Top News
#1: Horizon Raises $40M to Build the Future of Wallets
Horizon recently raised a $40M Series A to help expand its user-friendly Sequence Wallet and proof-of-concept game Skyweaver (which we previously deconstructed here). While Metamask is the wallet that most people think of when it comes to web3, Horizon has been quietly building a major competitor.
Blockchain wallets were created as a better way to manage private keys and perform blockchain transactions, Metamask being the main example. While this has worked well so far, a number of issues arise from the way Metamask works. First, managing private keys is still complicated and risky. Users need to back up both their private key seed phrases and their Metamask passwords because these are stored only on their computers, and if broken or lost, access to their wallets disappears forever. Second, Metamask functions as a browser extension, which works fine on desktop or laptop computers but is problematic when applied to mobile browsers. Third, Metamask is just not very user-friendly; useful features like token swapping and fiat on-ramps are often severely delayed or never released at all.
Horizon was formed in 2017 in order to create Sequence, a wallet that solves many of these problems, and Skyweaver, a game that uses that wallet. Sequence solves the key and password management issues by using a variety of social logins, as well as email. This way, keys now exist in the cloud with retrieval mechanisms. It also works as a website within the browser, which allows it to perform smoothly on nearly any platform and browser. Also, Sequence is much more user-friendly than Metamask, partially thanks to being a web app, which allows for a more robust UI and experience, including token swaps, network switches, NFT viewing, and supporting multiple fiat on-ramps like Ramp, Moonpay, and Wyre. Much like Metamask, Sequence is a multi-chain wallet and is non-custodial but with better security through its multi-key support and functionality for paying gas fees in the user's token of choice.
Despite all this, the primary use case for Sequence so far had been as a wallet for Skyweaver to transact in USDC on Polygon. This has allowed it to set the stage for mobile support, and the wallet has been working for Skyweaver on mobile for at least a year while in beta, giving it an advantage over other games trying to use external wallet apps like Metamask or forcing players to link and manage wallets on their PCs. For extra convenience, Horizon still offers an easy-to-use browser extension as well.
Horizon is taking advantage of the $40M raised by launching a number of expansions. First and foremost, Horizon has partnered with a number of games to support with Sequence, including Sunflower Land, Metalcore, Cyball, Ethernia, Boomland, and more. This is a critical move on the company’s part, taking its polished system and getting traction as something more than just a “Skyweaver wallet.” On top of game wallet support, Horizon has also launched Niftyswap, its automated market maker (AMM) system for Semi-Fungible (ERC-1155) Tokens (SFTs). While NFTs have received much attention, SFTs are also an idea well suited to games; they represent items that are not wholly unique like a trading card that many players may have.
Niftyswap combines SFTs with an AMM to enable increased liquidity for buying and selling without requiring a counterparty. This is already being demonstrated with Skyweaver cards and Sunflower Land resources. Not every game or web3 project is designed to utilize SFTs, but RPGs, trading card games, and many simulation games are compatible with this item type. Niftyswap already supports a few other trading card games, such as Castle Crush, Illuvium NFTs, and Parallel Alpha.
Horizon is planning to use this new funding to expand all of these initiatives and support all major EVM-compatible chains, including newer Layer 2s like Arbitrum and Optimism. It also plans to attract more developers to its platform, which should be especially interesting for mobile games looking to add web3 with fewer wallet headaches. By accelerating support for developers, it allows them to focus on the game element and let Horizon handle web3 interactions across any EVM chain (leaving Solana developers a little out of luck for now). The funding also included some notable AAA publishing backers. Ubisoft was among them, and despite the recent downplaying of its NFT experiments as “research,” it still has a clear interest in developing further in this space. Ubisoft had focused on the Tezos blockchain partially due to environmental concerns, but now that The Merge has made Ethereum and its Layer 2s more environmentally friendly, Sequence starts to have potential as a replacement. Take-Two Interactive is another notable backer that could benefit from Sequence, since part of the Zynga acquisition indicated a desire to build mobile web3 games.
On one hand, Horizon might have originally taken a slow and steady approach by keeping Skyweaver and Sequence in beta for a long period of time, but, on the other hand, both now show extremely high levels of polish. A frequent hurdle cited by web3 developers, especially on mobile, is the difficulty in onboarding new wallet users. Sequence has not only been developed to solve many of these early problems, but it has been battle-tested with an actual game and now a novel SFT AMM system. Although it’s a reach to think that every mobile developer is going to immediately jump onto Sequence now, we expect that the $40M raise will help Horizon make the choice much easier. We also expect the number of games using the wallet, and Niftyswap as well, to increase over the next year as Horizon provides the necessary services and tools to smooth a major transition in mobile gaming.
#2: Sega Announces its First Blockchain Game
After teasing its entry into web3 for a while, Sega has finally revealed its first title. Interestingly, Sega won’t be the one actually developing the game, and it will be built on a relatively new blockchain we covered previously, Oasys. The developer will be Double Jump Tokyo, which has some web3 development experience, but the game will be based on a Sega arcade IP, Sangokushi Taisen. The game’s arcade version (which interestingly tried and failed to achieve a stateside presence via Dave & Busters) is notable for being a real-time strategy game that uses physical trading cards moved around on a flat glass surface to spawn and control groups of units. While there may be a clear relationship between trading cards and web3, no details have been given as to what the actual gameplay would look like.
While the announcement is short on details, we expect this will be one of many Oasys games coming out of major Japanese developers. Sega may have stopped creating game consoles, but it has had years of experimenting since, especially in the weakening arcade industry. It only makes sense that Sega would be one of the companies willing to take the web3 leap. Sega has indicated that its “super game” project would include NFTs and arcade games. There is definitely a possibility that the Sangokushi Taisen arcade series could go from being an early adopter of trading card games to one of NFTs as well. There are already attempts at combining physical trading cards with NFTs, and internet-connected arcades are a fairly regular sight in Japan.
Much like F2P in general, western game developers seem to be dragging their feet on their way to web3 compared to their eastern counterparts. Japan also has a vibrant trading card game scene outside of arcades. With collectibles being a strong match for NFTs, we expect them to be a common part of Sega and other Oasys partners’ future plans along with leveraging existing IPs, as Square Enix has been leaning towards. Sega’s arcades are like many other Japanese ones and known for their gimmicks (both physical and digital), which would make NFTs a good fit and something more than just part of Sega’s “super game” project.
Game Launch Radar
- Epic League launched its ARPG, Dark Throne, in partnership with Polygon. Link
- Pixion Games announced a Fableborne pre-alpha playtest to gain community feedback on October 15th-16th. Link
- Dustland Running, a move-to-earn bike-based fitness game from OliveX, announced an alpha version for Operation Ape Access Pass holders. Link
- Mouse Haunt has launched early access for its Dodgeball Arena PvP game. Link
- Drunk Robots launched a public visualization test for its PvP mode for NFT holders. Link
- Champions: Ascension released pre-alpha gameplay experiences for Prime Eternal NFT holders. Link
- Haste Arcade launched its Monster Bombs game on the BSV blockchain. Link
Other Game Announcements
- N3twork Studios officially unveiled Legendary: Heroes Unchained along with a mini-game playable in Discord. Link
- Star Atlas launched a pre-alpha showroom demo. Link
- MonkeyLeague released new details of its twists on the breeding system. Link
- Civitas announced new hires along with the release of a character NFT mint and utility details. Link
- Medieval Empires announced a partnership with Nefta to increase web3 accessibility. Link
- Voxie Tactics announced a new NFT renting feature for NFT and token rewards. Link
- Pegaxy announced a series of dramatic economic changes to make its token deflationary. Link
- Heroes of Mavia announced a roadmap update including a delayed beta and released alpha gameplay footage. Link
- Thetan Rivals, from the developers of Thetan Arena, released a gameplay sneak peak. Link
- Arc8 launched the pre-season for Season 5, which will include a new game. Link
- Monsterra announced an updated quest system. Link
- Undead Blocks announced a new multiplayer squads mode. Link
- Delysium released a playable whitepaper as part of a 2D browser-based cyberpunk game. Link
- Gods Unchained announced two upcoming competitive events in partnership with AQUA.xyz. Link
- Panzerdogs launched a new game mode and additional new features. Link
- Nyan Heroes released details on the utility of a Genesis Nyan NFT. Link
- DeRace, a horse racing game, released new details on a planned gameplay expansion. Link
Funding Announcements
- Space and Time, a web3 decentralized data warehouse, secured $20M in a round led by Microsoft’s venture fund M12 fund. Link
- Yield Guild Games purchased 22 of Limit Break’s DigiDaigaku NFTs worth $51,303 at the time of purchase in the open market. Link
Ecosystem Updates
- WAX Studios announced a rebranding as Tyranno Studios to support a pivot to multi-chain game compatibility. Link
- Warner Music Group announced a partnership with OpenSea as it dives deeper into web3. Link
- Metamask released a beta of its portfolio dapp. Link
- Lamina1, the blockchain project co-founded by Neal Stephenson, announced organizing the Open Metaverse Conference in LA on February 8th-9th. Link
- XPLA, a blockchain mainnet built by Com2Us, announced a partnership with Xterio to bring content to the chain. Link
- Passage, an ecosystem for connecting metaverses and virtual worlds, announced staffing of executive roles, such as CEO, with former Enjin execs. Link
- Klaymeta announced cross-chain compatibility with BNB chain, allowing transfers between both chains. Link
- OpenSea announced support for its sixth blockchain, Optimisim. Link
Notable Market Moves
- It was a relatively unexciting week in the blockchain games financial market. Prices of the top 10 tokens were roughly flat, if not slightly down on average.
- ApeCoin performed the worst (-5.6%). As mentioned last week, ApeCoin is coming off a time of significant hype, and we expect those high levels of optimism to ease until the next bout of activity around DAO proposals, partnerships, or Otherside updates picks up again.
- StepN was up a slight 0.8% despite the bubble of its economics having fallen apart (perhaps more so than Axie Infinity’s). While it has managed to still hover around the middle of the top 10, it also has experienced the biggest 90-day drop (-36%). Despite GMT still relatively high market cap of $388M, the project shows no real signs of recovery, and the utility token, GST, continues to reach new daily all-time lows.
- Gala also ended the week unscathed thanks to the announcement of a partnership with Universal around Trolls VOX collectibles. Gala has been able to secure some decent licensed properties, which should help in the long-term, but it also hasn’t brought in a large enough new playerbase in the short-term.
- As always, even though we cover the market week-to-week, we want to remind you to look long-term. It’s true that many of these top projects will likely continue to struggle — and will be dethroned by superior projects in the future that are deserving of such large market caps — and that change should provide plenty of opportunities.
Content Worth Consuming
The History of Gaming and Its Web3 Future (Galaxy Digital Research) - “An early lesson from web3 games is that liquidity can be both a blessing and a curse. On the one hand, liquidity for in-game assets is good for players because it gives them an avenue to monetize their skills. Even players who simply engage with the game on a deep level and develop their own in-game alpha based on their unique insights can be rewarded in an environment of liquid markets. However, liquidity has also turned out to be a breeding ground for users who flood the game for money and detract from the overall experience. We witnessed this dynamic play out most prominently in a couple key web3 games.” Link
Level 9: Factory NFTs & Recourse After Hacks/Scams (Metaversus) - “Consider: when a Bored Ape is stolen, since the value of the Bored Ape comes (primarily) from its signaling potential as a PFP, direct ownership of the NFT and verifiability of that ownership. However, because the value of a Factory comes from its downstream ability to create Products, it stands to reason that there’s a different solution that can be implemented by the operating company/team.” Link
Crypto Gaming and NFTs: A Nuanced Perspective (Meandering Musings) - “What we are looking for is a combination of IP that players care about and an incisive understanding of what drives sustainability in open economies, together with a balanced go-to-market approach that will resonate with the crypto core but has the potential to expand into the mainstream market. Flexibility to invest at all layers of value accrual – whether collectibles (NFTs), tokens, or equity – will be key.” Link
Measuring the Impact of Ethereum’s Merge on Layer-2 (DappRadar) - “After the Merge, Ethereum is still far from becoming the final product that Buterin envisioned it to be. The user experience is negatively impacted by the lengthy withdrawal periods associated with optimistic roll-ups, while sharding scaling solutions are still many years away from being implemented. With new L1s immediately delivering high transaction capabilities but still lacking Ethereum’s desirable level of security, the world’s leading Web3 network must immediately deliver speed and cost efficiencies for dapp developers and users. This is because new L1s deliver high transaction capabilities right off the bat.” Link
What Do You Own - Undead Blocks Edition (Matt H Gaming) - “The end result is that whilst you might own a NFT, all that NFT is doing is placing a call to the Undead Blocks services, services which are owned and controlled by Wagyu Games. You don’t even own the asset metadata, because it’s being pulled through the API from the Undead Blocks website. There’s that old joke about NFTs just being a link to a jpeg, which fits perfectly here because although it’s not a link to a jpeg, it is simply a link to data which is stored on a centralized service. The only element which is decentralized is the token itself, and sure, that means nobody can take it out of your wallet, but it doesn’t prevent Wagyu Games from making whatever changes it likes to the asset it’s associated with. It controls the metadata, it controls the images, and it controls the asset you use in the Undead Blocks game.” Link
'Please mom!' Kids enticed by web3 projects with plush toys, adorable avatars (The Block) - “Andreessen Horowitz, or a16z, has invested in other companies seemingly tailor-made to steer younger consumers toward web3, including Cryptoys, an NFT-native gaming platform which secured capital from both toymaker Mattel and web3 game-focused investment firm Animoca Brands. Efforts to educate kid consumers about cryptocurrency and web3 date at least as far back as 2020 when SHAmory launched a card game designed to teach young players the basics of Bitcoin mining. The Block previously reported that many older crypto enthusiasts said they enjoyed playing the game with their children; even kids as young as five years old. Since then, the number of high-profile projects has piled up.” Link
Identity in the metaverse (The Metacast by Naavik) - “On this week’s Crypto Corner, Disco.xyz CEO and Co-founder Evin McMullen joins BITKRAFT Partner Carlos Pereira and host Nico Vereecke for a conversation about identity in the Metaverse, decentralized Identifiers, verified credentials, the limitations of NFTs, and Soulbound Tokens.” Link
