Go up to someone in public and ask them about blockchain, and nine times out of ten they won’t know (or care) what you’re talking about. How do we change that? Roham Gharegozlou, the mind behind the CryptoKitties virtual cat phenomenon, believes the answer lies in games.
His reasoning is sound. Games are amusing. Blockchain isn’t—at least not to the everyday person. The best way to introduce something serious is with some fun sprinkled in. Gharegozlou understood how people on the internet like cats and that blockchain technology isn’t quite ready for full-on gaming experiences, like say Witcher 3 on Xbox.
Developed by Vancouver-based Dapper Labs, a subsidiary of Gharegozlou’s venture fund Axiom Zen, CryptoKitties is a seemingly simple game where you breed cats on a blockchain. You then breed those cats with other cats, and so on. Every cat is unique, unlike anything else in existence, a “non-fungible asset.” Gamers can then sell their Kitties for ether, creating value for their invested time (so cat enjoyment is only one benefit of playing).
This new approach to ownership rung loudly with the gaming community. Since its launch in November 2017, CryptoKitties has remained a top Ethereum dApp according to Dappradar.com. The game had been so popular that its users have congested the Ethereum network. In a time where platforms like TRON and EOS are just now gathering funding for game development, and where most blockchain companies are still struggling to find their footing, Gharegozlou’s triumphs have established him as a leader in the decentralized space. Crucially, his project actually works.
BREAKER reached out to Gharegozlou to speak about CryptoKitties, the future of blockchain-based gaming, and Dapper’s recent $15 million funding, one of several recent capital raises and significant happenings in the space.
What are you using the $15 million for?
Research and development across three different dimensions. The first is more games and collectibles. We’re not just about games, but non-fungible tokens, digital assets that people can own. Today, that is best done with in-game assets, but one day these may be some reputational items or achievements by people in, say, esports. Say you won a global competition—you should receive a unique in-game item to represent that, like a costume. Something that nobody else has.
We’ve been testing unique assets with CryptoKitties. Right now, it’s more of a collectible game than a hardcore experience. There isn’t yet much you can do with these assets. But we will be building more content. We want to give the kitties themselves expanded utility and make it easier for others to engage with this universe.
People play this dangerous game of compromising decentralization to make it easier to use.
And the second dimension?
Accessibility. Many projects are working to make it easier to get into crypto, but we see people play this dangerous game of compromising decentralization to make it easier to use. For us, that’s an issue because the value to your customer is that trust and decentralization. Of course, a chain will provide some level of trust, but we think that trust should be at a level where the customer has the choice to move away from you.
And the third?
Scale. For scalability, the network speed is important. There are a lot of layers to scaling solutions, but we’re seeing what we can release our upcoming experiences on. We’re trying to go deep into the stack and make sure we’re building on solid ground. It’s a lot of stuff, hence the new round of financing. We’re all about bringing those things to market and expanding our team. We set up an office in L.A. We’ve brought on executives from Unity and Disney and Ubisoft.
Ultimately, we’re working on putting the customer in control. We want to make it as easy as possible for people to buy a cat, so we’re interested in talking to any companies that can help with that. The good thing is that in the world of decentralization, it’s easy to mix and match these different solutions.
Talk about how CryptoKitties came to be?
We believe that access to open networks makes people’s lives better. Blockchain is a supercharger to the internet and open source. We’ve always been excited about the technology but were distraught to see opportunists rushing to the market due to the hype. They were pitching what the technology is capable of but nowhere near ready for. So we wanted to create a product that was ready for the times and show people where we were at in the technology cycle. We were settling on a way to get people to understand what’s cool here from a non-financial perspective.
Our core user base is maybe the first group of people in crypto who are here not because of speculation, but because of the deeper meaning of decentralization, such as true ownership of their assets. In this new world, you are part of this open game where you’re not just a player but creating things of value. You’re economically invested and benefiting from this value. We built the original assets, but other teams are making spinoff experiences and additional utility for those same tokens. Users are starting to understand what it means to hold a blockchain asset and be part of an open platform.
Words of wisdom, for sure.
Mack Flavelle, cofounder and chief creative officer of Dapper, has this strong faith in cats. His mantra from the beginning was cats on the blockchain. How do we make that work? We said let’s take the cats and create a game that exemplifies the values of the blockchain. Just like bitcoin is limited to 21 million, we can limit these to 50,000. Just like how smart contracts are this idea of publishing rules openly, let’s publish the breeding algorithm openly and let everybody understand that this game is immutable, then let other developers build on top of that.
Ownership and interacting with something you create is a massive part of gaming. Modders generate and share content all the time, but there isn’t much revenue in doing so. Are you creating a platform for modders to profit from their creations?
That is a good way to think about it. I haven’t heard a ton of people talk about it in the way of ‘incentivizing modding.’ It’s a game designed to be modded. What we’ve created with CryptoKitties are digital assets that have one piece of functionality which is to breed and produce more. Anyone can come and build additional functionality for these kitties and tap into the existing community. The players have created almost all of our 1.3 million cats, so it’s sort of a user-acquisition channel for other games.
CryptoKitties, and non-fungible tokens as a whole, are about much more than just ownership, and we’re going to do a better job of telling that story. They’re about the reputation you’ve earned in the game, achievements you’ve conquered, and connections you’ve made. They can also be access keys into new experiences built by third party developers. But zooming out a bit, blockchain is about one simple thing: open platforms and giving freedom, choice, and control back to the consumer. This is what we hope all our applications will demonstrate.
Blockchain is about one simple thing: open platforms and giving freedom, choice, and control back to the consumer.
Where do you see CryptoKitties a year from now?
We will start with accessible experiences that grow the player base and expand the universe the Kitties play in, as well as bridges to other blockchain games and non-fungible tokens. We also want to help the network of third party developers building on CryptoKitties, we call them the KittyVerse, be successful, so they create mods and additions to the larger studio initiatives, and bring full-scale new products to market.
Will we see a full-fledged 3D adventure game version of CryptoKitties?
Depends on your definition of soon. We’ve done a couple of little experiments—CryptoKitties in VR, for instance. Playing Angry Birds on the Magic Leap makes me want to have CryptoKitties in virtual reality. But that’s all de-prioritized in favor of making the basic experience more accessible and understood by more of the mainstream.
You play any other games?
Civilization has always been a favorite. Fortnite and other mainstream titles are important to see what the market is into. I also really like strategy games.
What had you interested in blockchain in the first place?
A big part of why I love being involved with new technologies early is to have a say in how they develop—to make sure they are open, fair, and with incentives that benefit the customer.
How did you get involved?
When we started Axiom Zen in December 2012, our thesis was that by combining a deep engineering organization with a healthy respect for design thinking and a focus on large markets, we could create the kind of magic that led to CryptoKitties and make a positive impact. My cofounder and CTO Dieter Shirley joined us soon after our founding, in October 2013. Dieter mined his first bitcoin in 2010 and similarly shared a commitment to open platforms.
Also, the years 2010-2012 marked the turning point for web 2.0: Facebook ended its “special agreement” with Zynga in November of 2012, and Twitter put the final nail in the coffin of its early relationship with developers that same year by imposing strict API usage limits.
Have you looked into building a game on another blockchain like TRON or EOS?
The one thing we’re doing right now is Ethereum. There are a lot of people working on the other technologies. But choosing a blockchain network is like selecting a jurisdiction for where you’re basing your company. Essentially the property you’re selling to these customers—the cats—are governed by this jurisdiction. So we need to make sure we operate within it. Also, from a blockchain perspective, I don’t think anyone else has yet proven they are ready for scale.
Any advice for up and coming blockchain game developers?
Trust is the central value proposition that blockchain assets have over the present counterpart. You’re asking users to pay a hundred to a thousand times more money to experience something that’s often lower fidelity where trust is the only benefit. So if you base your project on the wrong smart contract network, you’re ruining that trust from the get-go. You’re eliminating the value of blockchain right away.
Conversely, don’t do things that compromise people’s trust in you. Developers have their choice of which protocols to build on. They’ll want protocols that have long-term sustainability and the best reputation. Building on Ethereum today is probably the least worst option. There are interesting projects in development that I’m not ruling out, but these projects need to earn their trust first.
Correction: Mack Flavelle is the chief creative officer of Dapper Labs, not CTO.