the idea of the GCP because its success means that Web3 gaming will have a chance to prosper in some way. While most of us have since moved on for one reason or another, the fact remains that any Web3 gaming win is a win for all of us who are vested in the sector. And most of us arenāt transient in gaming. Weāve been here since the beginning.
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Reading through the answers to this clawback proposal, I see different points of view that seem valid enough from both sides, including @thedereksmart expert depiction of the challenges of gaming development and how it is expected in some way for this kind of initiative to fail.
To me, as it stands today, the GCP is already wounded in its current form, and bringing back the support and momentum that it once had would be very difficult given the current level of scrutiny that it currently has on its actions and the departure of some key members that would have contributed to the success of the initiative.
So, how do we bring these two visions together, recovering some funds for the DAO while still giving the GCP a vote of trust? I propose reducing the size and scope of the project to half of what was initially approved, allowing the GCP to continue with a limited budget, and allowing the DAO to use part of these funds for other purposes that could also be gaming-related.
In this way, the GCP will be able to complete their task (albeit with reduced scope), and will also allow Arbitrum to save face regarding the winding down of a very relevant fund, that could affect the willingness of other participants to contribute with the DAO in the future.
This, instead of a clawback, has the advantage of meeting in the middle, with the benefits mentioned earlier. Nonetheless, I applaud @NathanVDH for his interest in the health of the Arbitrum ecosystem, and his willingness to put his time and effort into presenting such a controversial suggestion, given that it has brought some really interesting actors to explain their experiences and finally brought the GCP to deliver a status report if the timeline presented by @paulofonseca in his earlier post is correct.
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The support and active coordination with the Arbitrum Foundation is essential for the success of the GCP. Itās comforting to see the AF is optimistic about the initiative and suggests there was indeed work done behind the scenes.
That said, I think the very few updates shared over the almost 1 year of operations is a big red flag, especially when considering the funds allocated and if combined with delays on the original plan. I strongly encourage the relevant entities (GCP, its oversight committee and the AF) to be more proactive in communications going forward.
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This comment really reflects what is wrong with the GCP in its current state and why changes need to happen and not only transparency reports, which are at least a good thing.
The main problem is, as stated, that the GCP was announced in a time where the whole ecosystem was really growing and a lot was happening, also in terms of gaming.
But now after more than a year its completely different. Things have changed and we need to reasses this proposal. Need to see if some goals from the original proposal need to be removed, revised or something different added.
And on a personal note, so far I have not seen anything interesting regarding gaming personally. The games at the GDC have been underwhelming from what Ive heard and the DAO needs to think if these funds can be put at use better somehow.
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Thank you for bringing this issue up. While the GCP has evidently not yet achieved the desired standards of transparency, it is equally important to recognize that there have been no significant reports of gross mismanagement or misconduct. Thus, we believe that a total winding down of the GCP could be more detrimental to the Arbitrum ecosystem in the long term than beneficial. While recovering funds would allow a better strategic reallocation of the funds, it would also signal a loss of momentum and credibility for the Arbitrum ecosystem, making it more difficult to attracting Llng-term quality contributors as they may be discouraged from participating in Arbitrumās ecosystem due to concerns over the security of funding.
Still, an initiative of this size should require the highest accountability standards. Those outlined by @NathanVDH and to which the GCP committed are a good start to regain community trust, and we are pleased to see the prompt reaction from the GCP team by appointing Castle DAO as DAO Communications Manager, as this will improve transparency and reporting quality.
In our experience as program and grant managers, a program of this magnitude should follow these accountability measures:
- Regular, Comprehensive Communications and Reports: High-level monthly forum posts, aimed at briefly informing about regular development and achievements. Detailed quarterly reports that cover financial statements, operational progress, key milestones, and setbacks. Such reports should be presented in a standardized format to facilitate easy comparison and review.
- Transparent Milestones and KPIs: Clear, quantifiable performance indicators should be established at the outset and regularly reported against. These KPIs should include minimum performance metrics that, if failed to be met, would signal the project is not being successful and would provide measurable evidence to the DAO that more aggressive measures like winding down the program could be worth exploring. .
- Accessible Communication: If further inquiries were requested from the DAO, the GCP team should be readily available and responsive to provide clarity to the community when possible, this includes periodic governance calls open to community members.
- Independent Audits: At least once annually, the GCPās operations and fund utilization should be subjected to independent third-party audits to ensure accountability and provide assurances of financial integrity.
We believe with the correct transparency and accountability standards and under the supervision and guidance of the AF and OCL, the GCP can thrive to become a benchmark for decentralized ventures initiatives and help onboard high quality projects to the Arbitrum ecosystem.
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