In the latest episode of editor-at-large Jon Jordan’s Blockchain Gaming World podcast, he talks to Neeraj Kashyap, the co-founder and CEO of Moonstream.
It’s a blockchain tech company that provides analytics and features which help developers understand what their players are doing and how to use this information to build and extend their games’ economies.
This conversation has been edited for clarity and length.
BlockchainGamer.biz: Hello Neeraj, can you tell us a bit about how you got into blockchain games?
Neeraj Kashyap: I’ve been involved in crypto since 2016. I’m originally a mathematician and that’s how I got into crypto in the first place. I was in grad school when the Bitcoin whitepaper came out and it made the rounds through the mathematical community and the computer science community.
At the time, I didn’t find it very interesting. I was doing pure mathematics and anything that touched a computer was of very little interest to me at the time. But at least I was familiar with the ideas. What really excited me was when Ethereum launched. That was very exciting to me compared to a decentralized ledger for transactions; actually being able to execute computations with shared state. That’s when I started taking crypto very seriously. I got involved around 2016, just running my own infrastructure, running nodes, stuff like that.
Then I gradually moved my way up the application stack to build applications and that’s how I got into web3 gaming. When you’re running a node you can make money mining or validating blocks. But there are a lot of other opportunities when you’re running your own infrastructure. The clearest way is to offer analytics. You can crawl data from your nodes and offer analytics and that’s how Moonstream started.
We had two types of customers. We had games companies and we had traders. Very early on, we realized we didn’t like serving traders. They’re very fickle, there’s very little loyalty and ultimately you’re not gonna make much money off of them. Meanwhile, games companies were great customers. Almost everyone on the team is an avid gamer so it was something we had a lot of affinity for. And that’s how we got into web3 gaming and providing infrastructure.
And Crypto Unicorns was one of your first customers?
Our first paying customer was Crypto Unicorns, and because we have a pretty close relationship with them, we saw firsthand the kind of difficulties they had in maintaining their economy. For example, the game was supposed to launch in February 2022 but it was pretty clear in December 2021 it was going to be delayed. I remember we talked on Christmas Eve and they were like ‘This is probably going to be delayed. What do we do?’
Over three days, we and them came up with the idea of running this fully on-chain game called The Dark Forest. We launched it on January 28th. It ran for two months and I think that in terms of raw transactions, it’s the most successful on-chain game ever. It did almost two million transactions on Polygon and 92% of the player base was engaged with that game.
It’s been through such events and activities that we’ve discovered the economic needs that web3 games have to serve their digital communities. And we tailored our product to fulfill those needs.
This sounds like you’re doing consulting or co-development work?
Actually, we try to avoid any kind of co-development or consulting. Analytics is the starting point. But ultimately, analytics are not really useful if you can’t act on them or you don’t get them in sufficient time. And when you’re talking about a web3 economy, a sufficient amount of time might not be very long. You might have to act on the analytics very quickly.
I guess a good analogy is a complex machine, like a Rube Goldberg-style steam-based contraption where you want to keep the system in equilibrium or you want to keep it growing at some reasonable rate, but at any given point in time, because there’s no central control on how players in the economy are acting, different parts of the machine can go out of whack. Maybe too much pressure can build up over here, or you might be losing too much pressure in another location.
How do you keep these different pressures in balance? It means you need pressure valves and control mechanisms. Those are the things that we build. We build mechanisms that anybody can deploy into their economy to add deflation for a period of time on a certain token, or rate limit the distribution of a token so you can control the inflation rate. We make these as decentralized as possible. We have a library of mechanisms available and then the people who use those mechanisms can put them together – whatever makes sense in their game universe and run them inside their communities.
Or you can think about the traditional world of finance. Blockchains decentralized the payment layer, things like Visa and MasterCard. But there’s a layer on top of that, the central banks, the Federal Reserve. This hasn’t been decentralized yet and that’s what we’re going after.
Digital communities are now able to take control of their own economies. Communities themselves have to start thinking about these problems. Economists and bankers have their own set of tools and protocols that they use to enact their will on their economies. For digital communities that operate on blockchains, these tools don’t exist. And those are the tools that we’re building. So our policy is we build smart contracts, we build APIs and make them easy for the web3 communities and games to use, but our involvement doesn’t go beyond that. We don’t want to advise them on what to do. It’s really just about offering them the tools that help them manage their economies.
What sort of features do developers build with these tools?
I’ll give you an example of what a mechanism looks like using Crypto Unicorns again as an example. So when the game launched, it had two tokens in its economy but there was no sink for the utility token apart from breeding new unicorns. The game started with 10,000 unicorns and they expected in the first month they would double the population. But a couple of days in, less than 100 had been bred,so they were understandably worried.
And this is where our platform comes in. We collect live analytics so we have pretty up-to-date data on what players are doing. Then you can say, ‘These on-chain events should be worth this many points’. You can make a mapping of on-chain events and how many points they should be worth on a leaderboard. This creates a live leaderboard for your players. Then you associate on-chain rewards with each of the leaderboard positions
You can do something like breeding a unicorn is worth 100 points, and breeding a rare unicorn is worth an additional 50 points. Crypto Unicorns decided to run this leaderboard for one month and whoever had the highest score on the leaderboard got some amazing rewards.
The game designers did a great job balancing the rewards so the players wanted to compete. When the event was active, the unicorn population increased 100% per month but when it wasn’t active, it was only up 20% so we know it worked. You can host these sorts of events with an API call and a smart contract deployment from Moonstream. It’s basically a switch.
What’s your view on the quality of blockchain game economies?
Five years from now, we’ll probably look back and think that there’s a lot of naivety because it’s such a new space. We don’t really know how to build decentralized games. We don’t have much experience building such games and building such game worlds, so we’re learning a lot collectively. There are projects that put a lot of work into their economies that give themselves enough control that they can make sure that the economies don’t crash. And even then, sometimes it feels to me like a toss-up whether it’s going to crash or not.
Our philosophy has always been, we try to stay away from your tokenomics and modeling simulation because … there’s that quote – No plan survives first contact with the enemy. I think the same thing is true of game design and tokenomics modeling. It’s more important to have good operational tools that will help you influence your economy once it goes live than to have a very comprehensive model for your economy before it goes live.
What do you think about current market conditions?
Money is definitely drying up. Projects are watching their runways, projects are watching their spend. It’s a pretty tough time in crypto in general. It’s a pretty tough market. I was around for the last bear market and this one feels a lot worse.
What are the opportunities for blockchain game developers?
I think most people think about blockchain games in a very old fashioned way, old fashioned for crypto, like a 2020 way or a 2017 way. A lot of people building blockchain games are thinking, ‘Here’s my tokens. Here’s my game world. I’m going to do this big launch and I’m going to make millions of dollars’. Well, in this market, you’re not going to make millions of dollars. Good luck doing a token sale because the SEC is breathing down your neck.
But there are a lot of communities out there where there are people who hold tokens who are pretty engaged, where they would appreciate a casual game that they could play. They would appreciate just some gaming utility for the assets they already hold.
I’m kind of surprised we aren’t seeing more of that. If somebody has an NFT collection, even if they’re not a gaming studio, they can still deploy on-chain games that provide some value and some engagement for their user base. We’re quite open to working with projects like that. And I’m curious why we’re not seeing more game developers go after existing assets. Like why not create the game for Bored Ape holders instead of starting a project from scratch? That’s something I think we will see more of but I’m surprised that we haven’t seen more of it already.
But then you have the issue of getting someone to sign into an unknown game with their wallet holding all their expensive NFTs?
Yes. There are a lot of problems to solve like how do you make all of the collections work in a single game? There are a lot of problems to solve. But I really think that’s the future. The hardest thing is how do you build your user base?
For game developers, it’s even harder because you’re competing with so many other people for the attention of players. But one of the great things about web3 is there’s no moat. Nobody has a moat around their players anymore. Literally that information is public. I know this because some of our customers use that information to attract players into their game worlds. It’s a big deal. I just don’t understand why more people are not making use of it. I’m genuinely curious, actually. And I expect that to change over the next year or so.
What’s next for Moonstream?
We’re working on the next version of our product. So far, the way people use our products is from the command line or by making API calls and stuff. It’s extremely technical and inaccessible to most people. And the people who end up using us, our most valuable users are game designers so we’re working on building a nice front end and that’ll go live in the next month.
And then besides that, we’re looking very closely at the Ordinals ecosystem. Bitcoin is a very exciting blockchain for us, and Ordinals is exciting for us because it brings the possibility of games to Bitcoin. We’re launching this project called Ethereal NFTs which is a way to create ERC721 tokens on any EVM chain that mirror a digital asset somewhere else. As long as there’s some sort of authority like blockchain ownership that can certify a given person holds a digital asset that person can mirror that asset on an EVM chain, on Polygon or any L2s, L3s and open them up for game utility.
One of the problems it solves is the one that you mentioned, where you have a wallet that has a bunch of high value assets. You don’t want to be signing a bunch of transactions with that account just to play a game. But with Ethereal, what you’ll be able to do is you’ll be able to create like a short-lived mirror of a Bored Ape, play games with that mirror, and then once it’s done, put it in a burner account and forget about it.
So that’s something that we’re gonna be launching in July. The first project that’ll be using it is called MetaBoy.