Why Gaming Appchains Are Betting Everything on Custom VMs

The Ethereum Virtual Machine processes transactions sequentially, creating a hard throughput cap. For games with hundreds of concurrent players, this results in >10s latency and $10+ gas fees per micro-action, killing UX.

• Sequential Execution: Every swap, move, and trade queues up.
• State Bloat: Every NFT mint and item transfer pollutes the global state.
• Cost Insanity: Players subsidize DeFi's arbitrage wars.

Appchains like Solana (Sealevel) and Sui (Move) prove parallel execution works. Gaming VMs like Paima Engine and Argus take this further with game-specific opcodes.

• Parallel Processing: Non-conflicting player actions execute simultaneously, enabling ~500ms finality.
• Tailored Operations: A single opcode can handle a complex game state transition, reducing compute load by ~90%.
• Deterministic Fees: Predictable, sub-cent costs decoupled from L1 gas volatility.

Shared L2s like Arbitrum and Optimism must balance fees for all dApps, forcing games to compete with DeFi for block space. Their EVM-equivalence is a tax on innovation.

• Fee Markets: A mempool auction for NFT mints is economic nonsense.
• Revenue Leakage: >80% of sequencer fees leave the game's ecosystem.
• Token Utility Void: The chain's native token has no bearing on the game's economy.

A custom VM allows a game to define its own fee token and sequencer logic. Projects like Immutable zkEVM and Skale enable this, turning cost centers into revenue engines.

• Sovereign Sequencing: 100% of fees are captured and redistributed via staking or burn.
• Gas Token = Game Token: Players pay fees in the game's asset, creating constant buy pressure and utility.
• Custom Inflation Schedules: Mint/burn mechanics are baked into the protocol layer.

EVM's account-based state model is ill-suited for games, which require complex, interrelated objects (e.g., player inventory, land maps). Managing this with smart contracts leads to spaghetti code and exponential gas costs.

• Storage Overhead: Representing a character's 10-item inventory requires 11 separate contract calls.
• No Native Assets: Every sword and potion is a cumbersome ERC-1155, not a first-class primitive.
• Upgrade Hell: Patching game logic requires risky proxy contracts or migrations.

Custom VMs bake game logic into the base layer. Move's resource-oriented model (used by Aptos, Sui) and Fuel's UTXO-like model provide atomic composability and safe asset handling by design.

• First-Class Objects: A 'Character' or 'Spell' is a native, securely typed resource.
• Atomic Composability: Equip item, cast spell, and pay fee in one unstoppable transaction.
• On-Chain Upgrades: The VM can be forked and upgraded by the game's DAO without breaking state.

Ethereum's 256-bit word size and stack-based architecture are overkill for game logic, adding ~100-200ms of overhead per transaction. This kills real-time interactivity.

• Solution: Custom VMs with 64-bit primitives and register-based execution (e.g., FuelVM, MoveVM).
• Result: Sub-100ms finality and 10-100x cheaper in-game micro-transactions.

Games need deterministic, fast state transitions, not slow, expensive consensus. Deploying a full appchain is heavy.

• Solution: Paima Engine implements a custom gaming VM as an L2 state channel, compressing gameplay into single L1 settlements.
• Result: Enables fully on-chain games like Warpcast's games with <$0.01 transaction costs and instant feedback.

Monolithic blockchains process transactions sequentially, creating artificial latency. A player's move shouldn't wait for an unrelated NFT trade.

• Solution: Custom VMs with native parallel execution (e.g., Sui's Move, Aptos' Block-STM).
• Result: Linear scalability with cores. Parallelizable game loops can achieve ~5,000-50,000 TPS for in-game actions.

ERC standards are generic and verbose. Complex game items (e.g., a sword with 10 mutable attributes) require dozens of storage slots and cross-contract calls, exploding gas costs.

• Solution: Custom VMs with native asset primitives and resource-oriented models where assets are stored in player accounts, not contracts.
• Result: Single-instruction transfers of complex objects, reducing upgrade/transfer costs by >90%.

Axie Infinity's success broke Ethereum. The need for predictable, low-cost transactions for millions of users forced a hard fork.

• Solution: The Ronin sidechain with a custom, EVM-compatible but gaming-optimized client. It controls the stack end-to-end.
• Result: ~500k daily active users sustained, with $0.001 average transaction fees and dedicated security for its ecosystem.

The endgame is a VM that is a game development SDK. Think Unity/Unreal, but for fully on-chain games with built-in economics.

• Solution: VMs with native randomness oracles, tick systems, and matchmaking primitives (e.g., Argus's World Engine, Lattice's MUD).
• Result: Developers ship complex Autonomous Worlds without building underlying consensus, cutting dev time from years to months.

Every Ethereum node processes every transaction, making high-TPS games economically impossible. A game with 1M daily active users generating 10 transactions/hour would produce 240M daily state updates, crippling any shared chain.

• Shared Burden: Non-players subsidize game state costs.
• Throughput Ceiling: Bottlenecked by the slowest dApp on the chain.
• Fee Volatility: Network congestion from an NFT mint can price out all players.

Custom VMs like Move (Sui, Aptos) or FuelVM enable parallel transaction processing and isolated state. This is the core bet: decoupling game economics from the broader ecosystem.

• Deterministic Latency: Game logic executes in ~100-500ms, independent of DeFi activity.
• Predictable Costs: Fees are set by the appchain's own validators, not a global auction.
• State Rent: Games can implement custom gas models for storage, a non-starter on Ethereum.

Abandoning the EVM means forgoing the largest developer ecosystem in crypto. Recruiting and training developers for novel VMs like Move or CosmWasm is a multi-year, capital-intensive gamble.

• Tooling Gap: Missing the robust suite of debuggers, auditors, and frameworks found in the EVM.
• Security Novelty: New VM opcodes introduce uncharted attack vectors.
• Liquidity Fragmentation: Isolated from the $50B+ DeFi TVL on Ethereum L2s, requiring custom bridges.

Winning requires composability, but custom VMs create walled gardens. Bridging assets and messages via LayerZero or Axelar introduces latency, trust assumptions, and security risks that break game immersion.

• Settlement Lag: A 2-5 minute bridge finality destroys real-time trading.
• Oracle Dependency: Cross-chain state often relies on external oracles, a single point of failure.
• Fragmented UX: Players manage multiple wallets and gas tokens, a massive adoption barrier.

A pragmatic middle path: using a custom execution environment (like Rollkit) on a modular data availability layer. This retains sovereignty while leveraging Ethereum for security and bridging.

• Modular Security: Inherits Ethereum's validator set via EigenLayer or Babylon.
• EVM Compatibility: Can still run an EVM rollup for DeFi, side-stepping the talent gap.
• Exit to L1: Players can force withdrawals to Ethereum, a credible neutrality guarantee.

This is the fundamental bet. Gaming appchains sacrifice the immediate composability and liquidity of Arbitrum or Polygon for long-term control over their economic and technical stack. The gamble is that superior gameplay will attract its own ecosystem.

• Winner-Takes-Most: A single hit game could bootstrap an entire chain's economy.
• Vertical Integration: Full control over sequencer revenue and MEV capture.
• Existential Risk: Failure to attract developers and players results in a ghost chain with >$10M in sunk dev costs.