MSquared’s Rob Whitehead explains how faster blockchains and more onchain data supercharge web3 gaming

In the latest episode of the Blockchain Gaming World podcast, editor-in-chief Jon Jordan talks to MSquared’s CEO Rob Whitehead about how it’s working to provide the networking technology that will bring DeFi-style composability to web3 gaming for the first time.

He also talks about why putting more data onchain using fast blockchains such as Somnia unlocks new experiences for players and developers. Examples include MSquared’s own fully onchain Minecraft-style game Chunked.

BlockchainGamer.biz: Can you give us some background?

Rob Whitehead: I’m Rob. I’m co-founder of Improbable, which is a virtual world technology company that’s been around for about 13 years. These days I’m also serving as CEO of MSquared, which is our subsidiary specifically focusing on metaversal platform technology and essentially building the underlying plumbing that’s going to tie the next generation of virtual worlds together.

How did you get into games?

I’ve always been a massive virtual world enthusiast. I joined Second Life when I was 14 years old and made some money being a virtual arms dealer. Maybe it’s a story for another time. But I was there when Second Life really popped off in the mid-2000s and suffered from its own success. There were some technology limits at the time so they weren’t able to really scale in terms of getting people in the same parts of the world for big experiences. It really got me thinking through college about what a new version of the technology might be like. 

Then I met Herman (Nerula) and to the bewilderment of my family moved into his house when I graduated and the rest is history. We ended up building out a type of simulation engine, which we used for a bunch of different things, ranging from building game worlds and virtual worlds, but also it had applicability for things like real world simulation and all sorts of other applications.

Then, around the Covid lockdown, we had a new breakthrough technology called Morpheu. We’d worked on building these massive game worlds but we’d never been able to solve density, which is bringing everybody into the same space at the same time. We thought it was pretty timely during lockdown – the one time that we can’t gather as human beings – trying to build a digital version of that felt really relevant. 

It was fantastic to see what we were able to do with that. We could have 10 or 20,000 people all able to see each other, interact with each other. But then we were thinking to ourselves, what can we do with this? Do we try to sell it to game studios, maybe make the world’s largest battlefield game? But there’s probably more interesting things you can do with people gathering. If you think about the real world, why do we gather? There’s conferences, concerts, rallies, all these different use cases which are a little bit more social. 

This was when the metaverse terminology was really hyping up in 2021 and 2022. Based upon that, we were able to do a fundraising round for what became MSquared, which is the underlying technology, and that’s now been spun out into its own thing.

Can you explain how MSquared is different to the tech used for battle royale games that have a limit of 100 or 150 players?

Typically when you’re playing a game like Fortnite or PUBG, you’re downloading a client that is a game engine, something like Unreal Engine, and then you’re connecting to a single instance of a Unreal Engine, which is also running in the cloud. It’s running in the cloud without any graphics, but it’s running the logic of the world. That’s typically how most game worlds are built. 

If you’re doing something that’s high fidelity, you can get maybe 100 people, 150 people in one session. You see that number batted around for PUBG, Fortnite, Call of Duty. It’s a funny thing because these are completely different companies, completely different technologies. Why is it that number? A mathematical rule that kicks in, which is when you double the amount of people in the space, you quadruple the amount of data you need to send. So you start to hit these fundamental limits pretty fast. 

One of the insights we had was trying to build servers which don’t just use one computer in the cloud, but actually use a cluster, which all cooperate together to simulate and network something much bigger than any single one could deal with. 

One of the key things we were able to leverage to build these superscale virtual spaces we;re putting together is using existing cloud hardware, computers that run in the cloud, and building a magic layer on top that stitches them all together to build these really large living spaces. And then building development tools so that if you’re a developer who knows how to use Unreal Engine or Unity, you can plug in these new engine technologies, we have to make this be possible. 

There’s also another angle, which is the economic layer and this is where I think blockchain technology is getting increasingly interesting. If you were to make something like Second Life today, you’d probably use web3. It’s got a lot of solutions around allowing user generated economies, sharing value, buying and selling things – all that stuff is super baked in. 

How do you end up working with Yuga Labs, which is using MSquared for its Otherside ecosystem?

The original vision around MSquared was building our own metaverse. We thought we’ve got this really powerful technology, so why don’t we have our own play here? But we very quickly realized there’s a much better story to tell, which is rather than trying to be yet another token-backed metaverse around, there’s an opportunity to build the underlying infrastructure that would tie all these different virtual worlds together.

Then, people’s characters, inventories and data can freely move between these different experiences. To me, this is what differentiates virtual worlds and the metaverse from gaming. It’s this idea of things connecting together and being greater than the sum of the parts. Once we met with Yuga Labs and saw the vision for what they wanted to do, we realized this is a much better story for us to tell. It’s going to be better for the whole ecosystem if we do this.

Can you explain more about what MSquared does?

You can think of it like Amazon Web Services for virtual worlds. We’re trying to build the underlying technology layer that’s going to allow virtual worlds to connect together. That means when you go from one world to another world, you can still see your inventory and you can still use your character. Another reason is when you’re playing a game, you can get thousands of people in one space. These are the technologies we’re backing. 

We love this approach because of the sheer diversity of experiences that people have now built on top of the tech. So there’s Otherside. Then there’s Major League Baseball building a full baseball stadium experience that derives from their user base. There’s also projects like Jitter, which are dealing with taking Twitch streaming to a more immersive level where you can click a button in Twitch and then jump straight into a Twitch stream, an immersive experience running around with your host. You couldn’t have one consumer product be all those different things, but they share the same technology challenges. 

Some of the challenges are how do we get thousands of people in one spot and you can see them all and hear them all? How do we make sure objects can go between different spaces, but they’re moderated and safe to go into those places and we’ve checked that they’re decent. Even things like avatar standards so there’s a common avatar players can use within your project if they don’t have one. 

You get a lot of this interoperability for free just using a blockchain, so how’s MSquared different?

It’s a good point. Blockchain definitely is in the food chain. It’s the very bottom of it. In terms of the portability of data, sovereignty, ownership, what’s happened in the world, you can put that stuff on the blockchain and that makes it extensible. It’s something that people can read into. It’s auditable. 

But a lot of what makes a virtual world can’t be put on a blockchain. For example, I’ve got like a 10 megabyte 3D avatar, which is a piece of data. I can’t jam it into the blockchain, but you still need to be able to talk about it. This is where we have our layers where we’re indexing all these different assets and putting on chain the data to say, this asset contains adult content or this asset is suitable for environments with kids. We’re trying to fill the missing gaps where the blockchain ends, as well as the rest of the problems that need to be solved on top, which aren’t necessarily onchain, but they connect to the blockchain.

Where are we currently going wrong in terms of using blockchain?

There’s a whole movement around what if you tried to maximally put everything on a blockchain. There’s the autonomous worlds movement and lots of projects based on that. We’ve been looking at that as well, but the main issue typically has just been that blockchains don’t have the performance capability to do it. 

You end up with these extremely anemic experiences where the game is very, very minimal. It’s essentially just a trading game with extra steps. But what we’re seeing with projects like Somnia is you’ve now got this performance envelope where you can put things as fully onchain games that you typically wouldn’t have been able to do before. 

Okay, tell us more about Somnia.

We’re the fastest EVM blockchain on the planet. It’s not a fake blockchain. It’s genuinely an L1 blockchain. So, I was talking about this technology that lets us have tens of thousands of people in the same space, one of the ways we achieve this is through compression. That’s taking the data, crunching it down and really optimizing how these different systems are synchronizing with each other. You can take that same skillset and apply it to blockchains and then you get something like Somnia where its bleeding edge performance requires super low level optimizations to make it possible.

When did you get into Bitcoin?

I first heard about Bitcoin when I was in college and someone was walking home from lectures saying ‘Have you heard about this thing called Bitcoin?’ That was when it was worth $0.1 or something insane. I just thought, ‘This weird nerd money, what is this thing? It makes absolutely no sense. It’ll never catch on’. 

And honestly, that’s been a deeply humbling reflection in retrospect. I say this to a lot of people now, any new idea is stupid until it’s not.

 Again people talked about AI. I remember leaving lectures and people saying “Neural networks don’t work. They reach a certain point and then they just cap out’. That was literally the material we were trained on. It’s stupid until it’s not. And then suddenly you have this breakthrough capability. 

I think the same thing happened with cryptocurrency. People thought it was a bit of a silly thing and then suddenly it’s not. Things iterate and things change and the early versions of things always are stupid because they need to evolve and they need to adapt and they need to get better. 

So crypto was something we saw from the sidelines during Improbable’s history. We saw it slowly growing, but it was around the intersection of DeFi and when the metaverse hype started, there was this idea of putting virtual worlds on the blockchain. That’s when we were ‘We can’t not get involved in this’. 

A lot of the things we bring to bear are really powerful tools. A lot of the vision around things like interoperability, we were thinking ‘This is the foundational system to be building upon to make these sorts of things possible’.

How do you balance appealing to crypto degens with the focus on Somnia’s utility to solve hard problems?

The challenge is that often there’s not really anything that differentiates a blockchain besides the branding and the community. It’s like selling bottled water. At the end of the day, they’re just another EVM L2 or a subnet of some other chain. What makes a difference is because Somnia’s got this multiple order of magnitude performance capability, with a million transactions per second, it’s enabling a whole new category of experiences to be built. 

Blockchains typically have NFTs on them. I own a hat and that’s now represented as something onchain. How about my metagame and progression? How about how many headshots I’ve done? How about my profile? How about my stats? How about my interactions with other people? These are things that’d be really interesting if they were on the blockchain, because we could build all sorts of tools to analyze them and view them. You could speculate on them. You could build prediction markets on top. But no blockchain can do that. 

But it’s not just the metadata, not just your progression. The game itself can be on the blockchain. In our Minecraft experience – Chunked – you’re running around placing blocks. That entire thing is a verifiable piece of computation. You can financialize it and you can add real money economies and all sorts of really interesting things on top of it. 

For us, blockchains need to bring more to bear than just a different level of branding and hype. It needs to be something where there is a new capability. And with Somnia, it’s not just about being yet another place to mint NFTs. It’s about there being a scope for a whole new class of computation, to be able to work together.

What can you do with the tech?

Just because you invented a chess board doesn’t mean you know how to play chess. Once you unlock a new capability, there’s a new level of learning to be built on top of that. So we had our breakthrough tech – the dream that we wanted 10,000 people in the same virtual space. But what do you do with it? Give them all guns? It doesn’t pan out very well. We’ve conducted some experiential R&D where we brought in groups of testers to try different formats, doing surveys to work out what types of mechanic resonated with large crowds etc. That was a whole other journey. Maybe it’s a good time to talk about Chunked and what we’re building there.

So we asked ourselves ‘What’s the maximal thing you could ever put on a blockchain that people wouldn’t think was possible?’

We thought of a full action immersive experience with loads of data, a Minecraft-like, voxel world, where you’re running around. You’re crafting things. You’re digging stuff up. You’ve got durability of items and you’re seeing other people around you. What if we made all of that on the blockchain, where it’s all a big verifiable computation, no rollups, no levels on top. Just the actual raw underlying blockchain?

That was something we were able to put together pretty fast. Again, it was learning about how to use this new capability. To build such experiences is itself an art and we’ve built a bunch of technology to be able to interact with it. Some stuff we found, when a wallet like Metamask interacts with the blockchain, they typically wait a couple of seconds to wait for the response to come back because blockchains are normally so slow that’s a very normal amount of time to wait. But when you’re sending 30 transactions a second to move around in a voxel world, that thing becomes the actual dominating factor.

So although Somnia has the raw performance, we had to build the layers of technology back on top again. We had to build our own RPC nodes to handle that sort of scale. We had to build libraries for JavaScript so we could send that amount of transactions and receive that amount of data. But it’s been really, really interesting. There’s literally no server. When you see someone looking up and down, that’s onchain data.

Chunked was pretty popular too, I think?

We did a marketing activation with Somnia bringing their community into Chunked and it turns out people love mining. There were tens of millions of blocks mined with around a thousand concurrent users peak in terms of running around mining stuff, which was impressive. We talked about Fortnite having a hundred people. This was close to a thousand people running on a fully onchain world. We ended up having to turn the whole thing off because essentially it was just like complete anarchy. We’re working on our next iteration now with slightly more checks and balances so people don’t strip mine the entire thing.

A fully onchain Minecraft is a good marketing tag.

Yes. Fully onchain Minecraft is a vignette. It’s a really easy way of explaining what it is. And it’s cool. It means all my inventory is extensible and ownable. It means every single block is verifiably mine. You can’t bot it and invent things out of thin air. But you can build different clients for it. We made a simple web client but you could build an Unreal photorealistic version. You could build a stats app. You could build marketplaces. You could build prediction markets.

We found it to be a really good calling card for what’s possible in that kind of superlative way. I think it gets people thinking maybe you don’t want to do fully onchain Minecraft, but if you can do fully onchain Minecraft, what else can you do? It’s proving that watermark of capability that I want to put all the data onchain so I can do different things based upon that. 

How does this drive the next phase of blockchain gaming?

At the moment when game developers think web3, the only thing they know to do is sellotape NFTs onto the side and those NFTs aren’t interoperable. They don’t have utility beyond the application. Essentially NFTs are just a way of monetizing the experience. The other side is you have the pure web3 crowd building fully onchain experiences, but they’re not game devs, so these things aren’t necessarily fun. And they don’t have really good onramps. Getting people to buy this random token to play this game, you’ve already whittled down your audience to like 1% of the possible people who could go and play it. 

There is this middle ground we’re trying to encourage where we’ve got the experience in web3, and we’ve got a decade of experience in building online games and blending those things together so we can bring to bear our game technology and game development knowledge. And then we can also bring to bear our web3 knowledge and make things that are a lot more compositional as they should be in web3. 

The best example is DeFi. DeFi is one of the big success stories of web3. I make an exchange. You make a wallet. Someone else makes a marketplace. Someone else makes a lending protocol. And like Lego pieces, they connect together and without even having to cooperate, we’re building this whole ecosystem. 

In web3 gaming, where’s that composition? Where’s that ecosystem happening? Who’s building the Lego blocks that are gonna be sticking together? This requires you to approach things a bit differently. You want to have it so the items have common standards. You want to have it so that there’s common world technologies so items can be loaded into different places. That’s what we’re trying to go after. Actually building something more like what DeFi did for money. We’re trying to do that for gaming, so it’s actually having more of these compositional pieces.

Putting everything onchain also makes things simpler for developers.

The most difficult parts of web3 are when you’re going between web2 and web3 because you no longer have the decentralized system and you’re having to have random computers on the internet interacting with it. 

For us, step one is having onchain economies. That’s something people are familiar with and there’s good solutions for it. The layer on top of that is onchain metagame, so it’s your character, your progression, your achievements, your profile, all those consequential things sit on top. There’s products out there like PlayFab, which are commonly used by indie devs and even larger devs to build out the metagame. 

One of the things MSquared is working on is what we call web3 PlayFab. The API is just as easy as PlayFab. The word wallet isn’t in it. The word token isn’t in it. You’re just saying, this person has this in their inventory and we’re handling them getting an onchain profile. We’re handling minting NFTs. We’re handling all that stuff for you completely transparently. 

Then once you’ve got the metagame onchain, the final step is actually having the entire game be onchain, you know, including character movements. There are games which are lower fidelity, where that’s 100% possible. Then with things like Chunked, we’re constantly pushing the boundaries of what is possible. RTS-like experiences, you could have that sort of thing happening. The update rate of EVE Online is only one update a second. The update rate of Somnia is 10 times a second, so even there, there are MMO-like experiences you could start to build fully onchain.

Onboarding to blockchain games is now pretty good but that hasn’t really solved anything.

Currently we have hyper-fragmentation. When you’re logging in with your Google account to a web3 game, it’s generating a wallet on your behalf for that particular application, but there’s not really any mechanism to link it with all the other experiences you’ve done. With MSquared, we’ve focused a lot on the protocols that tie these different things together. Imagine you’ve got one wallet for Otherside. And you’ve got one wallet for Shrapnel. And you got one wallet for another experience that you’re building. 

We need a mechanism where you can link those different accounts together and go to the equivalent of a decentralized Steam page. You can see your cross-world profile and you can see your achievement progression across those different games. Also, onchain, we can link those different accounts together so that if you have a really cool cosmetic in Otherside, you can use that cosmetic in another experience.

That’s the big vision. It’s a good example of how we’re trying to be the connective layer so that when you’ve onboarded someone seamlessly onto a single experience, you’ve also onboarding them to this open metaverse layer? Beyond that.

MSquared is a web2 technology, which works really well with Somnia but how does it work with other blockchains?

One of the products we have is an OmniChain Indexer, which, wherever we need to. We also reflect some stuff that’s often not respected in a lot of apps such as delegation. If you own an NFT that might be worth $50,000, you don’t want to have it in your hot wallet, right? You normally have it in a cold storage. And there are protocols where you can point the NFT at another wallet, so we handle all that with our indexer as well. 

In this way, you can have a multi-wallet identity and bring that inventory between. Our system doesn’t care whether it’s on Somnia, whether it’s on ApeChain or whether it’s on Polygon, It’s just another asset you have.

What’s coming next?

There’s a few interesting things on the horizon. Obviously, there’s Otherside. We’re continuing to help them. I’m really excited to see where that project is going. It increasingly has a clearer vision for what it is as an experience. 

On the MSquared side, we’re currently bringing the MSquared’s full capability to mobile so you can have tens of thousands of people running around with native mobile apps, which is a really big lift, especially following the new Epic vs Apple ruling, in terms of allowing different forms of payments. It’s a really interesting time to be doing that. 

In terms of our underlying technology layers, we’re going to be leaning a lot more into our protocols over the rest of the year, talking more about our asset network and starting that out, so you have a database of assets you can view and you can use between different experiences. We have our avatars going live including a default avatar, which teams can adopt easily and use within this network of places. 

We’re also continuing to work through some technologies to broaden what people can do. Even social media apps are getting more immersive. They want to have avatars or lightweight 3D features and we want to be the underlying pieces that people can just pick up and use. Whether you’re a game company trying to become more interoperable and become more connected, or if you’re a social app trying to get more immersive, there are different ways of thinking about it. Or a web3 application trying to get more game-like and more immersive than just being some trading system. We’re trying to sell all the different pieces that tie all that together.

And everyone needs to keep a look out for Chunked v2?

People would be very upset with me if there’s not going to be a Chunked v2, so we’re hard at work working on that. We’ve done a lot of optimizations, trying to build a mechanic so people don’t strip mine the entire world. But that’s definitely going to be something that goes live. We’re thinking about building it as a full commercial project for Somnia’s mainnet as well.

Check out when the next version of Chunked goes live via its website and Somnia’s X.