Minecraft Banned NFTs—So ‘NFT Worlds’ Built Its Own Crypto Game Instead

When Minecraft announced that it would ban NFTs from one of the world’s biggest games in 2022, one blockchain project in particular took the hardest hit: NFT Worlds. Two years later, the rebranded Hytopia is now aiming to make a big splash on its own—and maybe take some of the shine off of the Web2 gaming smash.

With a customized Minecraft server as its home world, NFT Worlds had minted and sold scarce chunks of in-game land as NFTs on Ethereum scaling network Polygon. They’d sold for as much as tens of thousands of dollars’ worth of ETH on secondary marketplaces, generating some $163 million worth of trading volume before the ban was announced.

NFT Worlds faced mockery in some corners, as critics said that of course Minecraft wouldn’t let third-party creators monetize in-game content. But as pseudonymous NFT Worlds co-founder ArkDev told Decrypt’s GG this week that the game’s end user licensing agreement (EULA) didn’t specifically prohibit using crypto technologies on third-party servers at the time.

He also claimed—as he did after the ban was announced—that he had been in contact with Microsoft’s EULA team in advance of the decision, and that Microsoft seemed mostly curious about how they were using the technology. There were no red flags, he recalled. But then, he said, Microsoft went silent with no notice of the impending ban.

“They just wouldn't reply to us anymore,” ArkDev said. “We were like: OK, cool. I guess we’re just getting a backhanded smack in the dark. We’re not even aware of what’s going on.”

Instead of folding, though, NFT Worlds pivoted.

Since then, the project started building its own game rather than rely on one from a centralized giant with a closed ecosystem. The rebranded game, Hytopia, is nearing release—and its creators are also launching their own chain, Hychain, for other game studios to build on. And it has a token, too.

Hytopia will take a sizable step in that direction this weekend with the launch of a Hychain Guardian Node sale. It’s similar in approach to the model employed by Xai, a layer-3 gaming chain on Ethereum scaling network Arbitrum that launched a huge airdrop in January that benefited node key owners. Like Xai, Hychain is also built on Arbitrum tech.

Hychain will sell NFT-based Guardian Node keys starting Saturday at a price of 0.1 ETH (about $340), though the price will gradually increase over time as each tier of keys is sold.

A total of 50,000 such keys will be made available, and users who operate the network software will be eligible for a share of 250 million TOPIA reward tokens over the next three years. Guardian Node operators also receive a share of 25% of all network transaction fees.

Like Xai’s Sentry Nodes, the Hychain Guardian Nodes keep tabs on the network and must verify the state when challenged. ArkDev said that while their usefulness is relatively limited at the moment, an upcoming Arbitrum network upgrade expected within three to six months will make them more essential, letting users support Hychain as it grows.

Xai’s own Sentry Nodes key sale generated millions of dollars’ worth of revenue for that fledgling network, and Hychain’s sale could potentially do the same.

For ArkDev, too, it’s a way to let users invest in supporting the network and receive rewards for work that actively benefits the chain. It helps “align all the incentives” around the network, he said.

After the node sale, it won’t be long before Hytopia itself becomes playable: ArkDev estimated a beta launch in early April. He described Hytopia as a cross between Minecraft and one of the other most popular games in the world: Roblox, a free-to-play platform that lets players create and share their own games, with millions of available options.

Hytopia will look and feel like Minecraft, with a similar blocky, pixelated voxel vibe, but with more flexibility to play and create within the world. As with Roblox, players will be able to create and share their own game and worlds in Hytopia. And after the beta period, Hytopia will be freely open and available for anyone to play—no NFT required.

“You’re unlocked to build the games that you could never build in Minecraft, and the content you could never build in Minecraft,” he said, “but in the familiar play style that people have grown to love over the years.”

And what about those people who bought virtual land back in the NFT Worlds days? Those NFTs will still be valuable in Hytopia, but for a very different reason. The idea of scarce land is gone; instead, NFT owners will be able to take advantage of various perks in Hytopia that are focused on developers and content creators.

For example, NFT owners will be charged lower fees for selling their own in-game content in Hytopia games, plus they’ll receive better visibility for their created games. There are also TOPIA staking rewards. You don’t need to own one of those NFTs to create content and games in Hytopia, but it’ll provide a better deal for serious builders.

Hytopia may not easily shake its Minecraft association, but ArkDev hopes that it can prove out a model for supporting in-game item trades that typically happen in black markets for Web2 titles. With blockchain, such trades could happen within the game and give a cut of sales to the developer. If that concept takes hold, he thinks Web2 devs will seriously consider the tech.

“We think that's where the really big opportunity is,” said ArkDev, “and we think that once it's proven, it’s going to be where we see a lot of Web2 traditional games come in and start to build on top of that model.”

Edited by Ryan Ozawa.