Immutable and Merit Circle Join Forces

We’re exploring the frontier of crypto gaming! The seeds of the crypto gaming thesis are looking to play out. Today we’re hosting Robbie Ferguson from Immutable and Marco van den Heuvel from Merit Circle. Merit Circle is migrating from Avalanche to Immutable, bringing along their gaming ecosystem, DAO, and sizable treasury. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 https://%E2%81%A0https//k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask https://%E2%81%A0https//bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum ⁠ 👾GMX | V2 IS NOW LIVE https://bankless.cc/GMX 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap ------ TIMESTAMPS 0:00 Intro 4:00 Immutable 8:00 Merit Circle 14:30 Announcing the Partnership 22:40 A Beneficial Relationship 25:55 Merit Circle Treasury 28:13 New Games 34:40 The Terms of the Partnership 37:30 Vision for the Future 40:00 Avalanche ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ https://www.bankless.com/disclosures%E2%81%A0

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04David Hoffman?

  Welcome to Bankless, where we explore the frontier of crypto gaming, just like we did last cycle. And now, two years later, we're starting to see some of the seeds of the crypto gaming thesis that were planted in 2021 start to bear fruit. This week on the Monday podcast, we had Van Spencer and Michael Anderson reawaken the crypto gaming thesis. And today on the show, we've got a continuation in activity in the world of crypto gaming. Today, we're hosting two leaders from different corners of the crypto gaming ecosystem, Robbie Ferguson, who longtime Bankless listeners will be familiar with from Immutable, and new to the show, Marco Van den Hove from Merit Circle. And they've gotten an announcement. I'm sure you can put the puzzle pieces together. Merit Circle is announcing their migration from Avalanche to Immutable, which is built on the Polygon

• 0:49David Hoffman?

  ZK EVM. What's Merit Circle? It's a DAO with $100 million treasury. It's got a gaming tech stack, some games, some players, investors, a whole ecosystem, really, deciding to join forces with Immutable so they can go further together. I'll save all the details for Robbie and Marco to explain themselves. A quick disclaimer before we get into the episode, Ryan and I are angel investors into Immutable. You can see all Bankless disclosures at bankless.com/disclosures. And now, let's get right into the episode with Robbie and Marco. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange for crypto in 2023 and 2024. If you do not have an account with Kraken, consider clicking the link in the show notes to getting started with Kraken today.

• 1:33David Hoffman?

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• 3:01David Hoffman?

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• 4:28David Hoffman?

  Try out GMX V2 now at app.gmx.io. Now, on to the show. Bankless Nation, I am excited to introduce you to Robbie Ferguson and Marco Van den Hovel. Robbie is the CEO and co-founder of Immutable, the leading web 3 gaming platform that recently, not too long ago, moved to the Polygon ZK EVM. We've had Robbie on before, back, I think, in like 2020, talking about rollups before anyone even was talking about rollups. Robbie, welcome back to Bankless.

• 4:56Speaker 01

  Thanks, David. Good to be here.

• 4:58David Hoffman?

  And Marco is the co-founder and CGO, Chief Gaming Officer of Merit Circle, often described in Merit Circle as a spider in the web, involved in various activities in the Merit Circle DAO. He's got a large focus on strategy gaming and the community side, as well as their weekly Twitter Spaces. Marco, welcome to Bankless for the first time.

• 5:17Speaker 02

  Thank you, David. Pleasure to be here.

• 5:19David Hoffman?

  There is an exciting announcement that we're about to unpack between Immutable and Merit Circle, but just to just completely rewind and start at the setting the table. I think we want to talk about with what Immutable is, which, you know, most Bankless familiar, a long time Bankless listeners will have seen Robbie here or two a few times on the show. And then also, we're going to need to go into what Merit Circle is to really kind of just set the table here. So we'll get started with that. Robbie, what's Immutable?

• 5:47Speaker 01

  Immutable is the one-stop-shop leading web 3 gaming platform. So our goal is whatever games requirements are to get them live, you can come and build on us, we'll connect you with the relevant ecosystem partners, we'll help you build with, you know, fully-integrated ZK EVM, which we're launching sort of in beta next month with Immutable ZK EVM, part of, obviously, the Polygon tech stack. We have our global order book, which aggregates liquidity and unifies liquidity across marketplaces. We're launching cross-roll up liquidity next year. And our goal is basically any single user experience requirement, developer experience requirement, scaling or liquidity fragmentation issue that games face to get live, we will solve. We've been around now since 2017, where we built the first ever web 3 game on any blockchain,

• 6:32Speaker 01

  which was an on-chain game. It's funny to see it come back in vogue now, but really, our mission is, there's 3.1 billion gamers, they're each spending the vast majority of in-game revenue on items, and none of that is ownable or saleable. And our thesis is pretty simple. Rather than future projections around how could DEXs be used in the future of, you know, foreign exchanges, which, in my opinion, will happen, the least controversial thing is gamers already spend 150 billion US each year on in-game items they don't own and can't sell. Giving them ownership of that via Web3 is a direct-to-next value proposition on a market that already has major demand. So that's our goal. We're nearly 300 people today, raised well over 300 million US dollars. And as of this partnership with Polygon over

• 7:17Speaker 01

  the last year, we've expanded our market share to close to 70% of all Web3 games today.

• 7:22David Hoffman?

  And Robbie, I remember we had you on very, very early in one of the earliest Bankless panels. And you were one of the first people talking about rollups as a technology to scale Ethereum, but not just rollups, specifically ZK rollups. So the whole immutable ecosystem has been working in the ZK Layer 2 space on Ethereum for a number of years now. Is it safe to say that so immutable, it wants to be the gaming ecosystem? So the immutable thesis is pretty synonymous with the gaming thesis, the crypto gaming thesis, I would say, added on to, you know, add on Ethereum to that and to ZK rollups to that as well. And you smash all of these things together and you get the immutable ecosystem? Is that a fair characterization?

• 8:03Speaker 01

  Absolutely. Yeah.

• 8:05David Hoffman?

  Cool. Okay, so that's immutable. Marco, let's turn to Merit Circle. What is Merit Circle?

• 8:10Speaker 02

  Sounds good. Yeah, try to beat Robbie's intro, eh? So Merit Circle, in a nutshell, is a Web3 gaming DAO. Proud to say the largest Web3 gaming DAO there is right now. And we're largely focused on four things, which would be investments, that's something that we've been doing from the beginning as well as gamers, something we've been involved with from the beginning as well and still love very much. We are working very closely with a couple of studios on the studio projects that we do. And finally, we do infrastructure. And I think the infrastructure is something that we'll be talking about quite a bit today, and I'm very excited about. Yeah, I think, you know, Merit Circle is a DAO in essence. So we have contributors from all over the world and have been operating alongside

• 8:54Speaker 02

  of some mandates that have been created through proposals by the community from the beginning. So that could be an investment mandate that we have, a de-risking mandate that we have. And that's been very exciting. Yeah, I think on the DAO side, sorry, we obviously have, transparency is key, and therefore we have quarterly reports, which I think have been very interesting for people to read to see not just who we're working with, but also who we've been investing with. And that's been super exciting along the way. Yeah.

• 9:24David Hoffman?

  So when we say Merit Circle is a DAO, sadly DAO is not a very illustrative word in this day and age. So if you tell me you're a DAO, I'm like, okay, I'm starting to get an idea for what you are. You know, Ave DAO, for example, governs the Ave protocol. Or Maker DAO, for example, governs the Maker protocol. It sounds like this is a little bit different.

• 9:46David Hoffman?

  Merit Circle DAO is more of the 2020, 2021 version of a DAO, of like an on-chain organization with certain mandates and directions. But other than that, it's mostly a governance system with people interested in the gaming space, investing in gaming and building products in gaming and a collection of other things. Is this a fair articulation?

• 10:08Speaker 02

  Yeah, I think that's pretty fair. Yeah, I think from the beginning, like I said, the main thing that we wanted to focus on was one transparency, but be also enabling people from across the globe to be able to build with us. And I think especially on the gaming side, it's been interesting to see different deals pop up. And one of the things that we saw in the beginning was those treacheries that were being worked with. And we were like, why don't we put the power in the hands of the community to decide what we do with the treasury that we have? And the really interesting part that I find is that it took us from where we started, very small, to where we are today. And today, that focus is mainly on the infrastructure side. And so right now that we're talking with Robbie from Immutable, I think something that we'll be talking about quite a bit is Beam.

• 10:52Speaker 02

  And so what I didn't mention when I introduced Merit Circle was Beam. And that was purposely done because Beam is a part of the infrastructure component that I mentioned earlier. So throughout this past two years, if I were to summarize it in a nutshell, we've been working with so many studios and they kept saying, you know, we know how to build a proper game, but we're not quite sure what we want to do on the Web3 site just yet, or which blockchain to choose. And I think one of the fun facts that I heard in your previous episode with your guest was 50% of the studios that are building game right now don't necessarily have a chain picked yet. And so for us, it was like, you know, what do we want to do? What do we want to work with? And so the products that we built on the Beam side.

• 11:36Speaker 02

  Is basically what we feedback we've gotten from those studios. And the things that we have built, if I were to summarize it, is a toolkit of tools for both the gamers and the game studios. For the game studios, if I were to dive into that a little bit, we have the Beam Chain, which has its own AMM bridge, etc. We have a Beam Hub, which is more of a content platform that came from the beginning of Merit Circle, where we did a lot of content so people could explore different games, so that's more for the gamers. And we have Sphere, which is an NFT marketplace that is 100% focused on gaming. And yeah, I think the Sphere part, especially what we'll be talking about quite a bit today,

• 12:18Speaker 02

  and what I'm very excited to talk about with Robby as well. Yeah, I'll stop there for a minute.

• 12:24David Hoffman?

  Okay, so Merit Circle is a DAO. Beam is like a gaming tech stack that is a product of Merit Circle? Is that a fair articulation?

• 12:34Speaker 02

  Yeah, yeah, exactly.

• 12:36David Hoffman?

  How can we measure the magnitude of these things? Like how big these products are? Or how big Merit Circle is? Like the number of users or participants in the DAO? Or like value of these things? Is there any way we can start to illustrate how big this system is?

• 12:51Speaker 02

  Yeah, I think so. I mean, to start with the treasury, the treasury that we have right now is over 100 million dollar worth. And that is excluding native tokens. So we like to do this in a way where we exclude native tokens.

• 13:05David Hoffman?

  That's the right way to do it, yeah.

• 13:07Speaker 02

  Yeah, we want to calculate what we can actually work with, basically. And so that treasury is quite big. But also, we have, on the user side, obviously you have token holders. You have people that just hold. You have people that actually actively contribute to the DAO and vote on proposals. And you have the gamer side. I think the gamer side here is probably most relevant. And what I can say there is, right now on the Merit Circle side, we have a couple of thousands of gamers that are actively trying out different games. And honestly, many of the games that we've been working together with, because we've been doing marketing activities with them. And that's something that we are obviously excited to continue to do. But also games that are outside of our investment portfolio or ecosystem, simply because it's a community of gamers. And that's the way that I liked to build it from the ground up.

• 13:52Speaker 02

  You can play, web 82 games in our Discord as well, I don't mind. But, you know. A majority of them likes to try out those different games. But what I find interesting here as well, too, is that if you look across the board in web pre-gaming, there's not a lot of gamers out there yet in total if we compare it to what we see on the other side, if you will. And so I think for us, you know, we haven't necessarily been particularly focused on user acquisition. But I think now that we have a lot of web pre-games coming into action, coming with fun to play early versions, I think we can do a lot more on the marketing side from here on to grow the community further.

• 14:30David Hoffman?

  Okay, so I feel like the table has been appropriately set. I know what Immutable is, I now know what Merit Circle is. And well, you guys are both here on the podcast together with me. So these, so I'm hearing that these particles are getting smashed together. Can we go into the specifics about what's actually going on here? Robbie, can you give us like the TLDR, just download us real quick?

• 14:52Speaker 01

  Yeah, I might start with a bit of historical context, which is obviously we're actually on the show, start of the year announcing the Immutable Polygon partnership, which was effectively Immutable and Polygon at the end of last year, both had 35% market share. The vision was, well, if we created a united product stack, because tech, no, no part of our technical stacks are actually competitive, you know, Immutable building of this platform layer, Polygon building of this scaling protocol layer, we could simplify the choice for game developers and massively improve our ability to work effectively in market. Since that partnership, we've gone from 100 to over 220 well-funded games, including high seven figures of funding or with credible shots of hits, I mean, thousands more in test net.

• 15:33Speaker 01

  Our win rate has gone from 35% to now close to 70%, which means in any given deal, the, the amount of deals that we would win relative to other blockchains who are bidding for a game, so effectively a good proxy for market share. And that's all, by the way, with every single grant that we recommend to the foundation is not, hey, just go dump this on market, everything is under retake, which is, I guess, one of the magical things about our foundation is it's extremely efficient relative to, I think, how some other approaches have been. Executed. And a very similar story, I think, happened with Merit Circle and with Beam, which is, you know, over the last couple of years, we've been competing in market together.

• 16:14Speaker 01

  There's been deals where, and for no reason because of the tech stacks themselves, it's just the underlying blockchain infrastructure, because obviously, you know, we care about where things are minting and the infrastructure of Merit Circle and Beam is also, you know, built on different infrastructure previously. And the vision was, well, ultimately what matters is where are the games building and how can we simplify the value proposition to end users? And I think this was, again, an opportunity to take the largest web three gaming down, which is Merit Circle, with all of the infrastructure it's built across Beam and Sphere and their deep knowledge of gamers, and combine it with the leading web three gaming platform, Immutable, and under the hood, of course, Polygon, to create ultimately an unstoppable

• 16:56Speaker 01

  force for games. So we're pretty excited for, you know, if the Polygon partnership bought our combined market share to 70%, what's this going to do? We're pretty excited for, again, making sure gamers don't have to have their number one thing be, what's the underlying infrastructure? And for game developers to spend countless hours talking to every major blockchain or infrastructure provider and trying to pick every, you know, like a piece of a jigsaw part of the stack. We want that to be an incredibly simple decision, but also a decision where that stack is incredible for them. So Marco, I don't know if you want to, you know, add anything on, but I know we're incredibly excited about what this is going to do for gamers, for developers, and, you know, I think when we go in market together,

• 17:40Speaker 01

  it's going to be a pretty unstoppable value proposition.

• 17:43David Hoffman?

  Wait, Marco, before I give it to you, though, Robbie, I think you told me what the details are without actually telling me what the details are. The details are, Beam is coming to Immutable. Give me, give me the mic draw. How do you put it into a sentence? What is this announcement?

• 17:57Speaker 01

  Yeah, I would say Mirror Circle plus Beam plus Sphere is choosing Immutable to expand to. And we're going to be focusing a lot of our efforts on developing infrastructure, publishing, services for games, and jointly trying to operate in market together.

• 18:13David Hoffman?

  Okay, Marco, what do you want to add to all of this?

• 18:16Speaker 02

  Yeah, what do you still want to add to this, right? I think it's already been pretty well summarized overall. I think for us, when we started with Mirror Circle, or better said, when we started with Sphere and Beam, Sphere 2 came out of the feedback that we've gotten from developers. And so for us, when we're thinking about this whole marketplace experience, but also Beam being the ecosystem of gamers, we want to be where the games are, we want to be where the gamers are. And for us, that's in essence chain agnostic. Having spoken with Robbie, having spoken with Polygon, all the other ecosystems, for us, it's very clear that Immutable, Polygon are among the biggest players, well, they are the biggest players in the web ecosystem right now. And there's a lot of games building on Immutable at the moment.

• 19:01Speaker 02

  And for us, just really excited to have, we have a common goal. And like Robbie said, we have been competing over deal flow and whatnot. And now you get to collaborate more towards that common vision that we have and that common goal. So yeah, I'm super excited to put this into action. I think the emphasis here today is on, is the start of collaboration. And it starts mainly on the Sphere, NFT marketplace side of things. But we'll see what the demand is from the game studios and from Immutable to see, which other products might be good fit here, what can we do together other than that? And go from there.

• 19:35David Hoffman?

  Okay, so I think the most interesting thing about this, Robbie, is kind of that progression that you told with the collaboration between Immutable and Polygon ZK EVM. So yeah, I think you said each had roughly about 35% of the market share. And I mean, what is Polygon doing? They're not really building gaming infrastructure, they're building chain infrastructure. They're building the ZK, part of the ZK EVM. And it's Immutable that's building the gaming infra. So if we're talking about the tech stack, you've got Polygon, which is the chain. And then you've got Immutable, which is the Actual infra built to support specifically games. And then you slap these two things together, which were splitting the market share, splitting the deal base of games. You said, like you said, 35% each, slapped that together into 70%.

• 20:20David Hoffman?

  And this is a similar story of just like, well, merit circle is also the other ecosystem elsewhere that is also splitting up gaming market share in the web three space. And now merit circle is all, it's all coming into one gigantic fold between Polygon Immutable and also merit circles. So all these things are kind of compiling on top of each other to just put all the gamers into one space. We don't have to split this ecosystem, put all the infrastructure, we can all go further together. That's kind of the spirit of this whole announcement, correct?

• 20:49Speaker 01

  I think one of the beautiful things you touched on is ultimately, we want to be building where the game developers are building and where the gamers are building. And to the extent we can create vertically integrated infrastructure with really sane recommendations to excellent products. It makes total sense to unify that. And I actually think, my thought on the web three space as a whole is people are really trying to build castles for no particular reason. They're trying to build the entire stack. And oftentimes to sort of justify VC driven valuations, because they think they need to have a scaling protocol team in order to be a legitimate team in the space. You know, the vast majority of companies you would talk to in the e-commerce industry would not say, hey, we have to build cloud infrastructure.

• 21:31Speaker 01

  The vast majority of cloud infrastructure companies would not say, hey, we have to build the infrastructure for cloud machines to be stored and reliably kept at 99.999% power supply. That's a company called NextDC. And I think there's just been this funny inversion of the product stack in web three. Over time, things should modularize and that will be a much more efficient solution for the end. But I think this is a very healthy part of strategic consolidation where people are finding partners where we can reduce costs or we can service game developers and games better. The way I would describe it is Immutable is almost like at the Stripe layer, Polygon is like at the AWS layer, and Marco, I don't know if you want to comment as the Shopify, or what do you want to position Beam and Merit Circle as?

• 22:15Speaker 02

  Yeah, I think that's a good comment. I think it could be the Shopify. I mean, honestly, like I said, we want to be mainly where the gamers are and build for the gamer experiences. So a lot of the blockchain tech, I mean, it's cool to talk about tech, but at the end of the day, the gamers want to play games. And I think taking a lot of that tech experience in the games in a way that feels natural to the gamers, I think that's where we come in and what we want to do. I think Immutable does a good job on that as well. So yeah, strength in its efforts.

• 22:41David Hoffman?

  So in terms of this partnership, in a partnership, everybody brings something to the table. So maybe I'll make you guys say something nice about the other person. So Marco, what are you excited about that Immutable has? So you can now use it over in Merit Circle. Like, what's the infrastructure that you're really excited to be able to tap into, or really the thing that excites you the most?

• 22:59Speaker 02

  Yeah, very good question. I mean, what I said earlier was, this is the start of something. And so where we are starting today is with Sphere, and Sphere is integrating, you know, Immutable Order Book, including the Immutable Passport. And I think those two in particular really are beneficial for the gamer experience that I just was talking about. So say on the Passport side, you now have a really easy way to connect and interact with your NFTs in the games, across the games, transfer them, etc. Whereas on the Order Book side, you don't have to be, you know, jumping across different marketplaces all the time. No, you can do this all in one place and combine that liquidity, if you will, to have the good experience for the gamers.

• 23:40Speaker 02

  And for us, the exciting part on that end is that we want to take that partially in the games for the studios that want to do that. And if they want to keep their, you know, maybe on their own custom domain, maybe on a general domain, interact with those products that Immutable offers, and we can, you know, display that in a really nice NFT marketplace that is 100% focused on gaming, allows the studios to customize their pages, tell lore, show gameplay, and really bring the NFTs to life. I think that those, you know, two sides just really complement each other. And so, yeah, I think, again, this is the start of the products that we're really excited to use from Immutable, CKAVM as well, just makes sense. So yeah, we'll see where it goes from there.

• 24:22David Hoffman?

  Okay, so Marco is really interested in the passport from Immutable, which I know is one of the subjects of our podcast a while ago, Robbie. But Robbie, same question to you about Merit Circle. What, since we're talking about modularizing development, allowing people to specialize and narrow their focus so they can do what they do best. What is Merit Circle bringing to the Immutable ecosystem that really excites you?

• 24:43Speaker 01

  Yeah, a couple of things. I think on the infrastructure side, marketplace, primary sales, infrastructure, things where they can truly improve the end user experience. I think there's a ton to be done there. The Sphere Marketplace is exceptional, but more importantly, I think that just that when we met the team, we were very impressed by execution capabilities, focus on gaming, understanding of gaming. And then, of course, I think the treasury is enormous and represents a good ability for us to go win deals collectively and together and to sort of help invest in it and stoke the web3 gaming ecosystem together. And on Immutable side, you know, we have a quarter billion dollars across a balance sheet in the foundation, obviously, a large foundation we're working with IMX, roughly,

• 25:26Speaker 01

  I think 1.5 billion we hadn't spent in IMX. So there's just this enormous opportunity and obviously Merit Circle's actually DAO is much larger in their native currency, where we can have this incredible joint value proposition to gamers. So I'd say on infra, it's trading infra and the funding that we're able to provide to games together. But overall, we just see this as a team we can long-term align with and partner with and help build sort of joint products and infrastructure.

• 25:55David Hoffman?

  Marco, I want to double click on that treasury. So $100 million, largest non-native treasury in the industry. Can you talk about, and non-native as in like not the native token? You guys just didn't mint a token because anyone can mint a token and produce $100 million. It's not that hard. So where did that treasury come from? And is now that treasury being focused into the Immutable gaming ecosystem? Or like, what's the story with that? How does that a piece of this puzzle?

• 26:20Speaker 02

  Very good question. Yeah, I mean, the treasury came alive through the DAO in the beginning on we, as we introduced, or basically as the DAO introduced, I should say. The MC token, a public LBP was held and so people had basically through Dutch auction.

• 26:34David Hoffman?

  LBP, liquidity balancing pool from.

• 26:36Speaker 02

  Bootstrapping pool.

• 26:38David Hoffman?

  Bootstrapping pool, right, which is a way to issue the token into the ecosystem.

• 26:42Speaker 02

  Exactly.

• 26:42David Hoffman?

  Have like stables come in usually.

• 26:44Speaker 02

  Exactly, and it was through a Dutch auction style race, I would say, with which DAO executed on. And so when that happened, I mean, it was around the peak of the gaming, right, back in 2021. And so we were again very lucky with the timing, but we had a really clear vision. What do we want to do with this treasury? And so from the beginning on, as we had that treasury to work with, which was around 100 million as well back then, we started investing in different titles across the industry. So we have invested to date in over 50 or 60 different game studios. To some, you know, we, for some, we're more of a passive investor, I would say, but with the majority of them, we're working very closely with them to see, you know, when their game goes live, we can actually work with them. And there's a challenge there.

• 27:28Speaker 02

  As far as investing goes nowadays, I mean, we have been a little bit slower on the investment side nowadays because we've seen, you know, more challenges in terms of, you know, who's leading around and whatnot. But nowadays, you know, since I would say the last one especially, we're seeing more action there again. And for us, we're really betting on founder teams and studios that we want to work with because we believe they actually have what it takes to build a proper game. And like I said earlier, a lot of games are building an immutable ecosystem. And we are again chainic, not stick, but yeah, if we see really great games building on immutable, then why wouldn't we want to work with them to see if we can do something together on those sides? So yeah, I definitely expect that we will be investing in those games. And I'm very excited to see which ones that are going to be.

• 28:13David Hoffman?

  So Merit Circle, you guys have games inside of your ecosystem as well? You guys have your own internal games, is that right?

• 28:21Speaker 02

  That's a, yeah, I mean, I mentioned really in the beginning of the episode, I mentioned, you know, we have some partners to the approach that we work with. We have, I would say, a couple of projects that we work really closely with, where we got the insight in the kitchen. We do the weekly meetups and whatnot to see actually what's going on. But one of the things that we've recently announced and been talking about is a studio that we co-launched, Studio Vermillion, that's building a game called Forgotten Playland. And so, yeah, we are building our own title, which is a party-style game with different mini-games that I think a lot of people are going to enjoy. And basically, what's really cool about that, too, is that we don't just get to talk to game studios, to see what their experience is, what they're going through, and what might be beneficial for them, what are challenges.

• 29:06Speaker 02

  We actually get to live through it by how closely we work with those couple of studios, and now developing our own titles as well. So, yeah, that's very, very interesting, very exciting, definitely a lot of learning lessons.

• 29:18David Hoffman?

  And there are also games being built on top of Beam, right? Like the gaming tech stack as well?

• 29:23Speaker 02

  Yeah.

• 29:24David Hoffman?

  And that's outside of what Merit Circle is developing. External developers are just using Beam?

• 29:28Speaker 02

  Yeah, exactly. Yeah, external game studios are building on Beam as well. They're using the tech stack, and that's basically how it goes.

• 29:35David Hoffman?

  Okay, so if there are some Web3 gamers listening to this, and they're like, "Ooh, I want to go play some games," what games would you recommend them go play?

• 29:42Speaker 02

  That's a good question. I think one title that in particular I am very excited about that we'll be building on Beam is Trial Extreme. And Trial Extreme is a bike racing game, casual mobile game, that maybe you've played it yourself back in the day. You have to clear a track on your mobile with like looping somewhat, and it's really fun to play. I think a lot of people will know it because they have over 115 million users across their different Web3 titles. It's performed really well, and they're coming with Web3.

• 30:09David Hoffman?

  That's a very large number. I'm not used to that large of a number of users in crypto.

• 30:13Speaker 02

  Yeah, it is, it is. And that's why I'm excited. And the cool thing here, too, is that their Web3 title, I mean, they have had two phases right now for early access. I think their next phase is coming out in Q1, if I'm correct, but I'm not entirely sure just yet there. But the game is really fun to play, and that's to me, you know, I said to Robbie earlier on a call that I've been playing in the evening mobile games because I want to take a break from the bigger screen in the evening after I've been working all day. And I found myself play different mobile games that were Web3 titles without necessarily caring. That they are a web three. It's just because I really enjoy the game. So that's one that I'm really excited about. I think another one that I'm excited about, which is a little bit different kind of game. It's a fitness moving app called Amino.

• 30:58Speaker 02

  Is the reason why I'm excited about that one is because they have actually announced a partnership with San Francisco Forty Niners. They've announced one with Allo Moves, which is a massive yoga, digital yoga studio, basically. And they're taking this whole experience in the hands of people that have not, you know, worked with blockchain technology before, not with cryptocurrency before. They don't necessarily care about that technology, but Amino puts it in a way that actually does enhance the user experience. And what's cool there with the, you know, San Francisco Forty Niners and whatnot is they have those videos popping up in their stadium. And you're actually seeing something, real life action there.

• 31:36Speaker 02

  And they've only recently released, and the last time I spoke with them, they had over two million registered users, over a hundred fifty K daily active users. And for what, three? Those are big numbers. And, you know, those are just two examples of what ones are coming out right now. I think if anyone wants to actually try out games, I would say join our Discord or we also have, you know, the gaming hub where you can see which games are live. There's, I think, right now fifteen plus games that we have announced that are building on the Beam tech stack. I mean, we've only recently started to pitch it and studios are seeing it in action. I think it's going to be easier to tell the story of what we actually are building. It's easier than when you're still, you know, developing it all.

• 32:19Speaker 02

  Um, I think there too, you know, we're going to see a lot of games coming into action throughout this month, throughout Q one. And I think for gamers, it's only going to be more fun from here.

• 32:29David Hoffman?

  So there's, there's pre-existing games, pre-existing gaming infra called Beam. Is there like, uh, technical challenges with a migration to Immutable? Uh, how, what, what does that lift look like?

• 32:42Speaker 02

  I think overall, there shouldn't be really struggles there. I think for us with the tech stack, I mean, it's in the form of an SDK. And so it's kind of like a plug and play. Like, we want to hold the hands of the developers to see, you know, which of the products that we offer, do you maybe want to use? What are you looking for? Do you want to customize things? Like I said, maybe they want to use Sphere, for example, just a general smear market in their, you know, on the browser. Maybe they want to host a customized version on their own domain. Maybe one day want to take that in the game. I think what that's going to look like with Immutable, I mean, the developers are hard at work, I would say, to get all of this into action. And so we'll get to see this all live, hopefully soon. But I think-

• 33:23Speaker 01

  And I think one of the coolest things there, Marco, is that Global Waterbook means you can be trading assets on any embedded marketplace, custom marketplace, or the Sphere marketplace, and the liquidity is shared between all three. And you can have enforceable royalties assigned to the game creators of assets that can never be routed around, which is something we're very passionate about.

• 33:42David Hoffman?

  Okay, is this, is this making Immutable a little bit more of a multi-chain? I know, like, Polygon, I'm about to get out of my ski tips in terms of technical capacity here, but I know Polygon really had that announcement recently with near, near data availability, doing cross-chain composability. Is this making Immutable a multi-ecosystem gaming infra? Or how can I think about this?

• 34:01Speaker 01

  Look, we've, we've always been, obviously, chain agnostic in terms of where we're, we're building, but right now we're focused on Immutable ZK AVN and other, you know, Immutable rollups, where we have cross-rollup liquidity, all supported on that same underlying CK stack. And the benefit there is a shared security model, which means you can actually have proper atomic composability between trades across rollups without having the weakest link problem. The Global Waterbook means you can have atomic settlement, and the Passbot means you can have invisible end-user experience. So, of course, but our focus really is building out this ZK ecosystem over the next year.

• 34:37David Hoffman?

  Okay. So pivoting to a harder question here. Previously, in this industry, there's been a history of pay us X millions of dollars to build on our ecosystem. Has any money changed hands to produce this partnership?

• 34:51Speaker 02

  No, no, it's not about money. I'll start there. I mean, for us, I mean, what Robbie mentioned in the beginning, you have on one hand, you have Merit Circle being the biggest gaming now. On the other hand, you have Immortal being the biggest web free gaming ecosystem and gaming platform. You have Polygon under the hood, as Robbie would call it. I think it's just an example of us really wanting to come in strong and, like I said, having the same vision and, you know, finding value together to help those games to us coming on board. So, yeah, I think, you know, it's not about money again. I mean, obviously, both sides will put in the resources needed to make this happen on the development side and on the investment side. And, uh, yeah, I'm super excited about that.

• 35:33Speaker 01

  And David, I'll say here, there's a room for those kinds of deals. Of course, the reason why every blockchain has war chest on the tokens is at some point it's necessary. If you don't have a token, you're not going to be able to meaningfully gain market share. But I think the most interesting deals, the most significant deals are one where it's just a win-win for the two teams and companies to operate in the same direction. And that also resolves a lot of consumer differences and consumer difficulties. Because ultimately partnerships are just stitched together via financial incentives. Gain a win, they're not actually that meaningful often because they don't represent the core. Like, a deal ultimately comes down to, to the core business drivers of both teams, like, benefit from working together is one plus one equals three. One plus one was equal to 10 with the Polygon partnership.

• 36:18Speaker 01

  Uh, and it's, sometimes it's hard to describe because the space is so used to saying, oh, like, X announces Y. And it's pretty meaningless and it's often funded. Uh, but I think this is another example of when, when we, you know, share these details, we want to be super transparent about this is why we're pulling this. This is what the impact we think it's going to have. Uh, and I'll, I'll use this moment to spruik. Uh, whenever we recommend a grant to the foundation, we give it to Games. We underwrite those grants, okay? They don't just get given it to sell. They have to achieve volume milestones in order to earn out those grants. And the reason that's so meaningful is obviously Games are optimistic and it means we can sort of reward and align incentives, but it also means that the Games like it because they know the value of this is being protected.

• 37:02Speaker 01

  It's not getting dumped on market with every, you know, game or grant. And we're so efficient at that at the moment that out of 20%, we've allocated out of the whole 55% from the foundation. In order for this to be earned out, $12 billion of protocol volume has to be achieved, which is a quarter billion dollars of fees, which makes us the third highest grossing protocol by utility in the entire space after Ethereum. And so, I mean, that's the level of efficiency and rigor with which we sort of approach that rather than just, oh, let's, you know, nuke the supply through grants and have some short-term wins.

• 37:33David Hoffman?

  Okay, so what does this partnership look like moving forward? So how does collaboration look like? What are you guys going to be able to reorient your focus on? Like, what's the shared vision here? Robbie, you want to start with this one?

• 37:45Speaker 01

  I think the shared vision should be when gamers choose a place to build, when they choose a place to trade, when they choose the ecosystem that they want to be distributing with and launching with, it's a pretty easy trust. And I think that the Sphere Marketplace plus Beam infrastructure, plus the merit circle funding and ecosystem overall, it's going to be a huge addition of value proposition to gamers choosing to build on immutable TKAVN. I think there's a ton of stuff we can build within that. I'm really excited about developing, you know, more primitives for trading, especially around, you know, how do you have metadata trading and unified liquidity for types of NFT assets? I think this is where some of the deep progress over NFT liquidity over the next year can

• 38:27Speaker 01

  come, as well as how do we just develop this, you know, exceptional operating rhythm of jointly investing, funding games collectively and sort of helping them to be successful. So Marco, I don't know if you want to add anything on and maybe on the, you know, the gaming SDKs or marketplaces or white label content as well.

• 38:48Speaker 02

  Yeah, I think that's a, that's a good question. I mean, in essence, you've shared the base, the baseline. I think the other side of it is that I spoke about is, you know, I mean, in middle polygon, you've guys have already kind of proven yourself. You have strong foundations here to build for web three gaming. I think one of the experiences that we're still missing in the web three in general is, like I said, simplifying things for gamers and for game studios to actually start working with this stack or actually start seeing the benefits from it in the games directly. And I think in that shared vision too, you know, making it easier through the order book, through your passport, through the sphere marketplace by really educating people about, you know, you're not just buying an NFT on a plain white marketplace. No, you actually get a customized experience that tells you this is what the game is about.

• 39:32Speaker 02

  And, you know, really stupid example, if you have a sword that came from a boss and you wanna know what boss came it from, when it was sent, is, for example, the first sword that ever came into the game. Those are the kind of things that we're looking at. And so I think, yeah, in that vision, we just wanna make it cooler for gamers, easier for game studios to work with this stack. And I think that, you know, we're hardly under the way right now, on the way, sorry. But, you know, I do have a really good feeling for how it's going and what we're doing together. It's the right direction to move, so, yeah, super excited.

• 40:08David Hoffman?

  What will Merit Circle's ongoing relationship with Avalanche look like? We haven't really talked about that much, but, you know, migration implies coming from somewhere. So what does the ongoing relationship with Avalanche sound like?

• 40:20Speaker 02

  Yeah, I mean, the relationship with the Avalanche folks have been great. I really enjoyed working together as a team and we will enjoy continuing to work with them. Because this immutable collaboration is an addition to what we already have there. I really wanna put that emphasis there. It's an addition to what we already have there. And like I said, we are chain agnostic and the BMS DK is chain agnostic. So we go where the gamers and where the games are. And we've, again, will continue to build on the Avalanche ecosystem. But I also said immutable polygon, they have tons of games, there are gamers, and we wanna work together with them also on that side to really do something together. And again, I think here, the common grounds are very simple. We wanna build something that caters to those gamers and game studios.

• 41:04Speaker 02

  And turn is bigger than the ecosystem it is right now. And immutable stack on that side, on the ZK FEM is very strong positioned for that. So, yeah, I'm really excited about that. And right now, we are fully focused on the Avalanche side, we're fully focused on the immutable side. We'll keep it there. Maybe there will be other changes in the future, but we're keeping it here right now and are very excited about that.

• 41:27David Hoffman?

  Well, Marco, Robbie, this has been extremely exciting. Robbie, I mean, you know my story with this. I got started earning some of my first little bits of ETH playing God's Unchained way back when, when the UX was horrendously clunky with a meta mask inside of a game and watching the progress of gaming in Ethereum more or less develop exactly as predicted, especially with last bull market. It's like, oh, Web 3 gaming is going to be a thing. Everyone got really excited about it. Then everyone realized that we needed a few years to build out games because that's how long building games take. And then now this week, we are starting to see some like really sprouts come out of the ground out of that, those investments that we made a few years ago. So the arc of crypto gaming is alive and well. And thank you guys for being big pioneers in it

• 42:12David Hoffman?

  as well and coming on and sharing this cool announcement with the Bankless Nation.

• 42:14Speaker 02

  Game five summer.

• 42:15David Hoffman?

  Game five summer. All right, going into winter.

• 42:18Speaker 02

  Going in strong, yeah. Australian summer.

• 42:21David Hoffman?

  Australian summer, yeah.

• 42:23Speaker 02

  Winter here, but we'll go for this for you in summer five, if you think that's a better one.

• 42:28David Hoffman?

  There's always a summer somewhere. Robbie, Marco, thank you guys so much for coming on the show today.

• 42:32Speaker 02

  Yeah, thank you for the invitation. Thanks, Marco. Have a great day. Thank you.

• 42:34David Hoffman?

  Bankless Nation, you guys know the deal. Crypto is risky, DeFi is risky, gaming is probably risky now that it has crypto in it too. You know the deal. We are headed west. We're going to game along the way. This is the frontier. It's not for everyone, but we are glad you're with us on the Bankless journey. Thanks a lot.