NFTs inside PlayStation games?

GM and welcome to Decentra Daily. The newsletter that makes the transition from web2 ➡️ web3 as smooth as a single malt.

Today: A story for the web3 believers, as PlayStation NFT plans are uncovered.

Plus, one for the web3 doubters, as another crypto exchange looks set to fail. Ours is a broad church 🙏

• PlayStation in-game NFTs

• Exchange dominoes: More CEXs to fail?

NFTs inside PlayStation games?

A patent filed last year (uncovered recently by gamesual.com) suggests gaming giant Sony is working on a system for tracking video game items.

The system works by harnessing—you guessed it—a blockchain and asset tokenization. Here are some pics from the patent:

How would it work?

As you progress through a game, you unlock features, earn and customize items, and interact with other players in unique ways.

By tokenizing avatars and items, all that data can be tied to a specific player, who gets to own their progress and access a deeper level of in-game information.

Say you start a video game where players earn a tokenized sword in level 1. Instead of each sword being equivalent, that sword is now really yours, and you can add value to it by giving it a history. You could:

• customize it

• max-out its stats

• use it in unique or impressive ways (making it a "famous" or "legendary" item)

Players would be able to access libraries of owned items, collecting and trading them – and potentially importing items and avatars from one game to another.

Owning your journey

Tokenizing game progress also opens up the possibility for more detailed tracking of player progress and achievements.

Current trophy systems award players for performing certain actions or reaching set points in a game. A blockchain-based trophy system could offer a greater variety of achievements and info, think:

• Best friend achievement. You've played 5 different games with AlienInvader69

• We meet again. FinalFantasy4Eva killed you in a death-match on October 7, 2011

Why?

The idea of fully ownable and transferable video game assets is one of the use cases NFT evangelists have long fallen back on when asked, what's the point of those stupid internet pictures?

So, it's genuinely exciting to see a big name in gaming actively experimenting with how to turn degen theory into web3 reality.

Will it happen?

Ah, good question. Moving to this kind of asset-ownership model would mean significant structural changes in the way console games are developed and consumed.

Sony and PlayStation developers would need to collaborate on marketplaces, interoperability, and allowing players to generate revenue from the game items they earn or build.

But, when it comes to systems set up for digital shopping, personal avatars/profiles, and game item libraries, there are few as optimized as PlayStation:

And, we've already seen PlayStation dabble with NFT-adjacent projects.

Its latest loyalty program, PlayStation Stars, lets gamers play 2 earn points and digital collectibles.

After FTX, will more CEXs fall? 🁷 🂎 🂀

According to the Wall Street Journal, another of the big, centralized crypto exchanges is about to declare bankruptcy.

This time, it's BlockFi – the exchange that was bailed out by FTX over the summer.

Why is another crypto exchange having issues?

FTX bought BlockFi when it was having its own financial troubles. So ties between the two exchanges might seem obvious.

But BlockFi initially stressed that it was an "independent entity" with “fully functional” products when news of FTX's insolvency broke.

Then... the New Jersey-based exchange backtracked and admitted that they do have significant exposure to FTX in the form of owed assets and credit.

Since last Thursday, a banner on BlockFi's website reads, "BlockFi is not able to operate business as usual. We have limited platform activity, including pausing client withdrawals." Oh boy.

Will other CEXs go down, too?

Crypto.com

Execs from Singapore's Crypto.com are fighting some serious FUD surrounding their exchange's health.

According to CEO Kris Marszalek, crypto.com was not significantly exposed to FTX and is not in danger of insolvency. So things are ok, right?

Well, one way crypto.com sought to reassure customers was by releasing proof of reserves ...which revealed that 20% of the exchange's holdings are in Shiba Inu. 🤷‍♀️😬

Crypto.com also has some worrying similarities with FTX.

• Just like FTX, they launched their own token, $CRO, which has dropped around 80% this year.

• Like FTX, they splashed serious cash on naming an NBA arena.

Voyager

Bankrupt crypto broker Voyager had a $1.4 billion buyout deal with FTX before s*** went down.

Now that their buyer has also gone bankrupt (😅), Voyager attorneys are trying to make an agreement with one of their previously unsuccessful bidders.

Binance

Considering Binance's CEO played a central role in the unfurling of FTX, it would be a wild twist if it turned out his own company was also in trouble.

All sources point towards Binance being one of the strongest web3 companies around. Right now, they're embarking on new transparency and trust initiatives.

Coinbase

As the largest CEX in the US, Coinbase has taken a slower path to growth.

They brand themselves as the grown-ups in the room and have consistently made smart business plays – such as setting significant transaction fees, targeting a huge audience of crypto newbies, and putting a premium on consumer trust.

So are they ok? We think so. CEO Brian Armstrong confirms that Coinbase wasn't exposed to FTX, and that they remain a public company that holds customer assets 1:1.

So should I be using CEXs right now?

It's no surprise that customers are rapidly moving funds off exchanges – more than $5 Billion in Bitcoin and Ethereum has reportedly been withdrawn in the past week.

So, are CEXs safe to use? 🤔

Yes and no. If you trust your chosen exchange to act like a bank for your crypto, then CEXs can make buying and trading a breeze.

BUT – using a CEX means giving your money to a profit-motivated company, whose transactions probably aren't recorded publically on the blockchain. Your funds are open to potential theft from hackers or nefarious actions by the exchange itself.

So while CEXs make it easier to hold and trade crypto, their customers end up losing most of the benefits crypto was designed to offer.

Good catch-up. Same time, tomorrow?

👋

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