Web3 gaming infrastructure is not a bet on a single hit game. It is a bet on open standards and composable assets creating network effects that walled gardens cannot replicate. The value accrues to the protocol layer, not just the application.
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Why Web3 Gaming Infrastructure is a Bet on Open Standards
The next wave of gaming will be built on open protocols for assets, identity, and state. This analysis argues that value accrues to these composable standards, not to closed ecosystems that attempt to wall off users and liquidity.
introduction
THE BET
Introduction
Web3 gaming infrastructure is a strategic wager on open, composable standards winning over closed ecosystems.
Closed ecosystems like Steam lock assets and user graphs. Open standards like ERC-1155 enable assets to move across games, marketplaces like OpenSea, and wallets. This interoperability is the structural advantage.
The infrastructure bet is on tooling that abstracts complexity. Engines like Unity integrate with SDKs from Immutable and Starkware to make this standard accessible. The game is the frontend; the chain is the backend.
Evidence: The $10B+ valuation of Immutable and the migration of major studios signal capital's conviction. The infrastructure layer captures value from all games built on it, not just one.
key-trends
WHY WEB3 GAMING INFRASTRUCTURE IS A BET ON OPEN STANDARDS
The Three Pillars of Open Gaming Infrastructure
Closed ecosystems extract value and stifle innovation. Open standards are the only path to sustainable, composable gaming economies.
01
The Problem: Walled Garden Asset Silos
Legacy gaming platforms lock assets and data in proprietary databases, destroying liquidity and player ownership.\n- Zero Interoperability: A Fortnite skin is worthless outside Epic's ecosystem.\n- Extractive Fees: Platform fees of 30%+ are standard, draining developer revenue.\n- No Secondary Market: Players cannot trade or sell assets they 'own', capping value creation.
0%
Portability
30%+
Platform Tax
02
The Solution: Programmable Asset Standards (ERC-1155, ERC-6551)
Token standards like Ethereum's ERC-1155 (for semi-fungible items) and ERC-6551 (for token-bound accounts) turn game assets into composable financial primitives.\n- True Ownership: Assets are held in player wallets, enabling permissionless trading on markets like OpenSea and Blur.\n- Cross-Game Composability: A sword from one game can be used as a governance token in another via shared standards.\n- Developer Royalties: Enforceable, on-chain creator fees replace opaque platform cuts.
100%
Player Custody
$20B+
NFT Market Cap
03
The Enabler: Modular Execution & Settlement
Monolithic game engines and L1s cannot scale. The future is specialized layers: a rollup for game state, a shared data availability layer, and a sovereign settlement hub.\n- Scale & Cost: Rollups like Immutable zkEVM and Arbitrum Orbit offer ~$0.001 transactions and ~2s finality.\n- Sovereignty: Games control their chain's economics and upgrade path without forking.\n- Interop via Bridges: Secure asset transfer between chains via protocols like LayerZero and Axelar.
~$0.001
Tx Cost
~2s
Finality
WHY WEB3 GAMING INFRASTRUCTURE IS A BET ON OPEN STANDARDS
Open vs. Closed: A Protocol-Level Comparison
A technical breakdown of how open, composable protocols create durable value versus closed, siloed ecosystems.
| Core Architectural Feature | Open Protocol (e.g., Immutable zkEVM, Arbitrum Orbit) | Semi-Closed Chain (e.g., Ronin, SKALE) | Fully Closed Appchain (e.g., Proprietary L1) |
|---|---|---|---|
Smart Contract Deployment Permission | Permissionless | Permissioned (Curated) | Permissioned (Centralized) |
Native Interoperability Standard | EVM Equivalence | Bridged via Validator Set | Custom Bridge Required |
Asset Portability (e.g., NFTs) | Native via IBC/CCIP/LayerZero | Via Official Bridge Only | Vendor-Locked |
Developer Tooling Compatibility | Full EVM Stack (Hardhat, Foundry) | Modified SDK Required | Proprietary SDK Only |
Sequencer/Prover Decentralization |
| ~21 Validators (DPoS) | 1-5 Validators |
Protocol Upgrade Governance | On-chain DAO / Token Vote | Foundation + Validator Vote | Corporate Decision |
Data Availability Layer | Ethereum, Celestia, Avail | Dedicated Chain Cluster | Centralized Servers |
Exit to L1 Finality | < 1 hour (Ethereum) | ~1-7 days (Challenge Period) | Not Applicable |
deep-dive
THE NETWORK EFFECT
The Composability Flywheel: How Open Standards Win
Web3 gaming infrastructure is a bet on open standards because they create irreversible network effects that proprietary systems cannot match.
Open standards are non-negotiable. They enable permissionless composability, allowing assets from one game to function in another without developer coordination. This creates a positive-sum ecosystem where every new application adds value to all others.
Proprietary ecosystems are dead ends. Closed systems like Apple's App Store or traditional gaming engines create walled gardens. In Web3, this manifests as isolated chains or custom tokens that cannot interact, stifling innovation and liquidity.
The flywheel is self-reinforcing. A developer building on Ethereum's ERC-20/721 or Solana's Token-2022 standard gains instant access to every wallet, DEX, and marketplace. This massive leverage attracts more developers, which further enriches the ecosystem.
Evidence: The $30B+ DeFi ecosystem was built on a handful of open standards. Gaming will follow the same trajectory, with infrastructure like Ronin's zkEVM and Immutable's zkEVM competing on execution, not on locking users in.
protocol-spotlight
WHY WEB3 GAMING INFRASTRUCTURE IS A BET ON OPEN STANDARDS
Protocol Spotlight: The Open Infrastructure Stack
The next billion users will be gamers, but closed ecosystems and walled gardens will fail them. The winning stack will be permissionless and composable.
01
The Problem: Walled Garden Asset Silos
Games like Fortnite or Roblox lock digital assets within their own servers, creating zero liquidity and killing player ownership.\n- Assets are non-transferable and lose value upon game sunset.\n- Zero composability prevents asset use across experiences, stifling innovation.
0%
Portability
100%
Vendor Lock-in
02
The Solution: ERC-6551 & Dynamic NFTs
Token Bound Accounts turn every NFT into a smart contract wallet that can own assets and interact across applications.\n- Enables true asset composability—your game character can own its own items, wearables, and currency.\n- Creates persistent identity layers that survive individual game lifecycles, enabling cross-game progression.
1M+
Accounts Created
ERC-6551
Standard
03
The Problem: Centralized Game Servers & Ops
Traditional game servers are black boxes controlled by publishers, leading to downtime, censorship, and unpredictable costs.\n- Single points of failure cause global outages.\n- Opaque logic prevents community verification and modding.
~99.9%
Centralized Uptime
High
Op Risk
04
The Solution: Rollups as Dedicated Game States
Custom app-specific rollups (like Arbitrum Orbit, OP Stack, zkSync Hyperchains) provide sovereign, scalable execution layers.\n- Sub-second block times and ~$0.001 tx costs enable real-time gameplay.\n- Games control their own economics and upgrade paths while inheriting Ethereum security.
<1s
Finality
<$0.01
Avg. Tx Cost
05
The Problem: Fragmented Player Identity
Players have separate logins, friends lists, and reputations in every game. Social graphs and achievements are non-portable, reducing network effects.\n- No unified reputation system for guilds or competitive play.\n- Zero data ownership—player history is owned by the platform.
10+
Isolated IDs
0
Portable Graph
06
The Solution: ENS & Verifiable Credentials
Decentralized identity primitives like ENS for naming and EAS (Ethereum Attestation Service) for verifiable achievements create a portable player layer.\n- One human-readable name (e.g., player.eth) across all games and dApps.\n- Soulbound tokens and on-chain attestations prove skill, completion, and guild membership without a central issuer.
2M+
ENS Names
EAS
Attestation Std
counter-argument
THE PERFORMANCE TRAP
Steelman: The Case for Proprietary Chains
Proprietary chains are a rational, short-term bet on performance and control, but they cede the long-term network effects of open standards.
Proprietary chains guarantee performance isolation. A dedicated chain like Immutable zkEVM or a custom Avalanche subnet eliminates noisy neighbor problems, enabling predictable gas costs and sub-second finality for in-game actions that public L2s cannot reliably promise.
Customizability enables game-specific economics. Studios can implement bespoke fee markets, subsidize transactions, and hard-fork to patch exploits without governance delays, a level of control impossible on shared networks like Arbitrum or Optimism.
The trade-off is fragmentation. Each new chain becomes a liquidity silo, forcing users through bridges like LayerZero or Stargate and fracturing the player base, which directly contradicts the composable asset vision of projects like ERC-6551.
Evidence: Ronin's 1.3M daily active users demonstrate the model works for a single hit title, but its ecosystem of 10+ apps pales against Arbitrum's 500+, proving the long-tail network effect deficit.
takeaways
WHY OPEN STANDARDS WIN
Key Takeaways for Builders and Investors
The next wave of gaming scale will be built on composable, permissionless infrastructure, not proprietary walled gardens.
01
The Walled Garden Tax
Proprietary game engines and centralized marketplaces enforce 30%+ platform fees and restrict asset liquidity. This kills sustainable in-game economies.
- Solution: Open standards like ERC-6551 (Token Bound Accounts) and ERC-404 enable native composability.
- Result: Assets become portable financial primitives, unlocking $10B+ in trapped liquidity across ecosystems like Immutable, Ronin, and Arbitrum.
30%+
Platform Tax
$10B+
Trapped Liquidity
02
Infrastructure as a Public Good
Fragmented, game-specific backends (auth, wallets, matchmaking) force developers to rebuild the wheel, burning ~40% of dev cycles on non-core logic.
- Solution: Modular stacks like Paima Engine (sovereign rollups) and Argus (autonomous worlds engine).
- Result: Developers ship faster by plugging into battle-tested, credibly neutral infrastructure, similar to how AWS commoditized web2 server ops.
40%
Dev Cycles Saved
10x
Faster Iteration
03
The Interoperability Premium
Games that live in silos cannot capture value from the broader ecosystem. Player networks and assets are locked in, limiting growth.
- Solution: Cross-chain messaging layers (LayerZero, Axelar) and intent-based protocols (Across, UniswapX) for seamless asset flow.
- Result: Games become network effects multipliers, where a skin earned on Ronin can be used as collateral for a loan on Ethereum, creating a composability premium on asset value.
100+
Chain Reach
~500ms
Settlement Latency
04
Bet on the Protocol, Not the Game
Individual game success is unpredictable (hit-driven). The infrastructure enabling an entire genre is a more durable bet.
- Thesis: Invest in the Unity/Unreal Engine of web3 gaming, not just the next Fortnite.
- Examples: MUD (onchain game engine), Lattice (autonomous world framework), Curio (tick-based ecosystem).
- Outcome: Infrastructure captures value from the entire ecosystem's growth, not a single title's lifecycle.
1000x
Longer Lifespan
Non-Correlated
Risk Profile
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Protocols Shipped
$20M+
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