Ripple is one of the biggest blockchain projects out there. Its cryptocurrency XRP ranks third on CoinMarketCap in terms of market value and has overtaken Ethereum for second place several times over the last year.
The tagline for Ripple is “one frictionless experience to send money globally”. Through RippleNet, Ripple connects banks, payment providers, and digital asset exchanges to transfer money across borders in a way that’s fast, cheap, and reliable.
Ripple gets a ton of hate from the blockchain community, and it’s easy to understand why. The original blockchain / Bitcoin vision was to take away power from the financial institutions that controlled the flow of money. Instead, Ripple works together with them, to make their services cheaper and more efficient. To oil their machine.
Additionally, one of the fundamental pillars of blockchain technology is that it’s decentralized, so no one party has too much power. But many people in the blockchain community consider Ripple’s blockchain to be centralized, because you cannot mine XRP and because no one really understands how its consensus mechanism works in detail. Of course, it’s no crime being a centralized blockchain project, but Ripple claims that it’s XRP Ledger is decentralized.
This being said, Ripple’s numerous products are in demand and work well. They have over two hundred customers, with big names such as MoneyGram, Santander, and Standard Chartered. Ripple is a global company with a few hundred employees and access to plenty of funding.
Clearly, Ripple seems to focus on the finance industry. So what do they have to do with gaming?
The Xpring and Forte Partnership
Xpring, pronounced as “spring”, is Ripple’s attempt to branch out. It’s an initiative that wants to invest in, incubate, and acquire promising blockchain projects. Projects in Xpring will use XRP and the XRP Ledger, which is a fast, scalable and stable blockchain. This doesn’t just make it a good blockchain for financial transactions, but for a myriad of other industries too, including gaming.
Forte is a new blockchain company founded by Kevin Chou. Chou is the co-founder of Kabam, a $400 million gaming company with over 900 employees that creates truly free-to-play (F2P) mobile games. Chou realized that only a fraction of F2P games earn a profit, which leads developers to create a pay-to-win business model that’s not very well liked by gamers. Chou believes that blockchain technology can solve this problem, and created a better alignment between gamers and business models. As such, he created Forte.
Although Forte itself was only announced in February 2019, a month later they already announced a $100 million partnership with Xpring. The funds will come entirely from Xpring and will be used to fund and support the game developers who want to integrate blockchain technology into their games. There are two requirements: the game already needs to have at least 50,000 daily active users (DAU) and the developers need to have an interest in blockchain technology for better business results.
Forte chose to partner with Xpring specifically because both teams believe that the future of blockchain technology is interoperability, i.e. the ability to transfer assets easily and efficiently between blockchains and other ledgers. Forte will leverage Codius, an open-source hosting platform for smart contracts created by Ripple’s previous CTO Stefan Thomas, as well as Ripple’s Interledger Protocol (ILP) and XRP as a base currency pair for financial transactions.
Here’s What I Think About It
It’s an interesting story. One of the initiatives of Ripple, a company that’s almost entirely focused on improving the flow of money, is teaming up with a blockchain gaming company that’s so new it doesn’t even have a website yet. Ripple will provide $100 million to Forte, but Forte will manage the fund. Forte’s tech stack is built on Ripple’s ILP and XRP, as well as Codius, which is a project by Ripple’s former CTO that’s also sponsored by Xpring.
To me, it feels like this partnership will embed developers quite strongly into the Ripple ecosystem. Compare this to TRON, which announced a $100 million gaming fund called TRON arcade last November, where the only requirement seems to be that developers program their game on the TRON blockchain.
This is just an observation and not a complaint. After all, the DGaming industry can only benefit from such partnerships, and Ripple’s ecosystem is full of excellent products that are proven to work. The more scalable, fast, and reliable blockchains that are available for gaming developers, the better.
In addition, considering Kevin Chou’s background in Kabam, it seems like Forte is going to focus on companies that want to create F2P mobile games. Just recently, DGaming wrote about why it’s an excellent idea to have mobile as your blockchain’s primary focus. And who doesn’t prefer truly F2P games over the pay-to-win business model? I check the reviews of any new mobile game I install for indications whether it’s pay-to-win. If there are too many complaints about it, I don’t bother installing it.
Of course, companies need some way to earn money, but a game such as Fortnite has already shown a way to earn billions of dollars while still being entirely F2P, through purely cosmetic enhancements. This is a trend that’s set to continue, and blockchain technology is versatile enough for creative game developers to come up with new F2P business models. In the meantime, Ripple’s XRP and ILP can help process in-game payments quickly and efficiently, and Codius seems to be a good platform for developers to create smart contracts without having to learn a new programming language.
But I have a nagging doubt I cannot get rid of. The Xpring / Forte fund is aimed at developers of games that already have live economies, with at least 50,000 DAU. Most news articles glossed over this fact, but it has serious implications: in one fell swoop, this one requirement eliminates all the blockchain gaming projects currently out there. There’s no DGame currently online with more than 50,000 DAU.
As such, the Xpring / Forte fund doesn’t seem to be a fund aimed at blockchain games. It’s aimed at traditional games with developers that are interested in blockchain technology. The games that I believe are ideal for the fund are the ones that are currently pay-to-win, but want to migrate to an F2P business model with blockchain technology. That would be a positive development for the gaming industry and for gamers.
But it’s as likely that games who are perfectly satisfied with their current business model will want to apply for the fund to make their in-game payments faster, cheaper and more efficient. This will result in more revenue for the game developer, which might not trickle down to benefit the gamers. It’s blockchain technology used to empower the ones who have the power already, instead of the end users.
It doesn’t help that Ripple’s products are considered to be centralized either. The centralized / decentralized debate hangs over Ripple like the Sword of Damocles, and it impacts this partnership too. If we want traditional games to implement blockchain technology, wouldn’t we want the blockchain that they’ll use to be decentralized? A blockchain where people can mine for blocks and where the consensus mechanism is transparent? Where the XRP supply isn’t controlled by the issuing company?
On other blockchains, people have power. You can mine for blocks of transactions, you can participate in the consensus mechanism, and you can decide to fork away from the blockchain if you’re not happy with the direction it’s going in. That’s not possible on Ripple’s blockchain.
To me, the Xpring / Forte fund is money for traditional games who want to make their payment system more efficient. It’s not a fund for budding blockchain developers, nor for traditional developers who want to give power to the players. It’s about oiling the machine and not about shifting power. And that makes sense, because which team of developers with a game that has 50,000 DAU would want to give power away?
While the $100 million announcement made a big splash in the blockchain gaming community, it doesn’t really feel like blockchain news per se. It feels like Ripple trying to work its way into one of the best industries for blockchain technology, but in a way that doesn’t conform to the original vision of decentralization; of taking power away from centralized entities.
I genuinely hope I’m wrong. I hope the fund will be used to support actual blockchain games too, games that might not have 50,000 DAU. I hope that the fund will be used for traditional games to become truly F2P with blockchain technology, that it will lead to games where players fully own digital assets and have a say in the direction of a game. That would be a groundbreaking development in the gaming industry. But my hopes aren’t up.