CryptoKitties is a household name and a cultural phenomenon in the blockchain industry. Its accomplishments are etched in blockchain’s still-young history and it’s hard to underestimate the impact that this game has had on the blockchain industry and, in particular, on the DGaming industry. There’s much to be grateful for.

I tend to think of CryptoKitties as DGaming’s Big Bang: sudden and unstoppable. It all started during ETHWaterloo, the world’s largest Ethereum hackathon, organized in Waterloo, Canada, from 13-15 October 2017. In 36 hours, over 400 participants from 32 countries had to develop the best possible DApp they could think of and present it to some of the biggest names in the blockchain industry, from Vitalik Buterin, founder of Ethereum, to Joseph Lubin, founder of Consensys.

It was there that Axiom Zen surprised everyone with the alpha launch of a game called CryptoKitties. Each ETHWaterloo participant who signed up for the game received two CryptoKitties as a gift. The day after the conference, hackers, participants, and even casual DGamers had already bred over 1,500 CryptoKitties.

The first few CryptoKitties

CryptoKitties saw its official launch on November 28, just over a month after the hackathon, and the rest is blockchain history. The game was instantly popular and grew at a pace no other blockchain project had seen before. In December 2017, CryptoKitties accounted for 20-25% of Ethereum’s traffic, turned over $5 million in revenue and received press coverage in Vice, BBC, and the New York Times.

People were paying significant amounts of money for these cute digital collectibles. We’re talking tens of thousands of dollars, and sometimes over a hundred thousand dollars. The game was so popular it slowed down the Ethereum network, showcasing the inherent scaling difficulties of blockchain platforms using fully decentralized Proof-of-Work consensus mechanisms.

Much has happened since. Dapper Labs was spun out of Axiom Zen to focus entirely on developing CryptoKitties. The studio raised $12 million in venture funding in March 2018 and raised another $15 million in November 2018, from big-name investors such as Venrock, Samsung Next, and GV (the venture arm of Alphabet). This, despite dwindling player numbers.

That’s right. CryptoKitties has not been able to retain its popularity. Coinciding with the crypto bear market, the game has trended towards ever-lower user numbers. As of April 2019, CryptoKitties ranks just about fifth when comparing Ethereum games. It barely cracks top ten in most-used Ethereum DApp.

That’s not to say the game hasn’t been without its milestones. In September 2018, a CryptoKitty called Dragon was bought for 600 ETH, or around $170,000, which was the most expensive CryptoKitty sale to date. Additionally, the game recently saw the birth of its 1.5 millionth CryptoKitty, called Papacatuanuku.

But let’s take a step back. There’s a reason this game was so popular and has retained at least part of its popularity for longer than most other DGames. What made it so compelling and how does the game play? Find out below.

Technically, A Step Forward

Underneath CryptoKitties’ cute surface lies a technical innovation that took the blockchain community, and in particular the Ethereum community, by storm: ERC-721, or non-fungible tokens (NFTs), which was proposed by Dieter Shirley, now CTO of Dapper Labs, in late 2017. It’s this one innovation that spawned the first batch of digital collectible games using blockchain technology, including CryptoKitties.

All the above Kitties (and, in fact, all Kitties in general) are ERC-721 tokens

Here’s the problem that Shirley and his team identified that digital collectibles hadn’t become popular yet for three main reasons. Firstly, there had always been the involvement of a central issuing authority that had the power to create more digital collectibles, diminishing the value of existing collectibles. Imagine Picasso were still alive and you’d bought a new painting of his. Now imagine he’d start producing exactly the same painting multiple times over. Would it lower the value of the new painting, which you thought was unique? Yes, it would. Owners of digital collectibles issued by a central authority are always at risk of something similar happening to them.

Secondly, owners of digital collectibles still relied on the continued existence of the issuing authority. Any asset you bought that’s been issued by Blizzard, for example, is purportedly yours, but still lives on the Blizzard platform. As such, if Blizzard goes down, so does your asset. Additionally, if you read through the T&Cs of centralized entities issuing digital collectibles, you’d realize that the digital collectible you thought were yours aren’t technically yours.

Thirdly, many digital collectibles have little purpose. Whereas a physical collectible, such as a piece of art, can be displayed in a museum or placed somewhere in the real world, a digital collectible is much more intangible, floating around in bits and bytes with hardly any function. What’s the compelling reason, other than monetary appreciation, for someone to buy something like that?

Blockchain technology and ERC-721 tokens solve these three problems, and CryptoKitties was the first game to take full advantage of this. Firstly, there is no central issuing authority. Axiom Zen had created a “Kitty Clock”, i.e. a smart contract on the Ethereum blockchain that would issue a Generation 0 Kitty every fifteen minutes and that would stop in November 2018. There would be no central issuing authority that could devalue existing collectibles by suddenly issuing new collectibles.

Secondly, all Kitties live on the Ethereum blockchain as ERC-721 tokens. If you buy a CryptoKitty, ownership of that Kitty will move to you entirely. So if Dapper Labs goes bust, the Kitty will still be yours. It won’t disappear.

Thirdly, CryptoKitties are more than just digital collectibles with a value attached to them. You can use them to breed with other Kitties or play with them in the broader CryptoKitties Universe (the KittyVerse - more on that later).

Playing CryptoKitties

CryptoKitties is a very well-polished game. From the excellent game guides to the funny puns (“the Future is Meow,” anyone?) you can feel that this game has been built with passion and integrity. In their white paper, which they call their white pa-purr, Dapper Labs says that the main purpose of CryptoKitties is to make blockchain technology accessible to the average consumer. That’s reflected everywhere in the game. There’s even a whole chapter in their Getting Started Guide that explains Ethereum gas fees.

The game has a comprehensive FAQ for those new to blockchain gaming

The premise of CryptoKitties is extremely simple: you can buy, sell, and breed CryptoKitties. Contrary to nearly all of the other DGames I’ve reviewed on dgaming.com so far, CryptoKitties is a breeding game. Each Kitty has “Cattributes” in its genetic code, which are responsible for different traits in Kitties and which make each Kitty unique.

Looking at your Kitty, you’ll see a few visible trait categories: fur pattern, highlight color, eye color, eye shape, base color, accent color, mouth, and fur. These traits are the result of a Kitty’s genetic code, which is in itself a result of the genetic codes of its parents. Most traits will be inherited from either parent, but sometimes a new trait can appear, either because both parents had hidden genes that hadn’t developed into visible traits (technically called a phenotype) or because two separate traits from each parent combined created a mutation trait in the newborn Kitty.

There are three official types of Kitties: normal, fancy, and exclusive. Normal Kitties look the way they do because of their genetic code. Fancy Kitties have unique art and are created by finding a particular genetic recipe. You can use Fancy Kitties to breed more Fancies. Finally, Exclusive Kitties are the rarest type of Kitties. They’re released to commemorate special events or community members.

Some exclusive Kitties. Understandably, they look extremely cool

The cheapest CryptoKitties cost only 0.001 ETH, but they’ll be of a higher generation (gen). Higher gen Kitties have longer cooldowns before they can breed again when compared to lower gen Kitties. However, CryptoKitties helps new players by presenting them with a list of “great-value Kitties,” which are cheap Kitties that are gen 3 or lower, meaning you won’t have to wait hours or even days before you can breed your next Kitty.

Breeding a CryptoKitty is easy. Once you have two Kitties, you pay 0.008 ETH plus a transaction fee and they’ll produce an egg that becomes a new CryptoKitty. Alternatively, you can also breed with a public sire for a fee. It’s best practice to breed two Kitties of the same generation, because the new Kitty’s gen will be whichever parent’s gen is highest, plus one. For example, a gen 0 Kitty breeding with a gen 5 Kitty will result in gen 6 offspring.

Breeding two of my Kitties, to produce a gen 5 Kitty

In their Getting Started Guide, Dapper Labs details a few ways to play the game. You can be a Kitty Collector, someone whose purpose in the game is to collect as many wacky, funny, cute Kitties as possible; a Breeder, someone who breeds for specific Cattributes to make the most unique Kitties available; a Trader, someone who relentlessly scours the market and aims to get a return on his invested money; or a Fancy Chaser, someone who wants to collect and breed as many Fancy Cats as possible.

However, Dapper Labs also specifically mentions that CryptoKitties should not be seen as an investment portfolio or a get-rich-quick opportunity. It’s a collector’s game whose purpose is to introduce a mainstream audience to blockchain technology. Don’t look at CryptoKitties as a way to earn a quick buck, or any buck at all. It’s interesting that Dapper Labs frames their game this way. It shows that they understand that the hype the game has seen and that they realize they’ll need to manage expectations for an incoming user base.

The Future of CryptoKitties

Despite Dapper Labs outlining ways to play the game, CryptoKitties has limited playability. Collecting and breeding CryptoKitties gets old quickly, particularly if that’s the only thing you can do with your Kitties. There’s little reason for casual players to return to the game, which I believe is one of the main reasons behind its decline in active players.

The developers realized this quite early on. In May 2018 already, they announced the KittyVerse, or a set of 3rd-party apps that you can use your Kitties for. More specifically, Kitty Race allows you to race your Kitties, Kitty Hats allows you to don them with cool hats, and Kitty Battles allows you to pit them against one another, all for a small Ethereum fee.

However, since then, not much has happened in the KittyVerse. You can still only play the three games mentioned above, and access to the KittyVerse itself is hidden as the final item underneath “more” on CryptoKitties’ main website. Although a good idea initially, it seems to have lost momentum quite rapidly.

Maybe Dapper Labs is up to something bigger than CryptoKitties. They’d have to be, given their $15m funding round only a few months ago. But so far, all we know is that they’ve been hinting at a new crypto wallet called Dapper. Otherwise, most attention still seems to go towards CryptoKitties.

As such, it’s hard to predict the direction of CryptoKitties. It’s well-polished, well-branded, and great for players new to blockchain technology and DGaming. But its limited playability has resulted in a declining user base, a trend that seems set to continue if Dapper Labs doesn’t drastically overhaul the playing experience and comes up with something new and exciting.

CryptoKitties didn’t turn out to be the Killer DApp many people thought it would be in December 2017, but it certainly came close. As it stands today, CryptoKitties is an enjoyable game for people who like collecting and who are interested in playing a game that made blockchain history.