How Videogame about Cats Could Bring Blockchain into the Mainstream

Dapper Labs, the decentralized app (or dapp, pronounced ‘dee-app’) developer behind CryptoKitties, recently announced a $15 million funding round. Venrock, who led the round, were joined by GV (formerly Google Ventures) and Samsung NEXT. According to the press release announcing the deal, the funds “will be used to help Dapper Labs, a Canadian-founded company, expand locally and globally,” including “establishing a U.S. subsidiary led by former executives from Unity and Disney, with additional hires for the Canada office from Ubisoft, EA Sports, Amazon, ESPN, Hasbro, and Zynga.”

CryptoKitties, which is billed in the press release as the “world’s first and most successful consumer blockchain product,” is a key part of Dapper Labs’ mission “to use games and entertainment to bring the values of decentralization to billions of consumers worldwide,” says CEO Roham Gharegozlou.

The game is centered around creating, managing, and trading the titular “collectible digital art forms”, each of which is “a unique digital asset, or non-fungible token (NFT).” Blockchain is used to establish true, indisputable ownership of each cat, which can be bred within the game to create new cats with special attributes; peer-to-peer transactions to acquire new cats are facilitated by smart contracts. CryptoKitties’ smart contracts represent “the world’s most popular outside of exchanges, with over 3.2-million transactions recorded to date,” according to the press release.

Investors are betting that Dapper Labs’ game-centric approach to blockchain will be a crucial step towards widespread mainstream adoption of decentralized ledger technology. Dapps have been slow to gather users thus far, despite their considerable promise – while developers are hard at work creating decentralized alternatives to traditional apps, functionality, and consistency can be elusive between myriad glitches and operating issues. Coupled with the familiar hindrance of scaling on Ethereum (which Fortune notes results “in prohibitive transaction fees when there is an uptick of activity”), CryptoKitties hovers between 300-400 users per day – down significantly from the 14,000 daily users it boasted at its peak (not coincidentally, near the peak of 2017’s crypto boom).

The numbers remain strong for a dapp but representative of how far there is to go to reach the numbers associated with wider engagement. The fact that CryptoKitties continues to attract attention from investors (this is its second investment round, following a $12 million round in March) speaks to the belief in the potential of blockchain outside of virtual currencies. Dapper Labs will use the latest influx of capital to improve the app’s infrastructure to make it more user-friendly, in hopes of creating a similar product to the traditional app-based games that are now proven money makers. The prospect of doing so while subsequently aiding large-scale blockchain adoption remains tantalizing.

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