DeFi
Why Arbitrum could flood crypto games with $200 million – DL News
- Arbitrum DAO votes on proposal to create $200 million gaming catalyst program.
- Critics have expressed concern that the amount is too high.
- Crypto-based video games have fallen out of favor with investors.
The Arbitrum DAO is set to give blockchain-based video game developers over $200 million in crypto.
A vote to fund a new “Gaming Catalyst Program” with more than 200 million ARB tokens received overwhelming support through Wednesday, with more than 149 million votes in favor and nearly 31 million votes against.
If approved, the program would have 135 million ARBs, worth approximately $150 million, to invest in game developers and studios, as well as an additional 65 million ARBs to distribute in the form of subsidies.
The vote also sparked opposition, with critics calling it an excessive sum for an industry that has produced little success despite billions of dollars in venture capital.
“It’s too much money to spend on a niche category,” crypto influencer and investor Eric Wall wrote on X.
“I’m just not sure we need to fund this to the tune of a quarter of a billion dollars. Who does it help?
Wall, an Arbitrum DAO delegate, was one of many to vote against the proposal.
The Arbitrum dispute highlights the precarious state of web3 gaming.
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While donors claim it is “not a bubble“, the lack of success combined with a brutal crypto winter have reduced the flow of investments in Web3 games to nothing.
In 2021, Web3 gaming projects raked in $2.3 billion, according to ChallengeLlama. Last year, that figure dropped more than 70 percent, to $576 million.
Web3 gaming projects have only raised $213 million so far this year, despite venture capitalists. I’m coming back slowly to the crypto industry.
An “aggressive budget”
Karel Vuong, founder of video game developer Treasure DAO, co-author of the Gaming Catalyst program.
He pitched it as a way to boost game development on the largest layer 2 blockchain based on Ethereum.
“As a network, Arbitrum lags behind several major competitors in terms of total number of migrated games, launched games, and players,” the proposal states. bed.
“We believe aggressively budgeting to attract builders and retain talent will result in some major wins. »
The program would channel money to game publishers and developers over a three-year period.
“The core of this initiative is to create an investment arm for the DAO that would make investments instead of just granting grants,” said Krzysztof Urbanski, a member of the L2BEAT Arbitrum delegate. DL News.
“The revenues of the DAO do not necessarily have to come from [just] of sequencer revenue, this can come from return on investment.
Critical
Several Arbitrum delegates – members who use others’ tokens to vote on their behalf – have expressed concern about the size of the Gaming Catalyst program.
DAO governance firm GFX, an Arbitrum delegate, led a late campaign to scuttle the proposal.
“This is a huge amount of money for a vertical with no visible winners,” GFX wrote on governance forum Arbitrum. “This is highly speculative and looks like a YOLO.”
The commentary highlights how few Web3 games have reached – and retained – a wider audience.
The most popular, Axie Infinity, has already found its audience in the Philippines to crash amid a $600 million hack and a broader lull in crypto markets.
Despite a to come backdeposits into Axie’s Ronin blockchain are still a fraction of what they were at their 2021 peak, according to data from DefiLlama.
The value of cryptocurrencies deposited in the Ronin blockchain has continued to increase since October.
Arbitration delegate Lito Coen voted against the proposal, saying the initial amount was too high.
“I would prefer that the funding be for one year and/or a third of the amount and that the GCP group apply for new funding after that,” he said. wrote on X.
Support game system
Nonetheless, most key delegates to the Arbitrum support the program.
“For me, the benchmark is not Elder Scrolls but rather games like Stardew Valley,” Urbanski said, referring to a big-budget video game series that has sold tens of millions of copies in the world.
“Or games like Forge of Empires, Travian or Eve Online. These may not be your cover titles, but they are slots.
And Arbitrum DAO isn’t the only one willing to invest big in crypto gaming.
Recent games funds raised by Andreessen Horowitzas well as Arbitrum’s competitors Starknet And Polygonthe whole thing exceeded 100 million dollars.
“In web3, such an initiative is not extraordinary,” Urbanski said.
Aleks Gilbert is a DeFi correspondent at DL News. Do you have any advice? Send him an email to aleks@dlnews.com.