Is Oasys the Oasis for Japanese Gaming Giants?

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KP Janget al 1
Head of Research/
Xangle
May 03, 2023

Translated by elcrto

Content

1. Japanese Gaming Giants Are Coming on Board

2. Why Do Game Companies Choose to Come to Oasys?

3. The Oasys Ecosystem Is Still in Its Infancy

4. Key to Success: Onboarding Big-Name IPs

 


 

1. Japanese Gaming Giants Are Coming on Board

<Leading South Korean and Japanese game companies joining the Oasys blockchain as validators | Source: Oasys><Leading South Korean and Japanese game companies joining the Oasys blockchain as validators | Source: Oasys>

Recently, there was news SoftBank will be joining the Oasys blockchain as a network validator. The Oasys blockchain—although the name may not ring a bell for many—is a layer 1 mainnet that has prominent South Korean and Japanese game companies as validators. Launched in October 2022, Oasys has stirred a lot of anticipation as many game companies in Japan, a country that used to appear standoffish to blockchain, began participating in the network directly as validators. Oasys pulled $20M worth of investments from Nexon and Galaxy Interactive through a private token sale in July 2022.

Then, what is its appeal? What renders Oasys so promising for Japanese game companies? In this publication, we'll provide you with a walkthrough of the features and properties of the blockchain, ecosystem, and outlook for the coming years.

2. Why Do Game Companies Choose to Come to Oasys?

Initially, Oasys started off as one of double jump.tokyo’s projects. Founded in 2018, double jump.tokyo is a blockchain game developer, which SEGA and Gumi Inc. invested in and collaborates with famous Japanese game companies like Bandai Namco. In 2018, double jump.tokyo’s released a web RPG game called My Crypto Heroes and ran it on Ethereum and Polygon. Reckoning that the poor user experience on Web3 limits game operation and user onboarding, it set off to an independent game-specific blockchain, Oasys. Later spun off from double jump.tokyo, Oasys launched its mainnet in October 2022.

Oasys is a consortium blockchain with a Hub-Verse ecosystem, which comprises an Ethereum fork and Optimistic rollups. The Hub layer, a fork of Ethereum, is responsible for token issuance, bridge contracts, and data availability, whereas Verse, an Optimistic rollup, handles the game's transactions. In a nutshell, Oasys has a structure where optimistic rollups are added onto the forked Ethereum chain.

What Sets It Apart: A Blockchain Tailored to Japanese Game Companies

So, what makes Oasys different and why do game companies choose it? For starters, Oasys allows game companies to build their own Verse. The Verse is a private layer 2, where gaming companies that become builders of the Verse have control over which games are onboarded, similarly to Optimism's whitelist. The benefit is that game companies get to onboard only the games that have been vetted by their Verse.

To improve user experience, transaction fees in a Verse are paid by the builders of the Verse, and the 7-day withdrawal limit was removed from the Optimistic rollups. Instead of the 7-day withdrawal limit, transactions on Verse are verified by an Appointed Verifier of each Verse.

<v-tokens unique to Oasys, which help prevent IP leaks | Source: Oasys Docs>

Lastly, vFT and vNFT on Oasys prevent leakage of intellectual properties of Japanese game companies in an open-source setting. Since Japan's IP policies demand active measures for IP protection, Japanese game companies tend to keep their IPs from exposure to public blockchains. Reflecting their needs, Oasys came up with the v-tokens that can only be used in the specific verse and are not allowed to be leaked to the Hub or other chains.


<The need for user confidence in Verse builders stated in the whitepaper | Source: Oasys Docs>

All these are possible because Oasys is a web 2.5 blockchain. As the whitepaper notes, Oasys emphasizes the importance of users’ trust in Verse builders and content providers. Oasys believes that game companies will serve their Verses best, having their reputation at stake. Such belief was reflected in the lifting of the 7-day withdrawal limit as the project assumes there will be no company willing to mount malicious acts at the cost of its reputation. Put differently, Oasys is a Web 2.5 blockchain with some compromises with decentralization.

Limitations: Centralized Architecture of Verse and Costs of Developers

There are some limitations to the design though. First, game companies may become a single point of failure for their Verses in this architecture. If there is a problem with a game company and its reputation is at risk, or if the service is no longer available in that Verse, users will no longer be assured of stability of the service.

Another limitation pertains to profitability of Verse builders. Each Verse builder must make an initial deposit of 1 million OAS to build a Verse. What’s more, they also have to pay fees for transactions that occur in their Verses on behalf of the users. While the deposit is refundable after six months of building a Verse, ongoing transaction fees represent an ongoing expense for Verse builders. Although Oasys says builders can offset the expenses with revenues from issuing their own tokens and NFTs, Verse's costly structure will likely discourage game companies from joining the Verses.

3. The Oasys Ecosystem Is Still in Its Infancy

Currently, there are only a few games available on the Oasys ecosystem. This is likely due to the closed nature of the Oasys mainnet. As I mentioned earlier, Oasys requires permission from builders of each Verse before games can be onboarded. Much like how Optimism's ecosystem was slower to bloom than Arbitrum's in its early stage, the slower growth of the Oasys ecosystem is attributable to this structure.