This Gaming Startup Aims to Prove That ‘AI + Crypto’ is Not Just a Fad

Before the world became fixated on artificial intelligence, thanks to generative AI’s advances, cryptocurrency was the darling of many investors.
This Gaming Startup Aims to Prove That ‘AI + Crypto’ is Not Just a Fad

Before the world became fixated on artificial intelligence, thanks to generative AI’s advances, cryptocurrency was the darling of many investors. So when some venture capital firms started swiftly switching their focus between AI and crypto, the industry’s onlookers scorned their opportunism. Meanwhile, a wave of entrepreneurs emerged as fervent advocates for the convergence of AI and crypto. Vitalik Buterin, a key founder of the Ethereum blockchain network, published an essay last month speculating about the four potential applications of "AI + crypto," and his Twitter followers went wild. These applications are still to be proven at scale.

A Singapore-based startup hopes to demonstrate the AI-crypto combination is more than a hype. Ultiverse is an "AI-powered" platform for the production and publishing of crypto games, and has drawn the interest of some credible investors. Just last week, it raised $4 million in a strategic funding round led by IDG Capital, the venture capital firm behind such Chinese tech titans as Tencent, Baidu and Xiaomi, and more crypto upstarts like Coinbase and Circle, among others.

Other investors in the round were Animoca Brands, Polygon Ventures, MorningStar Ventures, Taiko, ZetaChain, Manta Network, DWF Venture and Jacob KO. The new capital valuation placed Ultiverse at $150 million.

But how exactly is Ultiverse applying AI in its crypto-verse? According to co-founder Jimmy Liu, who formerly ran his family private equity firm, in an interview for TechCrunch, AI can be used to "accelerate production and user adoption.

Instead of building AI models from scratch, Ultiverse is using existing large language models, such as GPT-4, Llama, and Stable Diffusion, to train its in-game NPCs so that each player will have a different experience depending on their interaction with the NPCs. Players can also create their own AI agents to act on their behalf.

This kind of production process in the past may take days or even weeks. We needed more than one person committed to doing that. But now, with AI integration, we have reduced the time and cost to produce the same amount of content as before," said Liu.

Adopting AI in the game design process might not be the ultimate competitive edge that a startup may leverage in its favor. That's because the studio has easy competition in using LLMs as it does. There are many examples of how the gaming firms have embraced generative AI at making art assets, building level segments and even devising game models for other developers.

Then there’s the perennial debate surrounding crypto games, which revolves around the question of whether they truly generate tangible value for the industry by enabling user ownership and liquidity of assets, or if they primarily exist to profit from players like a jackpot. Overall, the industry’s reputation has been marred by “play-to-earn” titles like Axie Infinity that have been compared to pyramid schemes.

Until now, Ultiverse has released three games, such as a mobile cricket game with 200,000 unique active wallet addresses, where most originate from India and Pakistan, countries in which the sport is enormously popular. So far, the company has 7.3 million registered users across all its games as of December, with month-to-month averages at 830,000.

"Account abstraction," an increasingly common feature of crypto wallets that removes much of the technical intricacy of self-custodial wallets, Liu says, helped the cricket game appeal to mostly non-crypto users who did not previously own a wallet.

It's pretty much seamless until they need to withdraw the reward after a certain time when they notice that, okay, this isn't just a game," says the founder. "That approach helps us grow and convert those, what we call web2 gamers who never experimented with web3 at all before, to be part of our ecosystem."

"Ultiverse stands as an AI-powered, one-stop solution for web3 gaming production and publishing, poised to revolutionize the industry," said an IDG Capital spokesperson in a rosy statement. The firm has also invested in other major crypto projects including Ripple, ImToken and KuCoin. "This investment signifies our belief in their potential to not only lead but also transform the way games are developed and experienced globally."

 

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2024-11-20 21:36:27