Exclusive interview with Play-to-Earn pioneer Shaban Shaame on gaming and NFTs
Spells of Genesis (SoG), generally regarded as the very first play-to-earn blockchain game, marked its fifth anniversary by opening a virtual NFT history museum.
This milestone led Finance Feeds to take a deeper look at the blockchain-powered gaming industry in an interview with Shaban Shaame, the founder of Swiss-based blockchain pioneer and the game studio behind SoG, EverdreamSoft.
Shaban Shaame, who is also co-founder and board member of the Blockchain Game Alliance, together with his team designed SoG specifically to allow players to purchase and trade in-game cards using either in-game currency (through traditional in-game purchases), cryptocurrency, or both. Players also have the opportunity the blockchainized their cards to transform their in-game cards into tradable blockchain assets once the cards have reached their highest evolution.
In the interview, we spoke about the changes in the gaming industry since the launch of Spells of Genesis, how to mitigate the risks of hacking and chain disruption, how to drive further NFT adoption in the gaming industry, the EDS Crystal Suite, and the industry going forward.
EverdreamSoft was an NFT pioneer in 2015. What lessons have been learned and how has the industry changed?
If we go back to 2015, there were very few people interested in blockchain and gaming. During the past year what impresses me the most is the evolution of how communities have been built around NFTs. At first, I thought that very high quality graphics were extremely important but at the end, what matters the most is user engagement even if quality graphics can also be important in some cases.
For instance, if we look at the Rare Pepe collection, there are some very high quality Pepe but there are also lower quality ones that a lot of people could do by themselves. The value here lies not only on the item itself but on the whole community around and the number of people involved.
I believe it is a game changer and I am looking forward to seeing how the value creation of the projects will evolve. I think it will engage users and the community more and more. Everybody interested will become small contributors to a project or a game. Until now, it is still underexploited but I am sure that more and more projects in the future will have user-generated content. So what I’ve learned is the importance of the community’s power, not just as consumers but also into the whole creation level.
Another lesson that I’ve learned is the governance system. When you build something on a chain and when you choose a technology either Ethereum, Binance, Polkadot or any chain, the governance of the chain itself is the key. Every project whether they are built on Solana or others, is a choice of governance system. Some people will prefer one blockchain for some reasons when other people will prefer another one for different reasons. An important lesson is identifying a chain or a technology not only for the tech itself but also for the governance system and the values that lie behind the project.
EDS adopted the Ethereum blockchain in 2020, which improved sales. As the NFT world grows, could an ETH disruption similar to the Bored Ape sale happen with EDS? Are there contingency plans?
The approach EverdreamSoft got was different from most of the projects at our time back in 2015. Some projects are now using this approach, but EDS always had a strong stand on the differentiation between the product and the technology. It means that EDS integrated Ethereum but didn’t migrate to Ethereum. We only included it.
In 2020, we made Spells of Genesis compatible with 2 chains, soon after with 3 chains. The goal was to allow users to hold their token in the chains they want. There are different beliefs, different use cases of every chain and governance system and we want to address all these beliefs and values. Some people prefer a chain because the fees are lower while other people will prefer a chain because of its governance. Some prefer decentralized solutions, others prefer centralized ones.
It’s the reason why what we built on EverdreamSoft is compatible with multiple chains, so if there is a disruption in one chain we can offer a continuous service of the system on other chains as well.
EDS aims to serve everyone and allows people to easily move from one technology to another in case there is a disruption on one chain. In that case, people could transfer their assets temporarily to another chain they have. This is the DNA that we are building.
In general, in terms of risks, there are multiple ones such as chain’s disruption, but there is also hacking and others. Every risk has their mitigation strategy but in our case, we don’t put all of our eggs in one basket and we try to be as agile and as flexible as possible following the market dynamics.
The Game Developers Conference’s 2022 annual report stated that only 1% of developers said they were integrating NFTs into their games, despite 28% being interested. What could drive those numbers higher?
Great question. When we started in 2015 those numbers were quite low, in fact nobody in the gaming industry was interested in NFT. We tried to evangelize game developers explaining the amazing potential of this technology and what we were doing and since then we see a huge increase in interest among the people. Even if the percentage is still low now, there is a huge increase in interest that we could notice from the past.
We can notice that a lot of game developers are still afraid of losing control. When we are talking with game studios, they seem way more comfortable when they control the ecosystem as it means they could sell the same item to multiple users. If there is a free market, one item could be benefited by 2 users. It might be one of the reasons why they are not very happy and inclined to embrace decentralization.
Since the beginning, EverdreamSoft was ready to navigate into decentralization and sell less in terms of quantity if people had the power to exchange and trade. In that way people are more likely to buy much more. For instance, if you look at the physical world and we take as an example a physical trading card game (Magic the Gathering) vs a digital trading card game (Hearthstone). People are spending more time playing digital trading card games but they are spending more money on the physical one. The question is why are they spending more money on the physical one but spending less time playing? One of the main reasons is ownership. When you buy a physical card you own it, you can resell it anytime, even though you won’t, you have the possibility to do it. The ownership makes it more valuable and this is what we noticed with NFTs.
Some NFTs are super expensive when compared to the digital purchase in a digital game. However, you don’t have any power on in-game purchases and even though you are a big fan and you spend a lot of hours on it, you’re likely to spend much more money on something that you will own.
I think we are just shaping the key driver and what will push people to embrace blockchain.
If we look at Play-2-earn, the value proposition is that you can pay your customers to play. This is big because without blockchain it is not possible to pay people in gaming, you can not take money out of your pocket and pay people to play, but with blockchain you can reward people with valuable things that they can trade for actual money. If you take 2 competing games that have the same quality but one pays you to play and the other does not, which one will you choose?
A bigger driver is the co-creation and the user-generated content. Users will co-create and be much more engaged in a product or game where they contribute, especially if they can earn money by selling their art. It can be art, audio, game elements, game design, level creation etc. This will go much more viral because they will tell their friends, they will share their creation, they will sell and they will earn. They will be bigger advocates of products where they are also stakeholders. The fact of being a stakeholder of a product, it will disrupt the gaming industry. Consumers are not stakeholders; they will be naturally abandoned to products where they feel they contributed.
What is the EDS Crystal Suite?
EDS Crystal Suite is a suite of tools that we are building in order to create, manage, view, search NFTs on multiple chains. The main point of the tool is to allow the representation of the link between the asset and the tokens. There are multiple chains and chain systems representing tokens defying ownership of an asset. When you build a game or a project, let’s say you want to build it on Ethereum, if you want to go to another completely different chain, you have to reprogram everything and dig the chain logic of this specific technology which is very expensive and time consuming.
With EDS Crystal Suite we are building a suite of tools whether it is a wallet, a block explorer, a tool to mint NFT, an analytic tools, we are building into abstracting assets to token ownership and work on multiple chains. It is an ongoing development & project. It’s not fully released yet but it’s going to be all open source. We are currently using it with our mobile game Spells of Genesis where we experimented and adapted it directly.
SoG is now compatible with 3 different chains where you can own your tokens Counterparty, Ethereum and Klaytn and implements a Crystal Suite Store. It means that when we add a new chain compatible with the Crystal Suite, the game becomes immediately compatible with that chain without any change required in the game system. We are using and building this in-house product, but the goal is to open it to every product and game developers to very easily be able to enable NFT in their products and games. We’d like to push it as well to cross compatible metaverses and cross gaming as sometimes you wish to give value to tokens that are lying on other chains for another project.
Where do you see the NFT space going in the next 5-10 years?
I believe the DAO model will be the future. The fact that Play-2-Earn DAOs are built and governed by the community and not only by one company is incredible. It is a nice model where a company can initiate a project, but the main value is added by all the users contributing to the project. This is the new era of creation and it increases the pie of the potential value creation and revenue.
The users and the communities get rewarded for their work. People buy from other members of the community; they create value and resell to others. The co-creation will be the center of a DAO based project. If we look at games such as MineCraft, there are a lot of people with great creativity who created amazing things such as new textures or mini games. The user’s creativity is illimited.
The thing is that with a centralized product, all the IP and revenues go to the company who created it. They have full control and there is no way to make a living out of community created content. In the future, the fact that you can combine the talent of different people by going to a marketplace where you can buy an image made by an artist in Singapore, a video animation from an artist in Brazil and so on is incredible. You can combine all these artists and everybody gets paid and you can recreate a new thing with all those elements. It allows to unleash creativity by combining pieces of talent from people all over the world. This is completely redefining how NFT will be created by a combination of multiple talents. This is how I see the future of NFT, a big disruption of the NFT space and blockchain industry.