Original Author: Elena Burger, A16z Encryption Analyst
Original Compilation: Kyle, The Way of the Metaverse
A core value unique to web3 is composability: the ability to take assets or data generated by one protocol and use it with another. In web3 games, composability unlocks something powerful - for the first time, players can participate in directing the mechanics and value of the game itself.
If you look at many of the most popular games in web3 history (very early!), you'll notice that composability is in the DNA of all of them. It's no exaggeration to say that these games succeeded because their developers built them with composability in mind.
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On the surface, CryptoKitties seems simple
Raise two cats, breed them and create an offspring cat with rare Cattributes. But the act of actually giving birth to CryptoKitties requires the innovation of smart contract architecture and allows a whole new economy to emerge.
CryptoKitties had to grapple with the reality of on-chain design: there are no timers in the Ethereum network to dictate when contracts are executed. While theoretically the time between breeding and delivering a cat is about 40 minutes, an external actor needs to call this function.
This reality has created a new (white hat!) ecosystem of robo-operators entering and earning user-paid fertility fees.
Since the CryptoKitties contract is open source, users can even create entire frontends to call giveBirth(). Back in 2018, a user like @domiek was making about $100 an hour just doing this.
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But Axie is quickly moving beyond NFT collectibles
Entered a more complex game of combat and strategy, which required earning experience points, which later turned into a fungible ERC-20 token called Smooth Love Potion (SLP). Early in the history of SLP deployments, the team noticed something interesting.
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It's hard to overstate how radical this is. It is not possible for players of a web2 game to immediately create an ERC-20 pool, port their in-game assets to an automated market maker (AMM) like Uniswap, and then swap them for another token outside of the game's own wrapper.
These worlds are designed to be closed, not composable. Web2 assets are restricted to games or platforms like the Steam Community Market, so there is no way to transfer items or money out of the ecosystem. Composability between assets and protocols makes SLP pools possible.
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None of this would have happened without the initial SLP-ETH pool on Uniswap, made possible through composability between protocols. For the first time, users are able to determine the economic value of the game they are playing, and then extend that value to the physical world.
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Dark Forest has two key innovations
1) All game logic is on the chain, which is convenient for developers to create plug-ins and customize clients
2) It was one of the first "incomplete information" encrypted games; players only knew their location and the planets they owned
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The coolest addon for Dark Forest user generation is Broadcast Market, which created a trading platform that allows users to reveal the location of one of their planets daily in exchange for a bounty, allowing users to value the in-game data itself.
You may have noticed that in these examples, value emerges organically around player output and consensus. CryptoKitties has fertility bots and add-on games, Axie community members created the first SLP pool and accepted it as IRL currency, and Dark Forest has information mining and brokerage services.
One of the biggest fruits of composability is that it allows digital value to persist in the "real world". In fact, it is power that breaks down the barrier between the two. We are post-"virtual" and "physical" - only permeable spaces where value can flow freely.
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