Ethereum Scaling Solution zkSync Launches Alpha Mainnet

Matter Labs has launched zkSync Era, its layer-2 scaling solution for Ethereum, to the public. The solution incorporates a version of roll-up technology that uses zero-knowledge cryptography, allowing for easy integration with Ethereum as it exists today.

Transactions are moved off the mainnet and onto a layer-2 network, where they are batched and compressed into a proof that is sent back to Ethereum and verified. However, despite the gates being open to permissionless onboarding, zkSync's bridge technology includes delayed withdrawals to mitigate the risk of a major security incident. Users must bridge their funds from Ethereum to zkSync using a proprietary bridge, and will instead have to wait one day to execute their withdrawals. The company is, however, relaxing this feature over the coming months.

The zkSync Era is the final step in a phased mainnet launch that began in 2019. Though Matter Labs' head of engineering, Anthony Rose, acknowledged that the launch is an alpha version of the system with more engineering work to come, he said the company had spent millions of dollars on audits, bug bounties, public contests, and private reviews.

zkSync has teamed up with security auditors OpenZeppelin, among others, and developed a sophisticated monitoring platform that watches both on-chain and off-chain activities for breaches. Rose added that nothing in crypto is foolproof, but the company had crossed a competence threshold and was ready to release zkSync Era to the public.

Crypto Wallet Prototype Hidden in Microsoft Edge

Microsoft has integrated code that would add a non-custodial crypto wallet to its Edge browser, according to screenshots shared on Twitter by Albacore, a pseudonymous software researcher. The screenshots depict a user interface for a cryptocurrency wallet, a decentralized application explorer, a news feed, and the ability to buy cryptocurrency through Coinbase and MoonPay. The enhancement is already included in recent releases of the Microsoft Edge browser, but is hidden and not accessible to users.

Albacore believes that Microsoft's foray into crypto wallets may be an attempt to offer similar products to Brave Browser, the privacy-focused browser that also provides Web3 functionality. Brave added support for the Solana blockchain in its desktop browser in May and earlier this month expanded the functionality of its self-custody wallet, allowing users to buy and sell cryptocurrency without having to leave the integrated Brave Wallet.

Microsoft has been experimenting with blockchain technology for many years. Albacore cautions that Microsoft builds and tests many features that never see the light of day. Even so, Albacore says the Edge wallet functions correctly, and a rollout is not out of the question.

Microsoft has also worked with others to move into the blockchain industry, including leading a $20m strategic round into Space and Time, a Web3 data warehouse, in September. However, Microsoft has not confirmed any aspect of its Edge crypto wallet development.

A Microsoft spokesperson said the company regularly tests new features to explore new experiences for its customers. The spokesperson added that the company looks forward to learning and collecting feedback from customers but has nothing further to share at this time.

Roblox Launches Generative AI Materials Coding Tools

Roblox, which has 12 million developers on its platform, has launched two new generative AI tools to support them. Developers can now opt-in to use AI-based material generation and coding tools. Material generation can be used to create high-quality textures to apply to objects in-game. The AI code assist allows users to create code through natural language prompts, and the tool can also automatically summarise users' code to create comments. The tools are the first to be rolled out by Roblox following the company's vision for ways that generative AI can support user-generated content (UGC).

According to Stefano Corazza, Head of Roblox Studios, the materials tool is designed for all Roblox players, including those with no coding experience. The coding tool, on the other hand, is meant for builders with some coding experience but will be valuable to both beginners and experts. Both of these tools allow greater access to the building experience and can help existing developers become more productive. Corazza said that both material generation and AI code assist are the first steps of Roblox’s goal to become a creative tool for everyone.

Roblox positions itself as the most complete and vertically integrated game development solution. Its data center, building tools, publishing platform, and marketplace to monetize content make Roblox the shortest path to making a game. AI will allow more users to create content in Roblox and iterate on their creations faster. The technology is widely used throughout the company, including moderation and translation.

AI is expected to revolutionize the gaming industry's digital tools, says Corazza. He compares the impact of AI to when the internet started, saying it is going to permeate everything. Meanwhile, generative AI is set to accelerate the pace of development, enabling creators to expand their worlds and making them even more expansive and detailed for users to explore.

Valve Announces Counter-Strike 2

Counter-Strike 2 (CS2) is a free-to-play game based on Valve's Source 2 engine, with a full release expected in the summer of 2023. The game includes updates to core mechanics, such as improved smoke grenades and "sub-tick updates," redesigned maps, better visuals, UI enhancements, reworked audio, and more. Maps will be getting a new look in CS2, with three "tiers" of maps in the game, and experienced players' skills should carry over.

A "limited test" for CS2 starts today, with users playing on Counter-Strike's Dust II map in Deathmatch and "unranked competitive matchmaking" modes. The test will be available only on Windows, and Valve will select people to join based on factors such as recent playtime on Valve's official servers, trust factor, and Steam account standing. Valve says other modes and maps will arrive in future test releases.

Valve upgraded all stock weapons with high-resolution models, and all the items collected in CS:GO will be available in the new game. However, accounts banned from playing CS:GO will also be banned from playing CS2 on Valve servers.

Valve plans to announce the game's full range of new features at launch, but during the limited testing period, it will evaluate a subset of those features to get ready for the worldwide release. The company notes there's "much more to come" and that it will reveal all the details of Counter-Strike 2 in just "a few months."

EVE Online Studio CCP Games Is Making a Blockchain Game

CCP Games, the studio behind EVE Online, has announced that it is working on a new triple-A game set in the EVE universe, which will leverage smart-contract blockchain technology, focusing on persistence, composability, and open third-party development. The project has received $40 million in development funding from Andreessen Horowitz, a venture capital firm founded by Marc Andreessen. The announcement is more about the funding for the project than the game itself, and there is little information about what the game will involve beyond CCP's expertise in player agency and autonomy.

Andreessen Horowitz said CCP "has already made great progress in product development, and we’ve been very impressed by the playtests thus far."

CCP CEO Hilmar Veigar Pétursson has previously expressed enthusiasm for the "untapped potential" of blockchain technology but acknowledged that there's "a lot of work needed" before it's ready to be used in games like EVE Online. He stated explicitly in 2022 that "we have no plans to add blockchain technology into EVE Online’s global server Tranquillity for the foreseeable future," adding that "for us, NFT stands for 'Not for Tranquility'."

Horizon Forbidden West: Adding Narrative Texture to People and Places

Guerrilla Games’ lead living world designer, Espen Sogn, spoke at GDC 2023 about creating a "living world" in video games. Sogn suggested that creating visible texture by layering in small details that cause far-reaching narrative ripples and hint at deeper meaning is the key to delivering on the promise of a "living, breathing world." Sogn cited the first entry in the Horizon series, Horizon Zero Dawn, as an example of a title that relied too heavily on NPC behaviors and interactions that existed in isolation, ultimately falling short when it came to world-building.

To remedy this, Sogn's team created tribe-specific animations and resisted the urge to use them everywhere. The team wanted to avoid leaning on "information booth" NPCs to dump exposition on players and ensured each of Forbidden West's tribes interacted with the world and other NPCs in visibly unique ways. Animations and actions need to be designed and implemented in such a way that players won't see repeat offenders every time they visit or linger in space. Sogn suggested that by layering small, considered animations and actions on top of each other, it's possible to convince players that people and places around them are part of a vast, ever-spinning ecosystem that existed long before they arrived and will continue to exist long after they've left.

The Utaru tribe in Forbidden West, for example, sits closely together during conversations and has a clear disregard for the notion of personal space. This was a design choice that acknowledges the living arrangements of the Utaru, whose decision to build cramped settlements on top of old satellite dishes resulted in them becoming incredibly comfortable with one another. Another example is the sub-faction of NPCs in the Tenakth tribe who draw their knife from different places, subtly emphasizing their status as warriors. The reason these visual hooks work so well at imbuing the world with a sense of realism is that they aren't something that requires an explanation.

Animations and actions need to convey the idea of progress while nothing is happening. For example, to make it seem like workers are making progress while not actually achieving anything, Sogn suggests using a long looping animation, so NPCs can start painting at one end of a long wall and slowly work to the other side before turning around and moving in the other direction. Another solution is to have two states or positions that NPCs can move between, with a long pause in between, such as an NPC who picks up a crate from a table and puts it down on the floor, followed by another NPC who picks it up from the floor and puts it back on the table.

Sogn suggests that adding texture to the world is about layering small, considered animations and actions on top of each other to convince players that the people and places around them are part of a vast, ever-spinning ecosystem. Players are observant, and by creating visible texture, game developers can convey the idea of progress while nothing is happening and hint at rich histories and cultures.

Netflix Games Will Add Monument Valley, Ubisoft, and More to Service

Ustwo has announced that its two mobile games, Monument Valley and its sequel, will be coming to Netflix in 2024 as part of Netflix's larger push into gaming. Ustwo CEO María Sayans confirmed that the Netflix versions of the games will be the same as their previous mobile releases and will feature all previous in-app purchases. The two titles were both critically and commercially successful during their respective releases and coming to Netflix will allow them to grow even further.

Netflix has confirmed that it will release more titles to its games service later this year, with Ubisoft set to release Mighty Quest: Rogue Palace, its second exclusive game on the service. Developer Super Evil Megacorp has also announced a partnership with Netflix on a new property. Netflix's partnership with these developers offers new opportunities to create a larger universe beyond a single game.

Since Netflix Games launched in late 2021, the service has released 55 games, with at least 70 games overall in various stages of production. The plan is reportedly to release 40 titles in 2023, with some already out. Netflix has opened up several studios all over the world, including a California studio that may be developing console games. Cloud gaming may also be on its cards down the line.

Netflix has not divulged its player numbers, but head of external games Leanne Loombe stated that the streamer was "super happy" with the numbers so far and "isn't at the point where we expect 100 percent of our Netflix members to be playing games."

Riot Games' Prime Gaming Partnership Renewed

Riot Games and Amazon's Prime Gaming have renewed their partnership, which spans in-game content across League of Legends, its mobile counterpart Wild Rift, Valorant, Legends of Runeterra, and new this year, Teamfight Tactics and the publisher's esports programs. The deal will provide Amazon Prime members with exclusive rewards, including Mystery Skin Permanent, Champion Permanent, Riot Points, Champion Shards, XP boost, Ward Skin, Eternal Shards, Orange Essence, Baubles, Emotes, Recalls, Skins, Skin Poses, Player Cards, Gun Buddies, and Sprays.

Prime Gaming will also remain a global sponsor for League of Legends and Valorant Esports and will be the first global sponsor for Teamfight Tactics Esports. The program will provide free content to esports fans throughout 2023. Prime members can claim exclusive esports emotes during LoL Esports global events and will continue to sponsor key broadcast moments for VCT events.

Amazon Prime members can claim in-game content for Riot Games titles as they become available by visiting gaming.amazon.com. The renewed partnership between Riot Games and Prime Gaming will provide Amazon Prime members with exclusive rewards, and it will continue to support esports events throughout 2023.

Sony Files Cross-Platform NFT Trading Framework Patent for Gaming

Sony has filed a patent that outlines a framework to earn and trade NFTs, even across other systems. The patent describes a system that would allow players to earn NFTs in the form of exclusive skins and other content, which would then allow users to trade and transfer the NFTs to different consoles and platforms. The patent recognizes that current systems are technologically inadequate for owners to use the asset across different games and/or platforms.

The system includes instructions executable by at least one processor to determine that a first end-user entity has performed a task for which a first non-fungible token (NFT) is to be provided. The task is performed within at least one computer simulation, and the first NFT represents a digital asset. The instructions are also executable to provide the first NFT to the first end-user entity and prevent other end-user entities engaging in other instances of at least one computer simulation from being provided another NFT for performing the task again.

The first end-user entity may include plural end-users that act in concert to perform the task, or a single end-user and no other end-users. The task may include locating the digital asset within at least one computer simulation and/or beating or overcoming a particular aspect of at least one computer simulation. The digital asset itself may include a video game skin, video game artwork, an avatar, a video game weapon, and/or a video game skill.

It is important to note that this is merely a patent, and it may not be something that actually happens. The filing of the patent simply means that Sony is exploring NFTs in some capacity. The idea of NFTs in the gaming community is not popular, and it is unclear whether it will be adopted in the future.

Unreal Editor for Fortnite: Tim Sweeney’s Belief in the Metaverse

During the State of Unreal presentation, Epic Games showcased its vision for a metaverse and unveiled more details about the economy around its Unreal Editor for Fortnite, a new unified marketplace, Fab, which offers assets across several game engines, new Metahumans animation tools, and more. In an interview with GamesIndustry.biz, Epic Games CEO Tim Sweeney further clarified his vision for an open ecosystem across the games industry. He explained that the metaverse has to be open and not another walled garden.

Sweeney believes that the games industry is the perfect place for an open system to be involved because there's not one predominant company that can dictate terms. He thinks that each company will be better off connecting their services to an open system and being in an open economy rather than just limiting themselves to their own user base. The ultimate goal is to compete to be the leading service provider in every area, with the hope that in some of these areas, they may actually be number one, two, or three.

Epic Games wants to compete in the engine space with Unreal Engine, compete with server hosting in the future, get all of Fortnite hosted by servers they control, and have the best asset marketplace. They want to provide some really amazing first-party game experiences, just like consoles have their first parties. Sweeney believes that if they build this thing in an open environment, then companies can live on their merits.

When asked about why the time is right to build upon Epic's metaverse vision, Sweeney says there's been a very clear, identifiable trend towards it, regardless of various trends such as NFTs and blockchain, which Epic is not interested in. He believes that the metaverse is happening for real, and it appears to be growing exponentially to the point of reaching several billion by the end of the decade.

However, Sweeney believes that Apple is the main roadblock standing in the way of Epic's vision for a metaverse. He believes that Apple will either try to crush the metaverse or extract all the profit from it. Apple doesn't let you use a competing browser engine, so they can do the same thing with the metaverse. They could just amend all the platform's rules tomorrow to kill everything everybody is doing. Sweeney argues that this is why they need robust antitrust laws and why they're fighting this so hard.

Nexon Heads into NFTs with MapleStory Universe and Polygon Deal

Nexon, South Korea's largest gaming developer and publisher, has announced that its MapleStory Universe virtual world ecosystem will enable players and creators to develop and manage non-fungible tokens (NFTs). The company is working with the Polygon blockchain protocol to make this happen, which is a big deal in the fledgling Web3 gaming space. Polygon will power the blockchain ecosystem for MapleStory Universe, leveraging the Polygon Supernets' technology to expand its in-game economy. MapleStory debuted in South Korea in 2003 and has a massive fan base worldwide.

Nexon will leverage Polygon Supernets to propel the game's thriving in-game economy to the next level, and players will acquire NFTs through gameplay to unlock multiple benefits and utilities in various games and applications in the ecosystem. Polygon Labs, the development and growth team for the Polygon protocol, will provide both technical and business support for the game. The network aims to scale up the number of users to millions and to scale up transactions as well.

Nexon will showcase various blockchain projects targeting the global market such as MapleStory N and aim to build the next generation of Virtual Worlds through the NFT-based ecosystem MapleStory Universe. Nexon will work closely with the team at Polygon Labs to develop and market the game. Polygon Labs is committed to offering multiple solutions to bring its visions to market.

Magic Eden Embraces Ordinals, Releases Bitcoin NFT Marketplace

Magic Eden, a non-fungible token (NFT) marketplace, is launching a fully audited Bitcoin NFT marketplace, allowing traders to purchase inscriptions, or non-fungible tokens minted on satoshis within the Bitcoin network. The company is integrating support for Bitcoin wallets Hiro and Xverse to allow traders to list, purchase and sell Ordinal NFTs. Magic Eden is teaming up with popular Ordinal collections Taproot Wizards, Inscribed Pepes, and Bitcoin Bandits to help onboard its users to Bitcoin-based NFTs. The marketplace will also include information about NFTs such as Ordinal rarity and inscription numbers.

Jack Lu, CEO and co-founder of Magic Eden, said that on Bitcoin, all media that is uploaded onto the chain cannot be changed or removed, and this simplicity is embraced by many creators who want to create true collectibles that are inscribed onto the chain. Zhuoxun Yin, the co-founder of Magic Eden, said that the company wants to onboard more users to trade NFTs on the Bitcoin network, prompting the release of its latest product.

Magic Eden is not alone in its efforts to build infrastructure to support Ordinals NFTs. On Monday, NFT platform Gamma.io launched its native marketplace, allowing users to mint and trade Bitcoin NFTs. There are a lot of high-value items that are being inscribed or created on the bitcoin chain, and for a very burgeoning NFT ecosystem, it has been super exciting to see, said Yin. At Magic Eden, they are working on a lot of cross-chain things anyway, and they felt like this was a really cool adjacent ecosystem for them to tackle.

The launch of a fully audited Bitcoin NFT marketplace by Magic Eden will allow traders to purchase inscriptions, making Magic Eden one of the companies building infrastructure to support Bitcoin-based Ordinal NFTs. Magic Eden is partnering with popular Ordinal collections to help onboard users to Bitcoin-based NFTs, and the marketplace will include information about NFTs such as Ordinal rarity and inscription numbers. The company aims to onboard more users to trade NFTs on the Bitcoin network, while also working on cross-chain projects.

Luxury Fashion House Balmain Drops Unicorn Sneakers Bundled with NFT Version

French luxury fashion house Balmain has launched its latest Web3 initiative, dropping a limited series of NFT sneakers based on its Unicorn footwear line that each comes with a pair of matching limited-edition real-world shoes. The Unicorn Phygital Wearable Collection consists of 130 Unicorn sneaker NFTs bundled with identical physical counterparts. Five unique sneaker designs are debuting via the collection's Unicorn bundles, which each cost between $1595 and $2095 payable in either traditional currency or ETH. The Ethereum NFTs were crafted in collaboration with Space Runners, a digital fashion company backed by Pantera, Polychain, Jump Capital, and Animoca Brands' Yat Siu, among other investors.

Balmain's Chief Marketing Officer, Txampi Diz, said that as the physical and digital continue to merge, Balmain is dedicated to constantly exploring emerging pathways that help add new recruits to the very engaged, diverse, and global Balmain Army. He added that the collaboration allows them to introduce this historic house to a broader audience. Along with rare physical sneakers, holders of Balmain Unicorn NFTs will be granted certain other perks, including early access to future Balmain drops and other exclusive Balmain products, plus additional digital wearables for use in online games and metaverse platforms.

To Space Runners Creative Director Rohan Chhabra, those tangible, more traditional add-ons are the sugar necessary to make the medicine of digital fashion go down with the currently crypto-cautious masses. Balmain's Unicorn Phygital Wearable Collection is on sale starting today, and the sale is now live.

Balmain's latest Web3 initiative involves the launch of a limited series of NFT sneakers based on its Unicorn footwear line that each come with a pair of matching limited-edition real-world shoes. The Unicorn Phygital Wearable Collection consists of 130 Unicorn sneaker NFTs bundled with identical physical counterparts. The Ethereum NFTs were crafted in collaboration with Space Runners, a digital fashion company backed by Pantera, Polychain, Jump Capital, and Animoca Brands' Yat Siu, among other investors. Holders of Balmain Unicorn NFTs will be granted certain perks, including early access to future Balmain drops and other exclusive Balmain products, plus additional digital wearables for use in online games and metaverse platforms.

Pudgy Penguins Files US Trademark Applications

SushiSwap DAO Subpoenaed by SEC

SushiSwap, the Ethereum-based decentralized exchange, disclosed on Tuesday that it had received a subpoena from the Securities and Exchange Commission, indicating it could soon be subject to regulatory enforcement action. The organization's disclosure came in the form of a proposal submitted to the Sushi DAO for the establishment of a legal defense fund to cover potential legal costs. The subpoena represents the latest in a string of SEC enforcement actions, including fining cryptocurrency exchange Kraken over its staking product and suing Terraform Labs founder and CEO Do Kwon for alleged securities fraud.

The proposal seeks to make $3 million available for the legal fund in the form of Tether's USDT stablecoin, with a contingency that would make another $1 million worth of USDT available if the initial funds are depleted. The proposal had 850 page views at the time of writing. One DAO member wondered if the SEC sent the subpoena directly to SushiSwap's Head Chef Jared Grey in order to bring an enforcement action against a DAO.

SushiSwap is ranked No. 14 among other decentralized exchanges in terms of daily trading volume, with an average of $30.7 million, according to CoinGecko. Its most popular trading pair is Ampleforth (AMPL) and wrapped Ethereum (wETH), which comprised 28% of the exchange's daily trading volume. SushiSwap's SUSHI token fell 5% after the disclosure, falling as low as $1.14 from $1.22 in just an hour, according to CoinGecko.

Last September, the Commodity Futures Trading Commission filed a lawsuit against Ooki DAO, the organization behind the Ooki Protocol, a decentralized finance platform. In December, a California court ruled that the CFTC needs to serve specific individuals in a DAO, not the DAO as a whole. Sushi did not immediately respond to requests for comment from Decrypt. Grey, who is based near Tampa Bay, Florida, did not respond to requests for comment from Decrypt.

Taiwan's Crypto Industry Welcomes Regulatory Announcement

Taiwan will soon have special legislation to regulate cryptocurrency, with its Financial Supervisory Commission (FSC) to be in charge. The FSC will regulate everything from banking, securities, and futures to anti-money laundering. Taiwan has two financial regulators: the Central Bank of the Republic of China and the FSC. Reports say the FSC won't be regulating non-fungible tokens (NFTs) as they are still emerging as an asset class. Authorities approved 24 crypto platforms under the island's anti-money laundering compliance system in September.

An initial framework for the law is expected by June, with an initial draft for later this year. Wayne Huang, co-founder, and CEO of XREX, welcomed the news, saying that the industry can only grow when it's regulated. Huang said that the next steps would be for the virtual asset service provider industry to collaborate with the FSC to define regulatory operations, adding that one of the first steps is to form an industry self-regulatory body to help develop a set of rules.

Some in Taiwan's parliament had called for the newly established Ministry of Digital Affairs (MODA) to be the chief crypto regulator, though others have said the Ministry is relatively inexperienced in regulation compared to the FSC. Alex Liu, CEO of Maicoin, said that getting the balance between experimentation and investor protection is the order of the day. Historically, Taiwan has taken a hands-off approach to crypto regulation, only regulating the asset class under the framework of controlling money laundering.

The collapse of FTX added a sense of urgency to Taiwan's regulatory push, as the Taiwanese were one of the largest users of the exchange per capita, attracted by its relatively high-interest rates for US dollar deposits compared to local banks. Huang Tien-mu confirmed the news to lawmakers in Taiwan's parliament during a hearing about global banking stability. Reports say the FSC won't be regulating NFTs as they are too early to regulate. XREX's Huang added that due to the extendability and composability of NFTs, they can represent a broad spectrum of things ranging from commercial products to commodities to securities, so the FSC likely needs more time to develop a proper set of NFT classification guidelines.

SEC Urges Investors to Be Cautious with Crypto Securities

The U.S. Securities and Exchange Commission (SEC) has issued a warning to investors about the potential risks of investing in crypto asset securities, cautioning that platforms offering crypto trading may not be complying with federal securities statutes. The SEC's Office of Investors Education and Advocacy emphasized that securities broker-dealers, investment advisers, and exchanges are required to register with the SEC, a state regulator, or a self-regulatory organization. The agency also noted that entities and platforms involved in lending or staking crypto assets may be subject to federal securities laws.

SEC Chair Gary Gensler has previously expressed concerns about the lack of regulation in the cryptocurrency industry and has attempted to demonstrate that many crypto exchanges are operating as unregistered securities exchanges in the U.S. The SEC's warning comes after Coinbase disclosed that the agency issued it a Wells Notice, indicating a potential enforcement action tied to the exchange's listing of potentially unregistered securities. Coinbase's Nasdaq-listed shares were hit hard by the news, slumping as much as 20% in early trading on Thursday.

The SEC's Office of Investor Education and Advocacy also advised investors to be cautious of potential fraud or manipulation in the crypto market, which is largely unregulated and can be highly volatile. The agency recommended that investors research the risks associated with crypto investments before investing and be careful of promises of high returns. The SEC has taken enforcement action against crypto companies for fraudulent activities such as initial coin offerings (ICOs) that violated securities laws.

The SEC has been working to develop a regulatory framework for cryptocurrencies and digital assets, but progress has been slow. Gensler has indicated that he believes many cryptocurrencies are securities and should be subject to SEC regulation. The agency has been pushing for greater oversight of the crypto industry, including more robust investor protections and greater transparency. The warning to investors is part of the SEC's efforts to educate the public about the potential risks of investing in the cryptocurrency market.