In the latest episode of the Blockchain Gaming World podcast, editor-in-chief Jon Jordan talks to NPC Labs’ CEO Daryl Xu about B3, the Coinbase spin-out, which has just successfully launched its B3 token as it looks to build out an ecosystem of game chains with the likes of Parallel and InfiniGods to grow the overall pie of blockchain gaming, not fight over market share.
BlockchainGamerbiz: So, it’s been a very busy week for you. Thanks for finding the time.
Daryl Xu: We went live with the B3 token two days ago. So yeah, hot off the press. I’ve lost track of days. I don’t know what day it is. I don’t think the team knows. I don’t think the team has slept half the week, but we are rocking and rolling. We’ve been working on the launch for months and to see it finally come to life and come to the market and be well received is a testament to the team’s hard work and also the vision that we have for the ecosystem.
If we take a step back, B3 isn’t just an application. It’s not just one chain. We’re building this ecosystem of chains where folks like InfiniGods and Parallel and others that we’ll be announcing shortly can join, build their own game chain, and build this ecosystem of onchain gaming publishers.
But the first step and the first big milestone in that journey is launching the currency of this ecosystem. And so a shout-out to the team and also a shout-out to all of the partners, including the Player1 Foundation, which is the foundation behind the B3 token who we worked with closely to make this launch a success
What’s the genesis story for B3?
We launched mainnet in August 2024. We’re a layer three on Base. Just a bit of context for your audience. I’ve been in crypto since 2015 and have had the fortunate opportunity to work on a ton of amazing things. The one that’s most relevant to what we’re building today is Base. A lot of our team is ex-Coinbase and ex-Base including myself and one of my co-founders and the head of our foundation. We were on the original team that brought Base to market. I was looking after gaming and infrastructure specifically.
It was at that point where Base really started to take off and gain mindshare liquidity. We had these very talented game builders like Parallel, for example and say that they wanted to deploy more titles such as Colony on Base. But when we scoped it out, we quickly found two issues. Number one. Because Base is so popular, transactions are freaking expensive. I know the Base team is working hard on it, but when you have to share block space with high value DeFi transactions, it’s really hard for a gaming studio when they want to make the transactions as cheap as possible. So there’s a misalignment of incentives there. The challenge was Base as a blockchain wasn’t really configured for gaming specifically and was too expensive.
The second is that bringing a game to market is one of the most challenging things you can probably do from like a consumer product launch perspective. You have high production budgets and then the liveops you have to run post-launch. Games come to the ecosystem needing that kind of support. At the time, Base wasn’t necessarily positioned to provide what I call publisher support. It’s an ecosystem for everyone.
So when I found those challenges and talked to game builders such as Parallel, my co-founder and I put our heads together and said, ‘This is a new framework that’s evolving. If we build a layer three on top of Base, we’ll inherit a ton of cost benefits. A ton of throughput benefits. If we are able to launch them in layer three ecosystem, we can brand it and build it as gaming-first. So not only do we have the technology and the chain, we’ll be building this publisher ecosystem where we’ll have financial support at the ready, marketing support at the ready. We’ll have our own native distribution as well’.
That’s the complete origin story that started a year ago. Then we had a conversation with the Coinbase team. We said ‘We really want to build this and scale gaming on Base’. We did that almost a year ago to this day. Then we raised capital along the way with amazing partners like Pantera, Makers, Hashed and Coinbase Ventures and many others.
In August 2024, we launched the mainnet. So we’re definitely young and we’re early, but we also think that’s an opportunity for the ecosystem to join us because it’s still day one.
How do you grow the pie not just fight over market share?
Our vision, our northstar is to onboard half the world because half the world plays games, some sort of games. My mom plays casual games, right? My little nephew used to play Roblox and now he’s playing Genshin Impact.
We want to bring these folks onchain because we think onchain delivers a better experience. One way to do that is to provide better titles, better games. I’m actually very bullish on this in terms of the talent density. I see it growing year-on-year. I’ve been in crypto since 2015. Last cycle, we had a ton of amazing experiments. I’ve always been a fan of Axie Infinity, but I think this cycle, Axie has gotten better and newer titles have gotten better too. We just need to put those in front of the users.
Secondly, it’s about the infrastructure. Some folks might think infrastructure is boring, but I think critically infrastructure needs to happen and tooling around infrastructure needs to evolve as well. I’ll give an analogy.
We’re very bearish on tokens in general. Why does everything need a token? There’s no possible way in the future that everything will have a token. I remember having this conversation many times. I was always of the opinion that applications and most assets will have a token because if you don’t that’s missing a little bit of the benefit of blockchain technology and financialization and injecting liquidity into this asset or application.
I think it’s very clear now that we’re going into a world where everything will be tokenized. From a chain-perspective, every large application, whether it’s general consumer or gaming, is going to have its own app chain. We’re calling ours a game chain.
But we’re at this point in time where the technology and the user experience around the chain hasn’t caught up yet. We’re at the peak of inflated expectations. But in the very near future, what we’re trying to show with the open gaming ecosystem and all these game chains that we’re helping to power is when you play a game, it’s going to be running on its own blockchain.
But as a gamer, as a user, you won’t notice the difference. You won’t need to bridge. You won’t need to switch networks in your wallet. You’re just going to play the game and get rewards as a player. That’s the user experience.
As a developer, there’s also a lot of benefits to running your own chain. You don’t have to share block space with other folks on your chain and you don’t have to share fees or introduce additional costs for those fees and pass them to your gamers.
One of the biggest problems in the traditional gaming space is just the broken business models. They create a lot of perverse incentives. All the money goes to GTA VI and these large triple-A titles. We’re not seeing a lot of novel titles. I think crypto is the way and the fundraising vehicle and the technology that can lead to the resurgence of fun gaming, nostalgic gaming experiences.
Without getting too technical, how does B3 actually work?
At a very high level, Base is a layer two that settles onto Ethereum as a layer one. One of the technical mechanisms that happens is that every so often Base will essentially batch transactions together and then settle them onto Ethereum. Some layer twos also split their settlement and their data availability, which leads to additional cost benefits. What we’re doing is very similar, but instead of using Ethereum as the settlement layer, we’re using Base. And we’re using Celestia for data availability.
The key point here is we are big believers in the Base ecosystem. Execution happens on our chain and that’s fast and performant. But when you’re thinking about a settlement layer, you need to find one that isn’t going to be hacked, isn’t going to reorg, because that’s where transactions will have finality and where they’ll ultimately live.
I have full confidence in the Coinbase team and the Base team and their decentralization roadmap to further de-risk and diversify the infrastructure behind the network.
How do you keep composability and interoperability in this ecosystem?
What we’re doing in terms of building this network of chains has been done before. It’s been done with Avalanche. It’s been done with Polygon. Avalanche, to its credit, is the pioneer of this idea of having your own blockchain through subnets and there are two massive titles in their ecosystem – Off The Grid from Gunzilla and MapleStory Universe.
But the way the chain has been developing is that these two have their own blockchains, which leads to user fragmentation and liquidity fragmentation. You have to jump back and forth between the different chains. Interoperability tech will definitely be there. Avalanche is a fantastic team and other people are working on interop solutions, but the challenge becomes what’s the economic incentive?
Will MapleStory and Off The Grid actually send users to each other? I think there’s a disincentive for them to do that. Once you onboard the user to your blockchain and your game, are you really going to open up that ecosystem and just let that user go to MapleStory?
To me this defeats the whole purpose of blockchain, which is to be open and permissionless. I felt like we needed to take a step back. Chains for everyone makes sense. Interoperability from a technical perspective is going to happen. But what’s missing is one of the core features of blockchain, which is getting everyone economically incentivized and aligned.
So one of the key features of our open gaming ecosystem is if let’s say Parallel – which is launching Prime Chain – has a user that goes from its chain and buys an NFT on InfiniGod’s chain or does a swap on InfiniGod’s Godchain or does something that generates onchain revenue, 30% of that user’s onchain revenue is going to go back to Parallel.
This borrows from web2 affiliate models, where we are encouraging developers to send users to each other and still have a sustainable business model. One of the other examples is that we have our own app in the ecosystem called Basement.Fun. You go there, it’s like a Miniclip experience where you go and can pull up games and instantly play. There’s more than two million wallets on that.
So if a Basement user plays something on Godchain, we will get 30% of that user’s revenue so we’re very incentivized to send our users and encourage them to try out different titles in the ecosystem because ultimately, we all benefit.
Where do you want to be at the end of the year in terms of titles?
Just to shout out again to Parallel and Kalos, who have been fantastic. They’re building three titles – Parallel TCG, which is partly on Ethereum and partly on Base. Colony is on Solana and the third title is Tau Ceti, which is a third person shooter in which you can use your Prime Avatars. That one is going to be on B3 and we’re really excited about it.
More generally, what I’m excited about is working with very high quality visionary builders who get crypto. There are a lot of gaming studios which operate from a web2 mindset and crypto is an add-on or a way to raise money. There will definitely be opportunities for those folks to grow their titles but the ones that will be most successful in B3 are the projects who can build great games and have a belief in crypto because we’re going to help them power the tech and build the tech and the smart contracts and the marketplaces.
We’re looking for new ideas. If we see something with an amazing idea, we’re gonna back them with our marketing, our brand, our community, and then also back them with the financial support they need to bring that idea to life. This is something I’m a super strong believer in. Some of those will fail, Publishers don’t have 100% hit rate, but think the one or two that do are going to be massive, massive hits.
How does AI fit in?
Yes, the AI narrative has hit pretty hard in crypto. From November, December, everyone’s talking about AI agents. But when everyone’s talking about it, I tend to feel a little cautious and a little wary of what’s going on. Like with NFTs back in the day.
So the way we think about AI is that we want to integrate it. I think it’s definitely going to be a core part of not only game development, but also how newer genres and types of gameplay will evolve. But we want to do it thoughtfully and in a way that makes sense for our ecosystem.
As an example, we launched two experimental collaborations recently, one with Luna, which is one of the more popular AI agents created by Virtuals. This is a simple platformer game in which you can play as Luna. There’s going to be v2 of that game where the Luna model will be inside the game in some fashion and Luna might be streaming the game as well, so it’s kind of meta in the sense where you get to play as Luna, and then Luna is streaming. I think that’s an interesting direction.
The second is Zerebro, who is one of the top AI agents on Solana. That team is amazing. We are building a game where you can play as Zerebro in Zerebro’s world. Again, the idea there is that the inputs of the game are going to change and evolve as Zerebro interacts and engages with the gameplay world.
For me, it’s testing and thoughtfully integrating AI agents into games. I can’t pretend to say I know where the future of this is going. We’ve been using AI a lot to speed game development and production times internally, which I know a lot of other studios do as well.
So the B3 token is now live and it’s doing well but having a live token now means everyone just views your success through the lens of the token price.
Yes, the B3 token represents not just what NPC Labs is doing in the ecosystem, but the broader B3 open gaming ecosystem as well. If you’re looking at B3 from a value perspective, it’s really an index on the success of all of these game chains so that’s not just us. We’re really motivated to help everyone win and everyone succeed in that sense. Tokens often times are a big distraction, not just to the people building in the ecosystem, but also to the team and the company. At Coinbase, we had a saying that ‘It’s never as good as it seems, and it’s never as bad as it seems”.
Don’t let price affect your mentality and your sentiment and your ability to ship. So for me, the token is a byproduct of our execution and our ability to deliver and ship an ecosystem for everyone who believes in us. As long as we put our heads down and do our job the token and its price and everything else will figure itself out. That’s generally how we think about things.
Of course, there’s moments where you lose sight of that a little bit when there’s criticism or things aren’t going as well as you wish, but really this is our north star. We shipped a lot of things in six months and we’re going to continue to ship at a high velocity over the next six months, six years and so on.
Find out more at the B3 website and X.
Comments are closed.