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Crypto News – Arbitrum DAO’s Bold Move: $200M for Blockchain Gaming

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Crypto News - Arbitrum DAO's Bold Move: $200M for Blockchain Gaming

Arbitrum DAO’s $200M Bet on the Future of Web3 Gaming

Crypto News- The Arbitrum DAO is set to provide over $200 million in cryptocurrency to developers of blockchain-based video games. A proposal to establish a new “Gaming Catalyst Program” with more than 200 million ARB tokens has garnered significant support, with over 149 million votes in favor and nearly 31 million against.

If passed, the program would allocate 135 million ARB (approximately $150 million) for investments in game developers and studios, and 65 million ARB for grants.

However, the proposal has faced criticism, with detractors arguing that the amount is excessive for an industry that, despite significant venture capital investment, has yet to produce many successful titles.

“It is too much money to spend on a niche category,” wrote Eric Wall, a crypto influencer and investor, on X. Wall, an Arbitrum DAO delegate, was among those voting against the proposal, questioning the necessity of funding it to the tune of a quarter billion dollars.

This debate underscores the uncertain state of web3 gaming. Despite assertions from supporters that it is “not a bubble,” the lack of significant success stories, coupled with a tough crypto winter, has slowed investment in web3 games. In 2021, web3 gaming projects raised $2.3 billion, but this figure fell by over 70% to $576 million last year, according to DefiLlama. So far this year, these projects have only raised $213 million, despite a cautious return of venture capital to the crypto sector.

An Ambitious Budget

Karel Vuong, founder of video game developer Treasure DAO and co-author of the Gaming Catalyst Program, proposed it as a way to boost game development on Arbitrum, the largest Ethereum-based layer 2 blockchain.

“As a network, Arbitrum falls behind several major competitors across total games migrated, games launched, and total gamers,” the proposal states. Vuong believes that allocating an “aggressive budget” to attract and retain talent will lead to significant successes. The initiative aims to support game publishers and developers over a three-year period.

“The core of this initiative is to create an investment arm for the DAO that would be making investments instead of just giving out grants,” Krzysztof Urbanski, a member of Arbitrum delegate L2BEAT, told DL News. He added that the DAO’s revenue could come not only from sequencer revenue but also from returns on these investments.

Criticism and Concerns

Several Arbitrum delegates have expressed concerns over the scale of the Gaming Catalyst Program. GFX, a DAO governance firm and Arbitrum delegate, has spearheaded a late campaign against the proposal, arguing that the amount is exorbitant for a sector with few proven winners.

“This is an enormous amount of money for an industry vertical with no visible winners,” GFX wrote in the Arbitrum governance forum, labeling the proposal as highly speculative.

Lito Coen, another Arbitrum delegate, voted against the proposal, suggesting a more phased approach. “I would prefer if funding was for one year and or one third of the amount and having the GCP group apply for new funding after,” he stated on X.

Support for the Initiative

Despite the opposition, the majority of major Arbitrum delegates support the program. Urbanski, for instance, mentioned that the benchmark should not be blockbuster titles like Elder Scrolls but rather successful games like Stardew Valley, Forge of Empires, Travian, or Eve Online, which are profitable even if they do not dominate headlines.

Arbitrum DAO is not alone in its substantial investment in crypto gaming. Recent funds raised by Andreessen Horowitz, as well as Arbitrum competitors Starknet and Polygon, have all exceeded $100 million, signaling a broader trend of significant financial commitment to the sector.

FAQ: Arbitrum DAO’s Gaming Catalyst Program

What is the Gaming Catalyst Program proposed by the Arbitrum DAO?

The Gaming Catalyst Program is a proposal by the Arbitrum DAO to allocate over $200 million in cryptocurrency, specifically in ARB tokens, to developers of blockchain-based video games. If passed, the program will provide funding for both investments in game developers and studios, as well as grants to support the growth of the blockchain gaming ecosystem.

For the latest in crypto updates, keep tabs on Crypto Data Space.

Crypto News - Arbitrum DAO's Bold Move: $200M for Blockchain Gaming

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