How NFT Innovation in Gameplay Will Turn the Crypto Season Around

DRepublic, creators of upcoming blockchain MMORPG Cradles: Origin of Species, discuss how the bear market’s turnaround will rely on true blockchain innovations as speculative hype flounders against a broadly negative market outlook for the crypto industry.

The developers also reveal their expectations for EIP-3664, a new NFT protocol that allows for combinable component NFTs and evolvable traits that promise groundbreaking gameplay elements never before possible.

The heady days of NFT excitement

Much has been said over the past couple of years regarding the potential for non-fungible tokens (NFTs) to revolutionize the creative arts industry, the blockchain industry, the music industry, the collectible industry… the list can literally go on if you’re the kind to have patience.

And for a while, the rise of interest in NFTs seemed to suggest that this potential was quick to form. Though the token technology itself was created in 2014, and used in a recognizable form in 2016 through the decentralized application (Dapp) games like Crypto Kitties and collectible art like CryptoPunks, it was really only in 2021 that the NFT boom well and truly took center stage.

That year, you could even sell some CryptoPunks (the original collectible NFT art) for $11 million. But it was really when Beeple sold his collection of NFTs for $69 million at famed auctioneer Christie that everything went mainstream for NFTs.

All at once, something that was nerdy and niche became valid and prestigious, because the art nouveau had embraced it. A flood of people, notably wealthy celebrities, got into the game and bought premium NFTs like the Bored Ape Yacht Club… presumably, to become members of an exclusive club you needed to be rich to be a member of.

OpenSea, the largest NFT marketplace, oversaw a peak trading volume of $217 million in February 2022. Overall, NFTs globally saw over $16 billion worth of assets changing hands.

Cryptocurrency and blockchain had already tapered off their own highs in November 2021, so NFTs looked like the darling of crypto that would continue to rise.

NFT paradise lost

Only, that didn’t last long. Just months later, as gloomy macroeconomics became evident across the world, with inflation rates not seen in decades, cryptocurrency markets met with the unfortunate convergence of crypto projects folding completely.

Billions were wiped off the market almost overnight with the massive fall of Terra/Luna, and the dominos started falling. Huge crypto lenders like BlockFi and Celsius were threatened with insolvency, MicroStrategy’s huge Bitcoin bets began to unravel, and crypto funds that once shook the world were suddenly mired in under-collateralized debt.

NFT trading volume dropped by over 75% at the end of May 2022 to just under $4 billion, signaling a loss of interest altogether in what was supposed to be a booming subsector of crypto.

The number of NFT scams and rug pulls taking place also began to thicken, with tens of millions lost simply to con artists swiping investor money.

Not to mention the hacks of famous NFT projects like the Bored Ape Yacht Club where negligence on their team’s part led to phishing attacks allowing the theft of valuable NFTs. In at least one case, entertainer Seth Green bought back his stolen NFT for some $300,000.

Coupled with ongoing lawsuits against NFT projects and even marketplaces like OpenSea facing accusations of fraudulent activity and insider trading, the majority of NFT projects were being laid bare for what they truly were: hype projects feeding speculation frenzy.

Even previously avid celebrity support is beginning to wane for pop NFT –  the likes of Travis Barker, and Jimmy Fallon, who fawned over Bored Ape NFTs just half a year ago, have quietly taken down their Ape profiles on Twitter, in the same week that the NFT NYC conference was held in Times Square, featuring a fake Snoop Dogg that appeared to fool hundreds of NFT enthusiasts.

All of a sudden, the NFT scene, once buzzing with fervor and excitement, is seemingly set on a downward spiral with no light at the end of the tunnel.

Taking down the NFT house of cards

However, not everyone in the industry believes that the end draweth near.

Crypto veterans will point to the fact that the market has witnessed at least three past “crypto winter” cycles, each time emerging from the bear market to notch another record-breaking rally.

For many, this cyclical period is a blessing in disguise, as it is the period where serious development takes place and innovations present themselves, since the market is purged from empty projects and vapourware.

Tib Palin, CMO at DRepublic, creators of upcoming blockchain MMORPG Cradles: Origin of Species, notes that the pause in speculatory interest can give more breathing space for the industry to identify viable and sustainable projects, leading to true innovations that help build stronger foundations for the blockchain industry.

Palin points to the last period of bearish sentiment, between 2018 and early 2020, to see just how the industry innovated.

Technological improvements were introduced to Bitcoin, Ethereum worked out a path to Proof-of-Stake, second-layer protocols began emerging to improve crypto scalability and interoperability, and the decentralized finance (DeFi) sector grew by leaps and bounds. He says:

“Similarly, we will see a handful of companies working on NFT developments to build the Web3 of decentralized applications in sectors like gaming and metaverse. With less noise and hype, it will actually be easier for these to gain the attention and even funding to build actual solutions.”

“And when these proofs of the concept see the light of day as actual, viable products and services that people can use, it will create a convergence of fundamentals, utility, and adoption that will turn the bear market around into a fresh cycle of bullish sentiment.”

A new NFT protocol for a new age of NFTs

For the Cradles game development team, the new EIP-3664 NFT protocol they are developing for their upcoming game is a pretty big deal. Cradles founder T.Y. believes the new token standard will result in a new type of NFT tokens that will change the way people view the current mold of NFTs.

“NFTs are almost as old as some of the earliest cryptocurrencies, and yet very little has changed about the way they’ve functioned for years. The majority of NFTs out there now, whether they’re art collectibles or gaming tokens or so-called metaverse coins continue to use the simplest form of NFT protocols – technically either ERC-721 or ERC-1155.”

According to T.Y., the most common ERC-721 NFT protocol makes for a suitable token for a straightforward utility like tokenizing physical items to make them easily transferable while providing an easy verification of ownership, such as in collectible art or real estate sales.

However, that early protocol is extremely limited in terms of the data it can carry, restricting it from performing more complex functions.

As a result, NFTs in this sense are simple and static tokens – useful for some transactions and use cases but a dead end for blockchain innovation.

A newer standard, ERC-1155 whose developers Enjin dubbed “the final token standard on Ethereum”, is an improvement since it allows the NFT to determine unlimited numbers of non-fungible and fungible items deployable via smart contract.

But T.Y. believes there is room and need for so much more, saying:

“To sum up what we’re doing with EIP-3664, we wanted to allow developers to create customizable tokens that are modular in nature, allowing users to combine, take apart and put together components to create new ones in an unlimited number of ways. Transforming NFTs from static to variable.”

For Cradles, this new standard opens up an entirely new aspect for blockchain games, allowing developers to add all game-related attributes into a contract.

This new standard was created as a direct answer to identified shortcomings of ERC-1155 – the inability to support all possible game prop operations and the inability of players to query all the attributes of game NFTs in relation to smart contracts.

Cradles don’t want to reinvent the wheel, acknowledging the maturity of existing NFT protocols. The new EIP-3664 is fully compatible with ERC-1155 and only extends the former standard to divide NFT attributes into four categories that make it possible for all game props, characters, and operation modes to be entirely represented in the form of smart contracts:

• general changeable;
• transferable; 
• upgradeable; and
• evolvable.

General attribute contracts have also been created with the possibility of emerging divergent supporting contracts in accordance with the game logic.

Entropy increase for aging effects

Aside from the technical upgrade of NFTs that would allow virtually unlimited manipulation of attributes for more varieties of gameplay, the EIP-3664 protocol will also be used by Cradles to attempt something no game has ever successfully done before: an implementation of an entropy-increasing virtual game world.

A simpler explanation of “entropy increase” would be to accurately mirror the laws of time and physics in the real world, where every single living and non-living matter must age inexorably towards destruction.

People, animals, items, and objects, all age and deteriorate, for example. Something that has been rather poorly replicated in video games.

Academic research has already shown that temporal effects (those of time) affect the engagement of gamers. Many modern games have tried to handle this passage of time effect in different ways.

In the real-time game Terraria, they simply fractionalize time blocks, where every real-world minute equates to an hour of game time. In Skyrim, every minute equates to 20 minutes of game time, within which a day and night cycle exchange.

However, all of these methods of handling time only give the illusion of passing time, with no real evolution of the state of the game and its elements. In other words, time is handled rigidly and statically, with any effects a mere cosmetic implementation.

In Cradles, the entropy increase will be designed to be hard-coded into smart contracts using the evolvable attributes of EIP-3664 NFT protocols. Since the game is built on blockchain, a unit of time will simply be determined by the creation of new blocks – time-based on block time will be a stable means of recording (and increasing entropy).

Each game element then is made out of component NFTs – be it a playable character, an NPC, the clothes they wear, the weapons they carry, or the materials they harvest from the game.

And each component will evolve with block time, according to the attributes set in their smart contract.

“Imagine if swords became rusty if not cared for, or vehicles and buildings fall into disrepair if not maintained. Or pets die quicker if not well-fed. This implementation of consequence and inconsequence incentivizes players to actively engage with the metaverse environment, and find a way to mutually maintain the world or it falls apart. This is the entropy-increasing world we envision for Cradles”, explains T.Y.

Should this idea find successful implementation, it may very well be the first type of metaverse to comply with real-world physics – very different from the static virtual worlds that currently abound. It’s of little surprise that some blockchain technologists have already spoken of Cradles and its EIP-3664 as a glimpse into the future of the next generation of blockchain tech.

As a game, Cradles reflects the desire of gamers themselves. A 2021 research conducted by Stratis, a major blockchain platform, found that 61% of gamers studied said that a game’s main feature was its innovation and interesting gameplay.

This, along with the fact that gamers have shown a strong reaction against slapdash NFT implementation in games (such as the backlash in Ubisoft’s NFT decision), proves that gamers have no interest in NFT speculation, but would welcome any new technology enabling new and innovative gameplay mechanisms.

Eager to disengage from the speculatory nature of so-called “Play to Earn” NFT games, Cradles prefers to focus on developing new experiences for the gamer and have taken on the motto of “Play and Earn” instead, emphasizing gameplay, and earning as an incentive, not the primary goal.

Instead of enforcing high-cost barriers to entry, Cradles also intends to be the first subscription-based blockchain game using a World of Warcraft model where players purchase monthly subscriptions to play.

All NFTs in the game are free to collect. Players can harvest raw materials freely and construct their own NFT.

The game also introduces a unique token system dubbed “Staking Into NFT” (SIN), seeking to perfect token economics by addressing old token systems while supporting its future native CRDS token.

Another first, SIN allows passive participants to stake tokens into existing player NFTs, boosting their attributes in return for a share of any rewards gained as a result.

For instance, you can stake tokens into a powerful player’s rare weapon NFT, banking on that player to perform even better and earning more rewards that are then shared with you.

What’s next for Cradles?

Cradles is still in heavy development, but there is already a growing community of loyalists who call themselves “Cradians” spread across their social media channels.

Throughout the past year, Cradles has gone from milestone to milestone. In February 2022, successfully closed a $5 million private funding round led by NFT game venture capitalists Animoca Brands.

Other notable investors included veteran gaming giants and tech VCs like Huobi Ventures, Mirana Ventures, Folius Ventures, Everse Capital, Meteorite Labs, Spark Digital, Foresight Ventures, D1 Ventures, YOUBI Capital, AMPL Capital, Old Fashion, Aussie Capital, Avocado Guild, DUX, Unix Gaming, PathDAO, Infinity Force, Good Game Guild, and PIF DAO.

This year, a mini-game was developed to trial the use of EIP-3664 tokens while pushing out the main Cradles games.

In this game called No Fishing!, playable characters called “Dragontars” – composable NFTs themselves – compete against each other to collect as much fish as possible, while outrunning and outsmarting others trying to capture them.

Essentially, this was the world’s first combinable NFT project, a showpiece of the growing community of Cradians. Launched via a portal dubbed Dragontar Club, it has already run through several community tests. Dragontars themselves are already listed on TofuNFT.

Anyone can bring their Dragontar and perform operations on it using Metacore, a brand new marketplace and workplace for 3664 NFTs, available at www.metacorelabs.io/bsc/.

NFT projects in gaming and metaverse are rightly called pioneers of Web3 technology, but it is important to differentiate between hype and innovation. The rapid pace of new projects utilizing NFTs shouldn’t mask the few companies building on truly unique and truly innovative ideas.

And when the bear retreats in the lengthening shadow of the bull, the crypto market will have these true pioneers to thank.

Follow them on social media:

Cradles: Origin Of Species: Cradles | Whitepaper | Discord | Twitter

Dragontar Links: Dragontar Club

DRepublic Links: Medium | Twitter