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Crypto gaming startup Argus Labs has raised $10 million in seed funding in a round led by Haun Ventures, the firm announced today, with Robot Ventures, Anagram, Dispersion Capital, and Alchemy also participating in the round.
The raise also included angel investors like Gitcoin co-founder Scott Moore, Sandbox VR co-founder Siqi Chen, and Osmosis co-founder Sunny Aggarwal in the mix, to name a few.
Argus Labs' flagship product is its World Engine, a software development kit (or SDK) that will enable game developers to create their own dedicated layer-2 blockchain networks using zero-knowledge proofs (ZKP) on Ethereum. Developers can customize their chains and decide exactly to what extent they want their game to live “on-chain.”
Zero-knowledge proofs verify zk-Rollup transactions, which is a technical innovation in crypto that allows more transactions to be processed simultaneously to help scale networks and add more transaction privacy.
Argus founder Scott Sunarto co-created Dark Forest, a crypto game launched back in 2020 that uses ZKPs. He believes that many more game elements can be on-chain than the average person might think.
In an interview with Decrypt, Sunarto said that World Engine will be able to support user-generated content through the blockchain and allow even more complex games like massively multiplayer online role-playing games (MMORPGs) to exist fully on-chain.
And in a time following the sudden rise and fall of play-to-earn smash Axie Infinity—when many Web3 game developers are shying away from going fully crypto and instead offering optional NFTs—Sunarto is doubling down on the new ways that crypto elements can be used in video games.
“Right now, the only ingredients that you’re really putting on-chain as a game developer are the NFT assets,” Sunarto told Decrypt. “But now, if you have more parts of the games on-chain, you’re essentially giving more ingredients for players, for other developers to really extend and build on top of the game.”
Sunarto envisions blockchain games in which players creating user-generated content (UGC) are more crypto-literate, and can code their own smart contracts (which power decentralized apps) to add new game elements and features.
And crypto scaling features like sharding will be able to help adapt games for growing audiences and effectively add new servers, Sunarto said. The goal is to offer game developers customization while empowering players to develop their own communities and initiatives around Web3 games.
“They built their own guild system,” Sunarto said of Dark Forest’s players, who also formed their own DAOs or decentralized communities around the title. He added that players took the initiative to create their own smart contract and “pool their resources together” in the game.
When it comes to other blockchains protocols like Solana, Avalanche, and even Ethereum scaling network Polygon, Haun Ventures suggested that none are optimized for gaming. Argus is attempting to fill that claimed void.
"Current blockchains are not designed to run games,” lead investor Haun Ventures said in a statement. “Scott and team, with our support, envision the World Engine as an open source, connected layer-2 of sharded blockchains that will serve as the backbone for the 'Internet of Games.'"