[KCF Grant Pilot-1] Grant Proposal for incremental build plan of DeFi Kingdoms features integrated in, and built for, Klaytn ecosystem

1. Summary
Kingdom Studios submitted KCF grant pilot proposal on 29 July 2023 (Grant Proposal for incremental build plan of DeFi Kingdoms features integrated in, and built for, Klaytn ecosystem). As the proposal is endorsed by KF here, the proposal will be brought to the voting of the Klaytn GC.

2. Proposal from the Kingdom Studios

Proposal Summary
Kingdom Studios, the developer behind DeFi Kingdoms, is submitting a request to the Klaytn Governance Council to support and fund a build incentive valued at a total of $1.5 million in order to secure the continued development of the DeFi Kingdoms: Serendale realm exclusively on Klaytn for the next 12 months.

DeFi Kingdoms currently represents nearly 20% of all transactions and 60% of all gas usage on the Klaytn blockchain, even though only approximately 10% of DeFi Kingdoms transactions are performed on Klaytn. This provides the opportunity for rapid growth through measures to bring more of the existing transaction volume to Klaytn, in addition to new growth through player acquisition.

The proposed incentive will further the collaboration between Kingdom Studios and the Klaytn Foundation, deepen DeFi Kingdoms’ ties to the Klaytn ecosystem, and help foster innovation and adoption within the blockchain gaming industry.

Kingdom Studios re-launched its DeFi Kingdoms: Serendale realm on Klaytn on December 8, 2022, completing a migration from the Harmony blockchain. Serendale is one of two currently operating realms, out of a total of only four that will ever exist. As part of the original agreement to bring Serendale to Klaytn, we launched a UniswapV2 decentralized exchange, a new exclusive-to-Klaytn Power Token called JADE, four Hero NFT classes designed for the Korean market, 3 separate NFT marketplaces, and brought Serendale to feature parity with our other realm, including our DFK Duel minigame and on-chain raffle system.

In the 7 months since launch, we have also translated our platform natively into Korean, integrated the Kaikas wallet, integrated four separate token and messaging bridges to Klaytn with partners Synapse and LayerZero, and deployed nearly 300 separate smart contracts. These include Power-Ups, which incentivize the holding and use of the JEWEL token for in-game rewards, and significant additional utility and synergy between our Hero and Pet NFTs.

Consequently, although DeFi Kingdoms’ activity on Klaytn represents only approximately 10% of our total transactions, we have nevertheless become a significant part of the ecosystem, with over 24 million transactions on Klaytn since our launch. In the past 30 days, we have seen 3.6 million transactions from over 35,000 unique active wallets—over 18% of all transactions on the network during this period. In addition, the generally complex transactions from the DFK ecosystem regularly amount to 60-70% of the gas usage on the Klaytn blockchain.

Additionally, over $16.5m in liquidity has been bridged to Klaytn from DFK Chain through our Synapse Bridge, with over 5m token and messaging bridge transactions to and from Klaytn. As a result, DeFi Kingdoms has quickly become one of the top gaming platforms on Klaytn, and is currently listed on DappRadar as one of the Top 10 Blockchain Games across all platforms.

Current & Future Development
Over the course of the next twelve months, we look forward to the continued development of the DeFi Kingdoms: Serendale realm on Klaytn and deepening our relationships with the Klaytn Foundation and broader ecosystem. During this time, we will be actively developing and launching a variety of exciting new features including our initial Player vs. Player (PvP) and Player vs. Environment (PVE) combat offerings, unique Hero Equipment NFTs that will fully integrate with the combat system, a Hero travel system with utility for Land NFTs that are currently unique to the Serendale realm on Klaytn, and Expeditions—a new form of long-term Hero questing that brings a much improved player experience. Each of these offerings will drive additional player engagement, blockchain transactions, marketing opportunities, and potential for collaboration that will benefit the entire Klaytn ecosystem.

The Kingdom Studios team is exploring several new ways to directly support KLAY through its offerings, both within the game and outside of it. We are currently finalizing development of the Bazaar, an orderbook-style decentralized exchange that will natively support the trading of any existing ERC-20, ERC-1155, or KIP-7 token, with the possibility of integrating ERC-721 and KIP-17 tokens in the future. This will benefit any project or protocol where low liquidity or zero-decimal tokens can lead to a less than ideal user experience when trading on a traditional DEX. We are also looking to launch this exchange as a standalone product outside of the DFK interface using KLAY as the base currency, bringing direct utility and burn to the KLAY token across the ecosystem. To this end, the Kingdom Studios team also intends to explore the path to becoming a validator for the Klaytn network and pursuing membership on the Klaytn Governance Council, allowing players to directly stake KLAY to our validator within the DeFi Kingdoms game interface.

We strongly believe in the potential and future growth of Klaytn and the Web3 space as a whole, and are always pursuing collaborations with new and existing projects. This includes not only consulting with new protocols, but also bringing our partnerships to the Klaytn network. We continue to work with bridge and messaging providers, on-ramps, social login and wallet solutions, and others as we build new relationships and bring them to Klaytn for the benefit of the ecosystem.

Building together is a core aspect of our mentality, and we want to be a resource and tool for others in the Klaytn ecosystem. As a potential launchpad, there are several ways we can and want to help new projects get off the ground, including the following:

  • With our existing raffle system, other projects can integrate our raffle tickets as prizes for their users, who can then redeem them for a variety of rewards—those existing in-game already, as well as customizable external rewards that are sponsored through those collaborations and partnerships.
  • As noted above, our orderbook-style DEX will be available to all projects within the ecosystem to use.
  • We have built a custom data and analytics platform which could be further expanded to assist other projects in the future.
  • As a project with significant reach, we are available for co-marketing, allowing us to amplify new and existing partners and projects to our audience.
  • We are always willing to consult and meet with upcoming projects to lend our experience and technical expertise in any way we can.

When brought together, the Kingdom Studios team can provide pre-launch consulting, pre- and post-launch co-marketing, an open marketplace, and ready-to-use rewards to any project that is interested, removing large barriers that builders face in getting started on a Web3 project.

Each of these measures, and others, will contribute to the health and vitality of the Klaytn ecosystem, driving additional utility, transactions, and gas consumption, while bringing about new, more frequent, and greater marketing opportunities to draw new users to Klaytn. DeFi Kingdoms intends to be an onboarding tool for the average person to discover the power of Web3, and those users will be introduced to the Klaytn ecosystem—and all of its projects—in that process.

Growth Opportunities
Despite the success that DeFi Kingdoms has seen on Klaytn thus far, challenges and obstacles remain to broader adoption and growth, as DFK transaction volume on Klaytn has been approximately 1/10 of that of our other realm during this time. Much of this discrepancy, we believe, is due to Klaytn’s implementation of the EVM with respect to the computation costs and gas settings required to achieve 1-second block finality. While this speed brings distinct advantages, it also means that a single block fits significantly less computational power than on other chains, requiring as many as 10x the transactions to achieve the same result. Combined with higher base gas fees, this leads to a less than ideal user experience.

The costs of maintaining infrastructure on Klaytn have also been significant. Our dedicated RPC for Klaytn, provided by Liquify, services an average of 1.5–2 billion RPC calls per month at a current cost of over $100k per year. A functional, centralized, and scalable solution provided by Klaytn would serve all projects and lower barriers to entry for new ones. Similarly, the discontinuation of analytics services provided by Covalent has resulted in the need for us to build and maintain our own analytics infrastructure, mentioned above, with its own associated development and maintenance costs. These services serve not only existing projects, but also community developers and others who are looking to build alongside emerging protocols.

While these obstacles are not insignificant, they are also not insurmountable, and we have already begun and are dedicated to continue working with the Klaytn Foundation to optimize chain computation costs, provide gas rebate incentives, and maintain critical infrastructure, not just for DeFi Kingdoms, but for all projects within the Klaytn ecosystem. Nevertheless, other chains are aware of these pain points, and have made overtures to us to move Serendale with offers greater than what we are proposing here.

This is not our preferred solution. We brought Serendale to Klaytn because we believe in the future of the ecosystem, and are invested in contributing toward Klaytn’s continued growth and the realization of its full potential. Consequently, we are submitting the following proposal in the spirit of transparency and in good faith toward finding a mutually beneficial solution.

Build Incentive Proposal
In order to facilitate the next stage of development of DeFi Kingdoms: Serendale on Klaytn, we are proposing the following:

Over the course of the next 12 months, Kingdom Studios will:

  • Guarantee support for the Serendale realm exclusively on Klaytn, including the maintenance of existing features and the development and release of new features. New features may include, but are not limited to the following, and may be released in any order. Some feature name changes may also occur:
    • The Bazaar, an orderbook style DEX supporting all ERC-20, ERC-1155, and KIP-7 tokens upon release, with possible future support for ERC-721 and KIP-17
    • Future seasons of DFK Duel, our NFT-based mini-game
    • Initial in-game Player vs Environment (PVE) experience
    • Initial release of in-game Equipment NFTs
    • Expeditions, long-term Hero Questing with a significantly improved user experience
    • The integration of social login wallet creation and account abstraction using the ERC-4337 standard in partnership with Halliday
    • The integration of VRF and oracle price feeds in partnership with Supra Oracles
    • On-chain tournaments, initially utilizing the existing DFK Duel minigame
    • A Hero Travel system, bringing initial utility to Klaytn-exclusive Land NFTs
    • Craftable in-game Equipment NFTs
    • On-chain achievements and earnable badges for players
    • Initial iteration of 3v3 Player vs Player (PVP) combat
    • Tournaments and eSports-style activity centered around PVP combat
  • Continue to work with the Klaytn Foundation to identify solutions to the pain points enumerated above, including computation costs, a gas rebate program, and infrastructure and analytics needs, and, as necessary, submit proposals for their implementation to the Klaytn Governance Council.
  • Foster partnerships and new collaborations within the Klaytn ecosystem, and continue to make introductions between the Klaytn Foundation and potential partners who are not yet a part of it.
  • Under the terms of the Klaytn Community Fund Grant program, support the Serendale realm for a minimum of 5 years, excluding a catastrophic blockchain event or superseding agreement with the Klaytn Foundation.

Over the course of the next 12 months, the Klaytn Foundation will:

  • Provide a total of $1,500,000 in build incentives to Kingdom Studios in KLAY tokens or USDC, at the suggested schedule based on the release of specific features:
    • $375,000 upon release of the Bazaar feature corresponding with the finalization of this agreement, a peer-to-peer order-book style DEX supporting all ERC-20, ERC-1155, and KIP-7 tokens, with technology applicable to other project’s tokens within the Klaytn ecosystem.
    • $375,000 upon release of the first iteration of Player vs Environment Combat, unique to the Serendale realm on Klaytn, with Serendale themed monsters and rewards incentivizing players to add volume/activity on Klaytn through this new feature.
    • $375,000 upon release of the Expeditions feature, a new form of questing, allowing new and existing players to scale gameplay more efficiently on Klaytn.
    • $375,000 upon release of a dynamic, on-chain Achievements system earned through gameplay, including achievements unique to Serendale, adding awareness and social functionality on Klaytn.

If any of these features are not released within 12 months from the ratification of this agreement, Kingdom Studios will forfeit that portion of the incentive.

Budget document: KCF - DFK Budget Template - Google Sheets

  • Continue to maintain and secure the Klaytn Blockchain. Should the blockchain have ongoing performance issues or halt, or be subject to a catastrophic network or bridge event that makes it infeasible and unsustainable for projects to build, the agreement to retain DeFi Kingdoms: Serendale may be voided by Kingdom Studios, with notice and after good-faith attempts to find a resolution. In the unlikely event that this occurs, any previously dispersed funds will remain with Kingdom Studios and any owed funds from completed portions of the incentive shall still be paid. Catastrophic events and safety include, but are not limited to, bridge or other incidents that cause major impact to tokens on the chain, regulatory changes that impact the chain or its ability to perform, the regular ongoing performance of the chain, and the expectation of communication and support around experience, operational expenses and opportunities, and safety of the chain.
  • Continue to work with Kingdom Studios to identify and implement solutions to the pain points enumerated above.
  • Foster partnerships and new collaborations with Kingdom Studios within the Klaytn ecosystem.

Kingdom Studios is a proven contributor to the Klaytn ecosystem and continues exploring ways to expand its reach, encourage active user participation, improve the ecosystem, introduce additional products, and drive sustainable growth. Over the course of the past 7 months, our flagship product, DeFi Kingdoms, has come to represent a significant portion of the transaction volume on Klaytn. Still in its infancy as a game, DeFi Kingdoms is nevertheless reaching all-time highs of users, gaining renewed exposure, and is poised to be introduced to a large new market in the near future. With a positive history of collaboration with the Klaytn Foundation, this proposal ensures the coming year of mutually beneficial progress and activity to better the Klaytn ecosystem as a whole and for all of its participants.

Note: The 30-day transaction history and data in this proposal is current as of July 7th, 2023.

3. Voting Period

  • 14 - 27 August 2023