GameFi and NFT Marketplaces: Altura vs. Immutable X

Competition in the GameFi space is tough as the number of developers is limited, and quality games have lengthy lead times.

Introduction

Historically, gamers and gaming companies have been in a sort of tug-of-war when it comes to in-game purchases. Players feel that since they’ve already paid for the game, it makes them feel uneasy at the thought of paying further for in-game items. Loot boxes could also be manipulated to benefit the companies without giving gamers any stake in the ecosystem. 

Furthermore, developers have given up on loot boxes in many cases, and without using NFTs to ascribe ownership to in-game items, it has led to risky practices which provide scammers with opportunities to take advantage of peoples’ goodwill. Nevertheless, black markets for in-game items are formed to serve gamers’ demands.

That means rare in-game item markets involve account selling. Blockchains and smart contracts provide more transparent ways to give gamers a stake in the games they play, the items they purchase or acquire, and even allow developers to design dynamic features into the NFTs so that small royalties are paid out in perpetuity during resales. After a look at Altura’s Marketplace, we’ll check out the competition at Immutable X and see what players can look forward to from both ecosystems. Finally, we’ll consider if the status quo is already well-established, or if there are still opportunities to make waves in the GameFi space.

What is Altura Marketplace?

Altura enables the interoperability of in-game items across games, supporting top EVM blockchains like Ethereum, Binance Smart Chain, and Polygon. Developers first need to connect their wallets and create a unique API key at the Altura Developer Portal. Altura Developer Account also includes unique wallet addresses, and corresponding private keys. The API key allows devs to use the ‘Smart NFT’ features when minting NFTs which allows for a lot of flexibility in terms of financialization.

Altura develops APIs and SDKs, which are tools for developers, to create and easily integrate dynamic NFTs into their games and Web3 business initiatives. They also have an NFT marketplace for minting and trading what they call ‘Smart NFTs.’ Altura’s dynamic NFTs can be both stackable and non-stackable, giving the ability to program things like perpetual royalty fees, rarity scores of certain characteristics, supply, and have them change based on external conditions. A sword NFT could be used within a video game, with the gameplay having direct effects on the NFT and vice versa.

Another element of their business model involves the randomization of unlockable items and chance events by creating loot boxes, for chance events generate excitement for players, keeping them engaged. Loot boxes are also an additional source of revenue for many game developers. Altura has created its own in-house random number generator for their loot boxes, which provides a mathematical proof of the unbiased and random determination of loot box awards.

Moonshot Voyage is a bird’s-eye-view shooting game that is governed by its Polygon token $SMI. As you play the game, you can win various in-game items as NFTs that can be sold on secondary markets like Altura, which as mentioned, is powered by Binance Smart Chain. This means that Altura and its token $ALU, offers significant overlap for those seeking cross-chain liquidity between BSC and Polygon. The game is still under development, but some beta footage has made its way onto social media.

On their ‘Smart NFTs,’ similar designs have also been called dynamic NFTs. Outside of video gaming, a professional football team could mint a set of dynamic NFTs that offer claims for a free drink after every goal scored by the home team. The NFT would need to be connected to the web via powerful blockchain oracles. This creates a notable bottleneck for data flowing on and off-chain, meaning that oracles need to be secure, refresh their data feeds frequently, and be economically feasible to employ.

After a scored goal, the NFTs could be activated for the next half hour so that NFT holders attending the game would have a chance to go and claim their rewards before being reset. The possibilities are endless, and maybe even more so with video gaming. Sports teams or even social avenues geared towards gaming could be easily persuaded to launch initiatives in the NFT space, particularly if friction is low and technical support is reliable. However, traction is the name of the game, and the activity level on Altura’s marketplace looks somewhat limited thus far.

GameFi Juggernaut Immutable X Gains Traction with GameStop Deal

Immutable X is a more familiar name in GameFi, and claims its ZK-STARK rollup on Ethereum allows it to process 9,000 transactions per second. One of the selling points for Immutable X is that it offers zero gas fees when you mint, trade, or transfer NFTs. Developers can simply use the provided SDKs to integrate Immutable X’s wallet and APIs into their game and tokenomics models. Gods Unchained is arguably the most notable example of a fleshed out gaming experience using Immutable X’s marketplace, with Illuvium and Ember Sword following behind it.

Gods Unchained is a digital trading card game, a bit like Hearthstone or Magic the Gathering. Only with Gods Unchained, you can purchase rare cards with your crypto, and trade them on the blockchain as NFTs, which users can then convert to their desired crypto or local currency in many cases. 

This combines the benefits of Ethereum’s blockchain with its negation of the high gas fees which have come to define anything run on Ethereum’s main network. Since Immutable X doesn’t charge gas fees, it offers an attractive option for fans of these sorts of trading card games. 

The GameFi model of Immutable X’s Illuvium is to collect and sell a collection of 500 ‘Illuvial’ NFTs. These are akin to pet monsters with special attributes. That is, they have defensive or offensive combat capabilities. However, players need to explore deep into the game’s world and gain significant experience before being able to find the rarest Illuvial NFTs which combine powers and skill sets with unique effects.

The GameFi model of Immutable X’s Illuvium is to collect and sell a collection of 500 ‘Illuvial’ NFTs. These are akin to pet monsters with special attributes. That is, they have defensive or offensive combat capabilities. However, players need to explore deep into the game’s world and gain significant experience before being able to find the rarest Illuvial NFTs which combine powers and skill sets with unique effects.

Players can also mine ‘Shards’ from the game’s world, uncovering rare gemstones and other commodities which upgrade their gear. Players harvest in-game flora as well to extract healing or protective powers during battle. 

In turn, Immutable X is used to trade in-game items players gather, the gear they’ve crafted, or common, unneeded Illuvials to newer players. All the in-game transactions between players are done with the ILV token. It’s also worth noting that there are a limited number of Illuvials in the game’s ecosystem, meaning that they will become harder to find and capture out in the wild as time progresses. Early adopters will thus have the advantage of time on their side.

Immutable X Could Still Face New Competition

Altura’s integration of dynamic NFTs for minting in-game items which are interoperable via the Web3 tech stack is indeed where the industry is trending towards whether it has become accepted in the mainstream or not. The amount of value waiting to be unlocked by creating a digital asset layer underpinning the video game industry is unfathomable. Having said that, interoperability across blockchains requires a price discovery and validation mechanism to safeguard the fidelity of its deployed assets. 

If traders can arbitrage Altura’s NFTs by frontrunning its price refreshes on-chain, it would create a hostile environment for regular gamers looking to join an ecosystem in good faith. With advancements in zero knowledge cryptography and a novel consensus model, and the most current smart contract programming language, dynamic NFTs need to be tracked on-chain with precision in order to minimize users’ transaction settlement time to finality, and thus maximize the liquidity of their NFTs.

That is, dynamic NFTs are conceptually on point. Perfecting the design of dynamic NFTs and providing quick and secure computation of VRFs which cannot be gamed are still needed in order to optimize their financialization and mainstream use. Other protocols like Immutable X offer a similar dynamic NFT marketplace, but have more tangible activity taking place in its ecosystem. Having said that, Web3 is a fast-paced sector, and we expect new players to offer even better scalability for a gaming ecosystem, especially in terms of throughput.

Finally, Immutable X recently partnered with GameStop to establish themselves as their NFT marketplace provider, as well as the creation of an up to $100 million fund in IMX tokens for grants aimed at funding native NFT projects. The funding also helps scale further growth on the platform by providing cost buffers for creators working within the Immutable X ecosystem. Interestingly, GameStop reportedly sold off a significant portion of their IMX tokens after the deal was announced, cashing in roughly $150 million USD. 

At this point in time, there are only challengers to Immutable X, but the traction it’s now getting puts it in a league of its own for now. That is to say, Immutable X is the player to watch as a rising star in the GameFi space, and Altura has a lot of ground to cover before it can catch up with such a head start. However, new players will always enter the space with better technology, as they’re able to learn from these larger companies pressing forward earliest.

Resources

1. Addison, A. (2021, 25 Aug.). Max Sindall & Majd Hailat, of Altura NFT on smart NFTs | Blockchain interviews. CryptoCoinShow.
2. Altura. (2022). Altura: Where blockchain meets gaming. Innovations of the World. 
3. BSC News. (2021, 9 Apr.). Altura NFT | Integrating the gaming world with blockchain and NFTs to monetize in-game items. BSC News. 
4. Hayward, A. (2022, 4 Feb.). GameStop dumps $47m in Immutable X tokens following Ethereum NFT marketplace deal. Decrypt.
5. Tan, E. (2022, 3 Feb.). GameStop taps Immutable X for NFT marketplace, launches $100M gaming fund. CoinDesk.

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