In the latest episode of his Blockchain Gaming World podcast, editor-in-chief Jon Jordan talks to Hytopia co-founder ArkDev about the Minecraft-inspired UGC platform that’s about to enter closed beta in April.
Notably they discuss the origins of the project as Polygon-based NFT Worlds in 2021, the impact of Microsoft banning blockchain in Minecraft and the resulting pivot to Hytopia and its own gaming infrastructure Hychain.
This interview has been edited for length and clarity.
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BlockchainGamer.biz: Can you give us some background?
ArkDev: Going all the way back, we started originally as a product called NFT Worlds in October 2021. I’ve come personally from a background of doing startups for the last 10, 12 years in the traditional startup space, across games, ecommerce, all those sorts of things. I’ve been involved in crypto since 2014 with Bitcoin and tracked Ethereum since 2017, all that stuff. But yeah, first project.
That’s a long history in crypto. You’ve drunk deep from the well.
Yeah, I have. Been keeping my eyes on this space for a while. We started NFT Worlds in October 2021. It was near the tail end of the first NFT cycle. I was just dabbling around curious, what happens if we use blockchain and NFTs to allow people to put Minecraft worlds onchain that they could edit and share and buy and sell things that are then pegged to the visual image? It really quickly evolved. That was just the initial idea, this little art project that people can have fun with and maybe we can do some other things. But we had a situation where lots of real Minecraft builders started buying these things and doing real projects and people were buying these out of interest.
I had a decent amount of background in the Minecraft space and knew some of the pain points. So I thought maybe we can expand this a little bit more. What if we solve one of the biggest problems in the Minecraft space for creators, which is they don’t really have good opportunities to monetize because of the restrictions of the Minecraft EULA.
We thought we could use a single token and make it a way to exchange value between all the different servers players play on. Then it would be a way for creators to take payment for in-game items and then eventually go to a DEX and have an alternative way to monetize that was outside of the scope of the EULA. So we did that.
We launched these systems to make it frictionless for players to come into these servers that supported this feature. They didn’t have to deal with their own wallets. They just created an NFT Worlds account that gets signed in to all these servers. Operating on Polygon, I think we facilitated 1.5 million in-game transactions using this token. So there’s a lot of value flowing through a lot of servers, a lot of creators using it. At our peak before the ban hammer hit, we were around 100,000 weekly active players I remember correctly.
We launched these features in April 2022. Three months later in July 2022, Minecraft came out with this EULA update and said, No more servers can use blockchain. If they do, we’re going to just completely ban them where players can’t play on them anymore. That ended our hockey stick trajectory.
How surprised were you to get this strong adoption, and was it mainly from crypto people or Minecraft people?
On the adoption side, I didn’t expect it initially to become what it did because I knew for an ecosystem like that, it’s a chicken and the egg problem. You need a large scale of Minecraft creators and servers that have players and you need players that are open to a new system that is unfamiliar. And it can’t feel crypto-y otherwise they’re like ‘What the hell is this I don’t want it’.
Thankfully, in solving the initial pain point we had one or two creators on board. And it was frictionless for players. They were creating an account on a different service and then this token just showed up in a web UI. It looked like a game currency. They didn’t know it was onchain. If they wanted to look, they could see, but for the creators though, it became the spiral effect where it was like ‘This is working and it’s really easy to add. And it’s allowing me to now monetize my content in a way that I really couldn’t before. And it’s even easier because in game, I can just do a slash command as a player to buy something and it automatically deducts the balance and they don’t have to go to websites and all this stuff’.
Once that happened, just a myriad more creators were like, ‘I want to use this, I want to use this, I want to use this’.
But it was this success that killed the project.
Yes unfortunately. I am very confident that the traction we’re seeing and how creators were using it got seen by Minecraft, Microsoft. They were ‘No, we don’t want this’. But there is a second part to the story. We had actually been in touch with their policy enforcement team for months prior to this. And they’re like ‘Oh, what are you doing? Like, this is interesting’.
But three months before the ban, they just completely stopped communication with us. We weren’t even privately informed that this was going to happen. It was just ‘You’re getting banned’. They never responded to us even when we tried to message them again.
Were you technically breaking the Minecraft EULA?
No, at the time we weren’t. It was within the realms of the language of the EULA; it was a gray, acceptable area. But the unfortunate thing with building on top of a platform you don’t control is they can make real changes at any time and you can get deplatformed and your business is dead overnight. Right?
But that was probably the best thing that happened to you in the long term?
Yeah, for sure. Being where we are now, like a year and a half-ish later, and all the progress we’ve made on what we’re doing, the net long -term benefit is much more than if we had just stuck to Minecraft.
Did you think about shutting down or were you always going to just rebuild?
I don’t think we were going to shut this thing down. The reason being is we had built companies in the past. Having an active customer and user base is usually one of the biggest indicators of a long-term trajectory. My thinking was ‘We have such a strong community. We have the cash reserves. We have a team that’s capable and knowledgeable and experienced’.
I thought we could still execute on something as long as we could retain the community to stick with us for the vision. So it was more like ‘How do we rally the troops and set a narrative around what we think we can do at this point, what we intend to do?
Was it a straightforward process?
It wasn’t necessarily the most straightforward thing. Building a game engine from scratch is not easy. And our team wasn’t structured with that intention. We effectively had to take months to find the right people with the knowledge base of building on top of graphics APIs and building game engines and physics while also understanding how does Minecraft feel as a game? What’s the nostalgic nature of it? We wanted to re-implement, to feel familiar to players, so it’s not a jarring change when they come over. So it was not easy. It took a few iterations of finding the right people, but I think we’re in a good spot.
At what stage is Hytopia currently?
We’ve been in a closed alpha iteration phase for the last couple of months. We’ll have a closed beta, which will be thousands of people from our community in April. We’ll do the open beta once we’ve done enough QA iterations from having a large amount of players on the closed beta and we’re confident this thing isn’t crashing once we have 10,000 players. From there it’s product iteration – marketplace, cosmetics, chat systems, social systems, game content updates, creator tooling updates etc.
You’ve had one million pre-registrations right?
Unique player registration is about 1.2 million on the website but if you look at the Google traffic for unique geo-distributed IPs, it’s about 700,000. I think it’s a fairly substantial number. It’s in the hundreds of thousands of players that are waiting to play, at least.
How much blockchain will you have in the open beta?
When the open beta comes out, we do want to ship an initial iteration of the marketplace relatively early. I think we could see that as early as June, July. So the ERC20 token will be used to buy content in the marketplace, things like that. There will also be dual support for USDC so we can have the stable pricing of items.
How accessible will Hytopia be for crypto-newbies?
This is something we really focused on even back in the NFT World’s days when we had Minecraft players who don’t touch crypto. They needed to feel it’s a regular game sign-up. Same thing here. So with Hytopia, the registration flow, you can sign up with a social account, sign up with email. The systems that we’ve built, which tie into Hychain are fully self-custodied so players own their private keys. Their accounts are onchain smart contract account wallets on Hychain. It’s basically as simple as I’m going to play Hytopia. I log in. I approve Hytopia is a game for what will be a system called Hyplay. Any interactions I do in game, I don’t even know there’s transactions associated. I don’t even need to know there’s blockchain. It’s just fast.
Was it always the goal you were going to launch your own infrastructure?
It wasn’t always the goal but it became a necessity back as far as NFT Worlds when we were doing all those transactions on Polygon. Part of the issue was that to make it frictionless for players, we were covering all the transaction fees. The issue was we would have days where either Polygon would see shared network spikes, or where there’d be so many transactions from players and we’d be covering so much cost upfront. It became clear that for both scalability and cost, we really should have our own chain. This was before the Minecraft ban.
And it’s since become more of a mainstream thing. We can’t hit the 10 million plus active player scale, 100 million plus, the best case active player scale that we want to and make it work with all our onchain systems unless we have a chain that can scale with us
What’s it been like hiring and running a team?
It’s not difficult to find people who can just build and slap a product together. It is difficult to find people who can build and maintain a world-class product for the long-term that needs to be maintainable and scalable and all these different things. But it’s been doable. We’ve gone through a few iterations but I’m pretty confident in the team we have now. We are distributed all over the world. We have team members on the game engine team that are in the US, West coast, East coast, people in Australia.
How many people is that?
Hytopia is probably a team of nine or 10. For Hychian it’s about seven of us, but I’ve always built my companies lean. I’ve never built a startup that’s gotten to like the hundred million dollar plus scale, but I have built startups of seven, eight figures.
Oftentimes I found in the earliest days, small teams that are really potent and talented and can be self-sufficient, move way faster than big team. It takes the right type of person. Everyone on the team is very self-starter and self-motivated. We don’t need to do meetings. It’s ‘unblock everyone as fast as you can’ type of culture.
Do you think blockchain has been a positive element?
The blockchain element definitely makes it complicated on the hiring front. There are game engine developers who are just like ‘I don’t want to touch crypto’. Ironically, I found it’s the younger developer that seems to be like that. When we’ve talked to the more mature, like 20-plus-year game veterans, they’re like, ‘This is fine. We’ve seen so many iterations of technologies in the game industry’. Most of them don’t seem to care. The older generation is more experienced and more mature. Some of the leads on the technical side of our team are 40 plus years old and they are in that boat where it’s this is just another iteration cycle.
From the community side, the blockchain elements have been really helpful. I think this is one of the challenges in game adoption is that if you don’t get the earlydays super fan base that’s really excited about your game and are effectively your organic marketing, it’s hard to get the distribution.
Why do you want to offer Hychain for other developers to use?
We feel strongly we have insights that could be valuable to the greater community. We genuinely believe the blockchain is a solution to problems like black markets for game trading but it won’t happen unless the adoption happens. So we’re in a place where we should really try and make this happen because we think it can and we’ve seen the benefits.
And current market conditions are good too.
Yes but we’re in it for the long game. One market cycle, it’s cool, but at the end of the day, we really want to build one of the biggest web3 infrastructure platforms and web3-based games in the world.
Find out more about Hytopia via its website.
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