The multi-billion dollar cosmetics market for the popular e-sports first-person shooter Counter-Strike 2 crashed after a mechanic update.
Esports News reported on October 8 that the Counter-Strike 2 skin market at the time reached a new high of approximately $5.78 billion. A separate Thursday report by Eurogamer said that recent game updates have liquidated almost $2 billion of this market.
Valve, the game's producer, changed the trade-up system to allow players to convert five low-rarity (secret-level) skins into knives and gloves, which were previously extremely rare. This immediately increased the supply of knives and gloves, causing prices to fall, but new demand caused the value of hides to soar.
One of the reasons Ethereum co-founder Vitalik Buterin cited as his inspiration for creating the blockchain was changes made by video game companies that had an impact felt by a large number of players.
He explained that he played World of Warcraft from 2007 to 2010, until the game's developer “removed the damage component from my beloved Warlock's Siphon Life spell.” “I cried myself to sleep. That day I realized the horrors of centralized services. I decided to quit immediately,” Buterin said at the time.
6-month chart of the price of the cosmetic item Sport Gloves Vice in Counter-Strike 2. sauce: price empire
Related: Stablecoins are quietly becoming the hidden engine of games: BGA report
Blockchain offers an alternative
Blockchain and non-fungible tokens, although widely opposed by the gaming community, offer a potential solution to such problems. NFTs are most associated with tradable digital art and can and are used for any digital goods, such as video game items.
By using NFTs to implement smart contract-based digital items, issuers can provide guarantees about what they can and cannot do. Smart contracts can set limits on the number of NFTs within a series that can be issued, as well as permanent rules for converting NFTs between different series.
Still, Martin Kupka, general partner at crypto gaming advisory firm Win Win, told Cointelegraph that just using NFTs is not enough. “Even if all the items were NFTs, the market would have crashed the same way because Valve has complete control over the functionality and utility of the items,” he said, adding:
“It is nearly impossible to prevent this from happening as long as a single entity develops and operates the game.”
Still, he suggests that once the game gets big, it would be in the interests of all parties to establish a community council and make important decisions transparent.
Kupka explained that NFTs do not provide protection against such scenarios, but said smart contracts can. “This is the premise of a ‘fully on-chain’ game: the core game rules are encoded immutably on the blockchain, preventing unilateral and sudden changes,” he said.
“Once the game is in place, players can be confident that the underlying 'digital physics' will not change unexpectedly. ”
Cori Leung, co-founder of crypto gaming infrastructure Pixelverse, agreed: “Smart contracts could have defined clear rules from the beginning, making any changes predictable and transparent.”
Related: After a tough year, there is a ray of hope in blockchain games
Advocates for blockchain in gaming
Katie Romero Finger, CEO of cryptocurrency services firm Babs, told Cointelegraph that the crash of Counter-Strike 2 skins was “a stark reminder that even a billion-dollar economy is built on borrowed trust.”
“What I'm seeing is more centralization and rules changing mid-flow. Rather than reducing market volatility, blockchain replaces unilateral control with transparent code,” she said.
Nokvi Dan Elidason, CEO of crypto gaming infrastructure company Gaimin, told Cointelegraph that the crash “exposed the fundamental flaws of the centralized digital economy.” “This is not a real economy. It's a corporate store,” he said.
Elidason said players “discovered in real time that their 'assets' were simply items in Valve's private database, a privilege that could be changed at any time.”
Joanna Barros, chief marketing officer of the crypto game My Neighbor Alice, told Cointelegraph that transparency and immutability will be key as the gaming economy continues to expand. “As the gaming economy grows to rival real-world markets, transparency and immutability are not just 'Web3 buzzwords,' they are fundamental consumer rights,” she said.
magazine: Major gaming giants are in talks with Immutable to launch tokens: Web3 Gamer
