DraftKings signs up real NFL players to use in ‘gamified NFT collections’ next season

Richard Lawler is a senior editor covering tech, culture, policy, and entertainment. He joined The Verge in 2021 after covering news at Engadget for several years.

December 12, 2021, 2:00 PM UTC

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Cornerback Stephon Gilmore (24) stretches during a New England Patriots practice in Foxborough, Massachusetts, on October 22, 2020. Photo: Barry Chin/The Boston Globe via Getty Images

Just look at the negative reactions to Ubisoft's NFT game announcement and the number of people who laughed out loud with Keanu Reeves to see that reactions to non-fungal tokens range from disbelief to disgust. But that hasn't stopped DraftKings and the NFL Players Association from signing a new deal for a "gamified NFT collaboration." The sports betting company plans to launch the collection in the 2022-2023 season.

Details on how it will operate are unclear. According to a press release, it will be a combination of buying and trading, like NBA Top Shot or NFL All Day, plus the registered owner of the NFTs will be able to use the collection like many trading card-based games.

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Initial features for DraftKings' gamified NFL player NFTs will include the ability for customers to use these collectibles in-game with others on the platform, as well as the ability to buy and sell them individually. NFTs are expected to come in various editions and tiers, incorporating various aspects of utility and digital scarcity, all of which will be provided by Polygon. DraftKings previously announced a strategic agreement with Polygon to provide a scalable, eco-friendly blockchain solution that allows for increased processing power, lower transaction fees and expanded functionality.

What’s an NFT?

NFTs allow users to buy and sell ownership of unique digital items and track their owners using the blockchain. NFT stands for "non-fungible token" and can technically include any digital item, such as a drawing, animated GIF, song or video game item. An NFT can be a one-of-a-kind, like a real-life painting, or one of many copies, like a trading card, but the blockchain tracks who owns the file.

Some NFTs are awarded for millions of dollars, and famous men, such as Nyan Cat and Deal with IT sunglasses, have been exhibited at an auction. There are many discussions on the huge amount of power and the impact on the environment of NFT. If you still have any questions, please read the NFT FAQ.

One of the different advantages of NFT's collaboration is that it is already operated in a world where money is already focused. Measure the risks of gambling to the seemingly ridiculous speculation and at first glance is that people are already there. Magic: There is a strange similarity with the rise of the Bitcoin Exchange Mt. gox, which began as a website that trades the Gathering online cards like stocks.

The NFL team is already trying to find the future in the NFT, and is trying to incorporate NFL in NFL All Day Market Place built by some games and Dapper Labs. NFL All Day started a closed beta on Thursday, and despite the fact that the functions such as money, purchase, transactions, etc. are not yet supported, about scammers and bots who want to raise money from members with highlights. It has already warned. As a union that represents the players, this contract on names, images, and portrait rights is only another way to enter the "new scenery of digital entertainment that creates excitement between players and fans". 。

All three founders of DRAFTKINGS seem to wear BORED APE YACHT CLUB avatars (not likely to own the ownership on blockchain) on Twitter, and pay attention as a potential market. It is clear that you are. "The money we earn with cipher is insignificant," tweeted on December 1, c o-founder Jason Robins.

In the press release that announced this transaction, DRAFTKINGS Marketplace's product operations, Senior Vise President Beth Bierigar, "Sports and NFT, the foundation of engagement and entertainment on the web3," Organizations other than Draftkings. There are few places where facilities are in place to use the increase in intersections. " Vierigar continued as follows in a statement in the Forbes magazine. A partnership with NFLPA enables great IP to this new technology.

The company also has a strong motivation to find a new market and the current base. A few years ago, some speculators have doubted the company's business model and lon g-term prospects, despite overcoming several attempts to ban the daily fantasy. One of the short selling streaks called the company "significantly" last week because it spent a lot of money on marketing to promote growth. Draft Kings's stock prices are currently trading for around $ 30, less than half the peak of $ 74, which promised three founders to have a basic salary of $ 1 in March (PDF).

The collection will be released on the DRAFTKINGS marketplace, but it is not yet known when the details of the actual game will be released. There are some NFT game projects like Axie Infinity. However, a considerable percentage of the playe r-based is composed of people without a Philippine bank account. Nevertheless, it is not surprising that online bookmakers will challenge NFT to take the lead in the new field, as the ESPN under Disney is looking for the entry into sports betting.

Court Declines To Dismiss Securities Class Action Alleging That DraftKings NFTs Are ‘Securities’

Securities litigation due to digital products such as cryptocurrencies, NFT (NON-FUNGIBLE TOKENS), and security tokens have increased rapidly in recent years. The problem in these litigation is whether the purchased digital product is a "securities" that is subject to the Federal Securities Law and the State Securities Law.

On July 2, 2024, Judge Denies Casper of the Massachusetts Court of Massachusetts is a DUFOE vs. Draftkings, Inc. Litigation, plaintiffs are investment agreements for DRAFTKINGS NFT, so the Federal Supreme Court shown in Howey. He has fully argued that it is a "securities" based on important tests.

The Federal District Court has the following points as the basis for this decision:

• (i) Draftkings is said to have pooled assets by reinvesting the revenue obtained from NFT's sales in the NFT business, and (II) NFT buyers are online "Market Place" on which DRAFTKINGS trades NFT. It is alleged that profits and risks were shared because of dominance.
• Based on the promotional complaint of DRAFTKINGS for investment prospects presented by NFTS, it is said that the value of NFTS depended on the success of DRAFTKINGS's "Market Place", so "rationally gaining profits from others' efforts. Expectation.

Dufoe marks the second case in which the court has addressed whether sales of NFTs constitute securities under the Howey Act. In 2023, Judge Victor Marrero of the U. S. District Court for the Southern District of New York held in Friel v. Dapper Labs, Inc. that the complaint properly alleges that the National Basketball Association's (NBA) sale of Top Shot Moments NFTs constitutes an investment contract. The Friel court acknowledged that this conclusion was a "close call."

While Dufoe and Friel provide a framework for analyzing NFT transactions under Howey, neither ruling predicts the outcome in future cases, or even in cases that come before the court with a complete factual record. 1 Instead, both courts have made clear that their holdings are narrowly fact-dependent and subject to the specific claims that may be challenged at summary judgment or trial.

Background

DraftKings is a digital sports entertainment and gaming company. In August 2021, DraftKings began selling NFTs through the DraftKings Marketplace, an online platform owned and operated by DraftKings. In February 2022, DraftKings began selling so-called "gamified NFTs." Owners of gamified NFTs could use their NFTs in "Reignmakers" contests to win cash prizes. DraftKings NFTs were minted on the Polygon blockchain, which exists independently of DraftKings.

Owners of DraftKings NFTs can resell their NFTs on the DraftKings Marketplace. They can also sell NFTs outside of the Marketplace. However, to sell an NFT outside of the Marketplace, the NFT must first be transferred from the Marketplace to the owner's digital wallet, and DraftKings had "sole discretion" to allow or prohibit such transfers.

DraftKings allegedly promoted the NFTs through online chat rooms, social media, and other channels.

Plaintiffs, purported purchasers of DraftKings NFTs, filed suit against DraftKings and several of its officers, alleging that (i) DraftKings NFTs are unregistered securities and (ii) the defendants operated an unregistered securities exchange. Plaintiffs allege violations of Sections 5, 12(a)(1), and 15 of the Securities Act of 1933, Sections 5, 15(a)(1), 20, and 29(b) of the Securities Exchange Act of 1934, and Sections 110A, 201(a), and 301 of the Massachusetts General Laws.

The Court’s Decision

The defendant claimed that the Draftkings NFTS was not a "securities" that is subject to Federal Securities or Massachusetts Securities Law. The court has rejected the claim and determined that the plaintiff has fully argued that the Draftkings NFTS was a "securities" under the direction of the complaint.

The court applies standards established in Howey more than 75 years ago to evaluate whether a transaction falls under an investment contract, and eventually falling under the Federal Securities Law and the "Securities". did. According to Howey, investment contracts are (i) "investing funds" (II) "Investing in common businesses" (III) (III) "Profit is expected only by the efforts of advertising or third parties". It is established.

The defendant did not contest the first element, "investment of money." The court determined that plaintiffs have fully asserted the facts that support the remaining two elements:

Common company. Plaintiffs can claim common companies by pooling "horizontal commonality", or share corporate interests and risks. In contrast to other digital products in other forms, NFT is clear that "NFT is a defined or unique or not fangible, so risk and profits are shared by all investors. Not, I admitted. Nevertheless, the court has determined that the plaintiff has fully argued that all of the purchasers of DRAFTKINGS NFT have shared the risks and profits of "companies." The court argued that Draftkings has reinvested the profits obtained by the sale of NFT, including the purpose of promoting marketplace sales managed by NFT trading by NFT. In addition, the value of NFT is said to be dependent on the marketplace. The court states: "If DRAFTKINGS shut down the marketplace or lose interest in marketplace, the value of NFTS will be zero.

A reasonable expectation of gaining profit only from the efforts of others. In order to assert the rational expectations of profits only by others' efforts, plaintiffs must claim the fact that they support two independent requirements. < SPAN> The defendant has filed a complete rejection of the complaint, saying that Draftkings NFTS is not a "securities" that is subject to the Federal Securities Law or Massachusetts Securities Law. The court has rejected the claim and determined that the plaintiff has fully argued that the Draftkings NFTS was a "securities" under the direction of the complaint.

The court applies standards established in Howey more than 75 years ago to evaluate whether a transaction falls under an investment contract, and eventually falling under the Federal Securities Law and the "Securities". did. According to Howey, investment contracts are (i), (II), investing in common businesses, (III), and "III can expect profits only by the efforts of advertising or third parties". It is established.

The defendant did not contest the first element, "investment of money." The court determined that plaintiffs have fully asserted the facts that support the remaining two elements:

Practical Implications

Common company. Plaintiffs can claim common companies by pooling "horizontal commonality", or share corporate interests and risks. In contrast to other digital products in other forms, NFT is clear that "NFT is a defined or unique or not fangible, so risk and profits are shared by all investors. Not, I admitted. Nevertheless, the court has determined that the plaintiff has fully argued that all of the purchasers of DRAFTKINGS NFT have shared the risks and profits of "companies." The court argued that Draftkings has reinvested the profits obtained by the sale of NFT, including the purpose of promoting marketplace sales managed by NFT trading by NFT. In addition, the value of NFT is said to be dependent on the marketplace. The court states: "If DRAFTKINGS shut down the marketplace or lose interest in marketplace, the value of NFTS will be zero.

A reasonable expectation of gaining profit only from the efforts of others. In order to assert the rational expectations of profits only by others' efforts, plaintiffs must claim the fact that they support two independent requirements. The defendant claimed that the Draftkings NFTS was not a "securities" that is subject to Federal Securities or Massachusetts Securities Law. The court has rejected the claim and determined that the plaintiff has fully argued that the Draftkings NFTS was a "securities" under the direction of the complaint.

The court applies standards established in Howey more than 75 years ago to evaluate whether a transaction falls under an investment contract, and eventually falling under the Federal Securities Law and the "Securities". did. According to Howey, investment contracts are (i) "investing funds" (II) "Investing in common businesses" (III) (III) "Profit is expected only by the efforts of advertising or third parties". It is established.

The defendant did not contest the first element, "investment of money." The court determined that plaintiffs have fully asserted the facts that support the remaining two elements:

Common company. Plaintiffs can claim common companies by pooling "horizontal commonality", or share corporate interests and risks. In contrast to other digital products in other forms, NFT is clear that "NFT is a defined or unique or not fangible, so risk and profits are shared by all investors. Not, I admitted. Nevertheless, the court has determined that the plaintiff has fully argued that all of the purchasers of DRAFTKINGS NFT have shared the risks and profits of "companies." The court argued that Draftkings has reinvested the profits obtained by the sale of NFT, including the purpose of promoting marketplace sales managed by NFT trading by NFT. In addition, the value of NFT is said to be dependent on the marketplace. The court states: "If DRAFTKINGS shut down the marketplace or lose interest in marketplace, the value of NFTS will be zero.

• A reasonable expectation of gaining profit only from the efforts of others. In order to assert the rational expectations of profits only by others, plaintiffs must claim the fact that they support two independent requirements.
• First, the plaintiff must assert rational expectations for profits. The court has determined that the plaintiff has met this standard based on a statement on DRAFTKINGS and individual defendants NFTS. These statements have declared, for example, the details of the transaction history of DRAFTKINGS NFTS, the news about the "maximum rising and descending person" in the marketplace, and the buyer declared that it will "maintain the public market profit of your card." Included. The court also rely on claims that the general public had considered the draft kings NFT as an investment in the chat room, comparing the marketplace to the stock market and discussing how to make money with draft kings NFT transactions. 。
• Second, plaintiffs must argue that the buyer's interest expectations are dependent on others' efforts. The court acknowledged the plaintiffs claiming that NFTS was not cast on the Draftkings unique blockchain, but NFTS was dependent on the success of the marketplace and, of which he was DRAFTKINGS's success. The court said, "The user has withdrawn NFT from the Draftkings system, never puts it in his wallet, and probably couldn't do it. In addition, Draftkings has paid a great deal of effort to spread the marketplace and NFTS. It will be done.
• Defendant Dapper Labs was claimed that the NBA Top Shot Moments NFT manages "Flow Blockchain". The claim was the core of the court's judgment that plaintiffs have fully asserted the rational expectations for the horizontal commonality and the efforts of others.

In contrast, DraftKings NFTS was traded on Polygon blockchain, which is "independent of DraftKings" and not managed by Draftkings. This is the difference in the purpose of Howey, as the DUFOE court claimed that the plaintiffs were all made through marketplace and draftKings could prohibit transactions outside the marketplace at their own discretion. It was a distinction.

DUFOE and Friel are not the last decisions on whether NFT sales fall under securities and trading laws. All are the Federal District Court ruling. In addition, the two rulings are based on a cas e-specific claim that may be rejected in the brief judgments and trials.

The NFT Game That’s Almost 5% of DraftKings’ Earnings

In fact, Duffoe's ruling states that "it is not necessary to judge whether all NFT transactions should be considered an investment contract." Rather, the court said, "DUFOE only evaluated whether DRAFTKINGS's NFT in Market Place is a securities." The FRIEL court, similarly, linked the decision to the fact that it was filed, and pointed out that each NFT project must be evaluated on a cas e-b y-case basis.

TLDR:

• Duffoe also listed a de facto issue that could not be solved at the argument stage, as in the defendant's claim, and could change the analysis of Howey if there was a sufficient record of facts:
• DraftKings has confused NFT's funding with "other huge revenue" and overturned the plaintiff's claim that there was enough asset pooling to prove horizontal commonality.
• DRAFTKINGS's NFT prices do not move in conjunction, rely on other factors specific to specific NFTs, and all users share the risks and profits of companies that provide horizontal commonality. He denied the plaintiff's claim. In the court, "in the latter half of the lawsuit, Draft Kings will make a profit or loss in relation to other buyers' fortune, and deny horizontal commonality. Will have the opportunity to submit. "
• The user did not actually dominate the NFT primary and secondary markets, as the users were able to trade outside of the marketplace.
• The plaintiff's expectations were unreasonable, or were motivated by consumer intentions (for example, participating in the ReignMakers contest). The court claims that draftKings has reduced the price of NFT over time, which is inconsistent with profits, and that the complaint is "at least a consumer motivation and speculative motivation by NFT buyers." I admitted that I was doing it. However, the court concluded that "these questions are not suitable for resolution by rejection, so that plausible inferences are all (plaintiffs)."

Intro

1. The Friel case concluded a settlement agreement before the disclosure of evidence and the briefing of the brief trials ended. The settlement requires the final court approval.

What is Reignmakers?

This memorandum is provided by Skadden, Arps, Slate, Meagher & Amp; Flom LLP and its affiliates only for education and information, and is not intended for legal advice, but also legal advice and interpreted. It is not something to be done. This memorandum is considered an advertisement under the state law applied.~Draftking's REignmakers is a NFT game on Polygon, which will generate $ 70m high profits over the next year, and increase profits by 5%compared to the 2022 level.

Industry Data

In the next four quarters, Draftking's REignMakers franchise (Polygon NF T-based fantasy sports game) accounts for 3 % of the Top line of DRAFTKING, 5 % of the ful l-year income of 2022 or more, and is more than 70 million dollars. I guess you can create.~The first year's NFL, PGA, and UFC Rainmakers games bring a total of $ 52 million to draft kings, which is equivalent to 2 % of the DKNG top line during the same period.~Draft Kings Rainmakers announced the 2023 NFL Collection on August 8 and celebrated its second year.

U.S. Online Sports Betting Gross Gaming Revenue

The success of ReignMakers has indicated the benefits of minimizing the blockchain components in the game, and developers can target more audiences while optimizing economic factors such as marketplace fees. 。

Draft Kings strategically prioritized fantasy sports and utilized the passion of existing users to improve the fun of games and the interests of users without creating a larg e-scale IP.

While enthusiastic fans and developers were eager to fuse the blockchain technology and games, the first result has left many questions about its feasibility. Concerns over the complexity of scalability, user experience, and blockchain integration have been shadowed by the success of the Web3 games. However, in such an unclear atmosphere, Draft Kings Rhine Makers has not only overcome these challenges but also redefine the path to success. DRAFTKINGS, which has more than 2 million paid customers every month, uses the platform to make sports betors and eager fantasy sports fans more efficient into seasonal REignmakers game products. Draftkings has made the company's new NF T-compatible fantasy sports games very easy to increase by eliminating the direct exchange with the blockchain.

Sports NFTs Represent 50% of Top 6 Collections by 30 Day Sales

Reignmakers by Draftkings uses NFT on Polygon blockchain to fuse card collection and fantasy sports. The Draftkings website provides information about what NFT is and how to send it to the Web3 wallet, but advertising does not mention blockchain, NFT, or other cipher terms. Cards should be purchased or obtained from Draftkings Marketplace, creating a lineup of players and competing for rewards. The NFL version of the Reignmakers surpasses the UFC and PGA version with a consistent schedule and a wide range of card selections, nurturing a variety of contests and eager user base. All payments are made by credit card or debit card, or if you already have an account, and the purchase procedure is completed in a few clicks. Draft Kings provides a 2, 999. 99 card pack of $ 20 to $ 2, 99999, making money with 10 % of primary sales and marketplace transactions. Reignmakers sold about $ 170 million in the first year of the operation, rising $ 17 million. These secondary sales

NFT Marketplace Fees

It accounted for 33 % of Reignmakers's total income of the first year and about 0. 8 % of the DKNG top line during the same period.

Revenue & Impact to Top-Line

The US online sports betting (OSB) games grew from $ 500 million in 2019 to $ 6. 8 billion in 2022, indicating 139 % of CAGR. Despite such a large growth, i n-game betting remains the following penetration.

The average European market is 70-80%, while the US market has only 15 to 35%. In a bullish scenario, the penetration rate of i n-game OSB in the United States can reach 50%in the next few years.

2023 Reignmakers Revenue Estimate

It accounted for 33 % of Reignmakers's total income of the first year and about 0. 8 % of the DKNG top line during the same period.

Source Stifel Research as of January 23, 2023.~As the No. 2 player in the U. S. with over 6 million paying customers across its sportsbook, casino and daily fantasy sports, 2 DraftKings sees itself well positioned to reinvest some of its scale advantage into a new NFT-based business line. Additionally, Reignmakers contests are intentionally designed to be non-paying. Although more expensive cards allow players to enter more contests or contests with higher prize payouts, winning or losing is primarily driven by the player's knowledge of the sport and skill in successfully picking their lineup for each contest. Because of this, the user experience is not heavily influenced by the fact that casual players are less willing to spend money than power users.

Conclusion

In contrast to other games and the broader NFT market, Reignmakers benefits uniquely from an inherent value proposition for cards. Users can easily assess the value of cards that have the potential to improve their competitive performance. This intrinsic link between card utility and competitive success sets Reignmakers apart and makes it easier to understand the value of NFTs more tangibly. In particular, sports-oriented NFTs have consistently ranked high on Cryptoslam!'s NFT collectible sales rankings. Unlike games that require novel storylines to engage players, Reignmakers, Sorare, and NFL Rivals resonate with a wide audience by leveraging established sports interests. Partnering with existing, enduring IP from live sports removes the challenge of generating interest from scratch, ensuring relevance and appeal.

Source: VanEck Research, Cryptoslam! as of 8/18/23

Source: VanEck Research, Cryptoslam! as of 8/24/2023 DraftKings earns revenue from Reignmakers through both primary sales and a 10% commission on secondary transactions. This commission is higher than OpenSea and Blur's 2. 5% and 0. 5%, but the impact is mitigated by Reignmakers' features. Unlike speculative NFT assets, Reignmakers serves the dual purpose of using NFTs for competitive endeavors such as prize competitions. This sets it apart from traditional NFT trading, where speculation and profit are paramount, and forces marketplace fees to be compressed. This difference in utility means that marketplace fees are not as high, as the focus is on enhancing the competitiveness of fantasy teams. In addition, the REIGNMAKERS design is not for individuals who are familiar with cipher, but for mainstream sports enthusiasts. With this strategic collaboration, Draft Kings has built a platform targeting 63 million global fantasy sports players, and has been able to avoid competition with the NFT marketplace, which is lo w-cost o n-fin. This approach is in contrast to 5 million o n-ene users targeting most web3 games to be targeted for too many blockchain elements.

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Source Vaneck research as of August 24, 2023.

According to our bases, from the third quarter of 2013 to the third quarter of 2014, DKNG's REignmakers franchise will generate more than $ 75 million. In our model, REIGNMAKERS sells all play action card packs in each sports and assumes that the bare/ bass/ bull scenarios will create a secondary transaction of $ 50 million/ $ 300 million/ $ 500 million. I am. DRAFTKINGS costs 10%of the secondary trading, so our bases can lead the REignMakers sales of over 3%of the DKNG top line. The data indicating the cost of this revenue cannot be accessed, but basically there is no production cost, and customer acquisition costs can be reduced by cros s-cell opportunity, so the margin is about 90 %. The base case estimates that the profits from the Rainmaker business will boost the DKNG EPS as follows.

At $ 0. 15, it is equivalent to 5 % of EPS-3. 16 in 2022. < SPAN> Furthermore, the REignmakers design is not for individuals, but for mainstream sports enthusiasts. With this strategic collaboration, Draft Kings has built a platform targeting 63 million global fantasy sports players, and has been able to avoid competition with the NFT marketplace, which is lo w-cost o n-fin. This approach is in contrast to 5 million o n-ene users targeting most web3 games to be targeted for too many blockchain elements.

Source Vaneck research as of August 24, 2023.

According to our bases, from the third quarter of 2013 to the third quarter of 2014, DKNG's REignmakers franchise will generate more than $ 75 million. In our model, REIGNMAKERS sells all play action card packs in each sports and assumes that the bare/ bass/ bull scenarios will create a secondary transaction of $ 50 million/ $ 300 million/ $ 500 million. I am. DRAFTKINGS costs 10%of the secondary trading, so our bases can lead the REignMakers sales of over 3%of the DKNG top line. The data indicating the cost of this revenue cannot be accessed, but basically there is no production cost, and customer acquisition costs can be reduced by cros s-cell opportunity, so the margin is about 90 %. The base case estimates that the profits from the Rainmaker business will boost the DKNG EPS as follows.

At $ 0. 15, it is equivalent to 5 % of EPS-3. 16 in 2022. In addition, the REIGNMAKERS design is not for individuals who are familiar with cipher, but for mainstream sports enthusiasts. With this strategic collaboration, Draft Kings has built a platform targeting 63 million global fantasy sports players, and has been able to avoid competition with the NFT marketplace, which is lo w-cost o n-fin. This approach is in contrast to 5 million o n-ene users targeting most web3 games to be targeted for too many blockchain elements.

Source Vaneck research as of August 24, 2023.

According to our bases, from the third quarter of 2013 to the third quarter of 2014, DKNG's REignmakers franchise will generate more than $ 75 million. In our model, REIGNMAKERS sells all play action card packs in each sports and assumes that the bare/ bass/ bull scenarios will create a secondary transaction of $ 50 million/ $ 300 million/ $ 500 million. I am. DRAFTKINGS costs 10%of the secondary trading, so our bases can lead the REignMakers sales of over 3%of the DKNG top line. The data indicating the cost of this revenue cannot be accessed, but basically there is no production cost, and customer acquisition costs can be reduced by cros s-cell opportunity, so the margin is about 90 %. The base case estimates that the profit from the Rainmaker business will boost the DKNG EPS as follows.

At $ 0. 15, it is equivalent to 5 % of EPS-3. 16 in 2022.

While Reignmakers doesn’t fully embody the decentralized values ​​crypto enthusiasts want from Web3 games, we believe it is one step closer to finding a happy medium for blockchain integration in games. Let’s say that Web3-enabled games continue to burden users with blockchain interactions. In that case, they are unlikely to capture a large portion of traditional gamers and will continue to appeal only to crypto users. However, if game developers focus on building Web3-integrated games for existing fanbases (such as sports) and utilize platforms where all blockchain interactions are abstracted away, Web3 games could unknowingly drive many users to on-chain. In its current form, Reignmakers is unlikely to drive significant on-chain activity due to its limited interactions with the blockchain. This ensures that the underlying technology does not complicate the user experience, and also opens the door to deeper integration with decentralized systems as user experiences on the blockchain improve. If Reignmakers were to move many of its game mechanics to the blockchain, such as requiring contest lineups to be posted on-chain before they start, this could have a significant impact on gas usage over time. To get more insights on digital assets, sign up at our subscription center.

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