🥶 GCP faces freeze

Hey frens, welcome back to The Drop.

It’s Friday, and I was up late last night chasing a very interesting story I hope to share with you soon. The best things come to those who wait, haven’t you heard? 

I also got access to Wildcard’s playtest, so I’ll be checking that out tonight. 

Today we’re talking about Arbitrum, Kaidro, Ronin and more. Let’s dive in!

— Kate Irwin

P.S. Let me know how you’re liking The Drop! Send me an email at [email protected].

Unpacking the Arbitrum Gaming Catalyst clawback

Just last week at the Game Developers Conference, I caught up with two key members of the Arbitrum Gaming Catalyst Program (GCP): Daniel Peng, founding partner, and Rick Johanson, founding partner and VP. 

During the interview, they shared a glowing vision for a gaming-focused future on Arbitrum. They said have been in discussions with 100 different gaming projects to see which ones might build on their chain. 

“I think where we are in the life cycle of gaming and Web3, is trying to figure out what the biggest value adds that we can provide with our resources is in order to ensure there’s some successes in our industry, right?” Peng told me. 

“Still very much early. At the same time, I think we provide a pretty mature toolkit compared to a lot of other networks,” he added.

Arbitrum also had the largest (and therefore priciest) crypto booth at the gaming conference, featuring about a half-dozen different titles using Arbitrum in various stages of development and a challenge where you could play those games to earn Arbitrum merch.

But this week, things have gone cold. The Arbitrum DAO, which greenlit the GCP in the first place, is now considering a proposal that would claw back all unused ARB tokens allotted to fund the GCP’s ambitions. The program had previously been granted 200 million ARB tokens last year, which was worth about $215 million at the time. 

ARB’s now down over 79% in the past year.  

“The GCP has repeatedly shown a reluctance to adequately document its activities and performance. Instead of embracing transparency, the program has recently sought to increase contributor compensation and lower its own reporting requirements,” part of the proposal reads. “Given these failures, the risks associated with a lump-sum allocation of funds, and the mounting concerns raised by the community, it is time to cut our losses.”

Arbitrum DAO member Nathan van der Heyden co-published the proposal to kill GCP funding. 

“The GCP was created in overly optimistic times. With key backers now gone, it’s clear the program isn’t delivering on its promises,” Heyden argued.

“The GCP was a failure,” wrote DAO participant Argonaut in agreement with the proposal.

“I fully agree with this clawback,” another participant wrote. “For the amount allocated what has it gotten us? Arbitrum gaming will grow but this amount of ARB was always outrageous when DeFi is what has gotten this L2 where it is.”

While some DAO participants agreed with the proposal, others — like GCP councilmember and Offchain Labs Head of Gaming and Consumer Partnerships David Bolger — believe the program is worth saving.

“No chain can remain competitive without allocating financial resources to attract and support builders,” Bolger wrote. “The industry is fiercely competitive, with rival chains routinely offering grants ranging from $5M to $100M.”

He’s not wrong about that, for sure — I’ve recently heard rumblings that other gaming-focused chains are paying game developers anywhere from $10 million to $30 million just to “partner” with them to build a game in their ecosystem.

“To date, over 50 deals have been put forward to the GCP, yet fewer than 5% have reached the final stages — demonstrating a clear commitment to due diligence,” Bolger added.

After the clawback was proposed, the GCP hired Castle Labs as its “DAO Relations partner” to see if more communication could change hearts and minds. 

On the Arbitrum Foundation forums, Johanson said the team is taking action to improve communications between the GCP and the DAO — hiring Castle being one of those actions. 

I reached out to Peng and Johanson for their thoughts on this proposal. 

Johanson said: “We currently don’t have anything to share on this topic, but if that changes, we’ll be sure to update you.” 

Overall, I’m not sure that the juice is worth the squeeze for every chain that decides it wants a gaming ecosystem. 

Arbitrum is also an open, permissionless ecosystem, so devs don’t need the GCP’s permission — or anyone’s — to just launch a game there without getting paid. 

Is it worth spending a hundred million just to convince some devs to make crypto games that are more likely to flop than not, some of which may ultimately leave the chain or never even launch? 

Maybe it would be a better idea to narrow that scope to reduce risk and start small but focused — instead of trying to be the biggest player at the poker table.

Ronin battler game Kaidro offers playtest

The scifi multiplayer game Kaidro: Clan Battles inspired by the comic book series is opening up a playable demo of its battler game starting today. 

The NFT-optional game originally planned to launch on one of Immutable’s blockchains, but it switched over to Ronin last year. There’s also the Kaidro token KDR on Ronin, which was announced in December.

Kaidro’s aesthetic blends magic with tech and Japanese manga. The game asks players to choose a clan, with names like the Bubblegum Violence Clan, Grimbone Clan, and Emerald Hand Clan.

I’m digging the art and narrative style I’ve seen so far. 

This round of playtesting will go from March 28 until March 31 at 2 pm ET. The alpha release is expected to launch soon.

Ronin Wallet adds DeFi, lending, and token yields

Ronin is starting a $13 million fund to award DeFi builders on the blockchain and is also launching Ronin Wallet features that enable more ways for users to earn in the ecosystem.

Ronin Wallet users can now earn token yields on idle tokens in their wallet, borrow and lend wallet assets, and engage in liquid RON staking.

DeFi firm Compound is bringing this DeFi infrastructure to Ronin, with Ronin and Compound also setting aside $1 million in COMP and RON tokens as rewards. Separately, the $13M fund from Ronin is intended to fund more DeFi liquidity, fund incentives and adoption.

“A strong DeFi ecosystem is essential to sustaining long-term growth on Ronin,” said Sky Mavis cofounder and CEO Trung Nguyen in a statement.

• File storage protocol Walrus launched its mainnet on Thursday. Mysten Labs CEO Evan Cheng described it as Sui getting a programmable disk drive.

  • Dinosaur-themed collectibles project Claynosaurz has started using Walrus to store its data and future activations.

• YZi Labs, formerly known as Binance Labs, is hosting a hackathon on April 12 to focus on founders developing AI-meets-crypto projects.

• In case you missed it, the Sei Foundation wants to buy the bankrupt genetic analysis company 23andMe — and Story Protocol thinks your genetics are your IP (yikes).

My sister turned my cats into Ghibli characters, and I’m obsessed: