Blockchain Gaming Wallet A-to-Z
Part 2 - How wallets differentiate your blockchain game
TL;DR
Blockchain wallets released by game developers focus on expanding the governance token ecosystem to promote the game and are mainly operated outside the game (as opposed to embedded wallets).
Blockchain wallets created by blockchain-native companies target the in-app/in-game wallet market for smaller game developers and support interoperable environments similar to enterprise SaaS services in the Web 2 market (like Microsoft compared to vertical SaaS players).
Most wallet services support Fungible Tokens and NFTs in a non-custodial form and have social login functions (no longer a differentiator). They are also expanding into non-gaming business models through DeFi add-on functions within the wallet.
In the future blockchain wallet market, it remains to be seen whether only 2-3 global platforms will survive or whether there will be separate winners for each industry, vertical, or regional winners who coexist.
Introduction
DeFi in 2020 and NFTs in 2021 took the lead in the blockchain summer, emphasizing the need for blockchain wallets to store and transfer these tokens. MetaMask currently dominates the global market with over 80% market share and 30 million monthly users. Centralized exchanges, game companies, and crypto development companies started to launch new wallet services to attract new users.
As time passed, dissatisfaction with the inconvenient usability and features of blockchain wallets emerged, leading to the release of specialized wallets tailored to each service area, going beyond just storing and transferring tokens. One of the most notable areas is the blockchain gaming industry, where blockchain gaming platforms, including wallets, have been launched.
In the second part of the Korean blockchain wallet series, we will analyze the wallet functions of major blockchain games and present a view for each game developer, following the first part that covered the overall Korean blockchain gaming market.
Key Blockchain Wallet Functions
In the previous part, we examined four game companies including Wemade, which operate their own blockchain game platforms and provide services including blockchain wallets as one of the platform's services. These platforms primarily onboard blockchain games onto their own platform and connect the wallet to the corresponding game, aiming for transactions such as swapping game tokens and their own tokens within the wallet.
Blockchain wallets released by game developers mainly focus on storing and trading virtual assets, including 1) asset storage and transactions of individual game company IP and governance tokens, 2) asset storage and transactions of NFT assets (in-game items), and 3) interoperability with major external services. Additionally, the wallets are expected to continue to develop various trading functions as a strategy for expanding revenue in the DeFi field beyond gaming. To utilize these functions, players must connect their wallets to the game services and execute transactions externally from the service. This has resulted in wallet functions that are increasingly focused on various transaction functions, with the addition of more features expected in the future. In the medium to long term, we can expect user-friendly features such as Fiat & Crypto On/Off Ramp and NFT checkouts, in conjunction with the development of domestic regulations for each jurisdiction.
Game developers possess a relative advantage over capital and resources, allowing them to construct their own platforms using their legacy intellectual property. On the other hand, blockchain-native companies lack their own IP or ecosystem. This contrasts with enterprise Software-as-a-Service (SaaS) services that aim to become universal tools compared to the encapsulated approach taken by Web 2.0 giants such as Microsoft or Google.
To prioritize user convenience over focusing solely on their own tokens, blockchain-native companies are releasing in-app wallets that can be used within their own services. These companies are expanding their activities to target small game companies and crypto-native game developers, rather than AAA game developers.
One such example is the Face Wallet, which was released by Haechi Labs and selected as the official wallet for five global mainnets, including Polygon, BNB CHAIN, SOLANA, NEAR, and AVALANCHE. It provides basic swap and bridge functions for FT and NFT transfer functions. However, various DeFi functions such as staking cannot be confirmed, and the company is currently working to expand its development capabilities by supporting connections to various chains.
Another example is Iotrust, famous for its cold wallet Decent Wallet, which released the Wepin in-app wallet in the second half of 2022. Although detailed information about it is currently unavailable, Wepin reportedly supports 20 chains and has the broadest range of functions, including DeFi, DEX, DAO, and more. This could be due to Iotrust's existing Decent Wallet technology.
Competitive Analysis
Basic UI/UX
When it comes to blockchain wallets released by game developers, the main screen often features a list of fungible tokens (FTs) held by users within the ecosystem. This is a strategy that emphasizes the self-contained token ecosystem.
However, there are exceptions to this approach, such as the Intella X Wallet released by Neowiz. Its home screen displays onboarded games, placing more emphasis on the games themselves rather than the in-game economy. While there is no definitive answer as to which layout is correct, the Intella X Wallet has an advantage in that it offers a more organic connection between onboarded games.
Log In Features
MetaMask stands out for supporting login through a password, as well as providing a separate seed phrase for account recovery. However, with the exception of XPLA Vault, which currently does not support social login, most wallets, including WeMade's Play Wallet, do not provide a separate seed phrase. This is thought to be a deliberate choice made with the goal of making it easier for the general public to onboard and use the wallet.
Interoperability
Blockchain wallets released by game developers tend to support the chain centered around their own tokens, while in-app wallets released by blockchain-native companies tend to support as many chains as possible. As previously mentioned, game developers are implementing strategies to promote the value of their own tokens, while in-app wallets adopt a multi-chain strategy to cater to the needs of as many clients as possible.
However, game developers are also considering a multi-chain strategy in a sequential manner. Recently, the MARBLEX team of Netmarble Games announced their multi-chain strategy, MBX3.0, at the Jungle Foundation Week, stating their support for BNB Chain and their aim to support more chains in the future. This strategy aims to create a user-friendly environment and onboard more games by moving away from issues that arise from being dependent on a single chain. Therefore, it is expected that game developers will also support more chains in the future to accommodate a wider range of users.
Differentiators
Wemix Play Wallet (REFLECT, DEX)
Play Wallet, developed by Wemade, offers a unique set of features and functionalities that distinguish it from other blockchain wallets. In particular, the wallet provides a comprehensive set of FT transaction functions under a single tab called GameFi. These functions not only include the typical SWAP mechanism but also DEX and REFLECT functionalities that are not commonly found in other blockchain wallets.
In terms of DeFi features, Play Wallet is considered to be one of the most advanced platforms. The DEX function allows users to purchase multiple tokens registered with pWEMIX using in-service currency. The ability to purchase tokens at the current market price is a significant advantage, although liquidity supply may still be an issue due to the premature order book system.
REFLECT is a synthetic token created by locking up a specific game token, verified as a REFLECT Alliance member within the WEMIX PLAY ecosystem. This synthetic token plays a catalyst role in the token's transaction volume within the WEMIX PLAY ecosystem, such as game token lockups, burns, and new game onboardings. Users can obtain REFLECT by locking up a certain proportion of game tokens, allowing them to benefit from the locking effect. In addition, when users decompose the REFLECT, 5% of the tokens are burned, preventing inflation. Finally, users who hold REFLECT can receive airdrops of tokens from newly joined games in the Alliance, making it easier to attract users who are already using the ecosystem when onboarding new games.
Overall, Play Wallet's differentiation lies in its unique set of features and functionalities, including DEX and REFLECT, which cater to the specific needs of the WEMIX PLAY ecosystem. These features provide users with greater convenience and potential benefits while simultaneously promoting the value of the platform's own tokens.
XPLA(GOV)
Unlike other services, XPLA Vault has introduced a governance system within the blockchain wallet that allows participation in the XPLA Chain. Users can deposit 10 XPLA and propose changes to the protocol, which can be implemented if certain criteria are met within 7 days. While the feature is a unique selling point, it raises questions as to whether it is a user-friendly function for gamers who primarily are not interested in functions besides the game itself.
Conclusion
The blockchain wallet market is still in its early stages, with game developers aggressively promoting blockchain gaming platforms and releasing their own wallets. However, it remains challenging for the average user to find an entry point to the market, as installing and using wallets outside of gaming is still unfamiliar territory for many. In contrast, blockchain-native companies such as Haechi Labs and Iotrust are targeting the in-app wallet market, considering the convenience of non-native users. It is expected that more companies will enter the in-app wallet market in the future.
The competitive flow of the blockchain wallet market is not significantly different from that of the early Web 2.0 market, which was crowded with countless services and standards. However, over time, only a few services dominated the Web 2.0 market, achieving significant market share. Similarly, it remains to be seen whether the blockchain wallet market will be dominated by a few global winners or if different wallets with unique characteristics will coexist and prosper as industry vertical or regional winners.