Blockchain-based games are experiencing a surge in popularity, but they are becoming more and more expensive to play. Play to earn like StepN require players to purchase an NFT before they can participate, while other crypto video games offer users costly upgrades such as virtual avatars and distinctive skins or costumes.
HollidayThe startup, founded last November by Akshay Malhotra and Griffin Dunayfe, is building a buy-now-pay-later-style financial product aimed at gamers who want to pay for in-game purchases over time.
“It’s amazing that video games, these virtual worlds, now have a full market economy. In these worlds, you have digital property, digital ownership, and items of real value. One thing that struck us was that because these things have real value, it can actually be quite difficult to acquire and own them, and one of the fundamental principles of blockchain is this ownership,” said CTO Dunayf. in an interview with TechCrunch. .
As is the case with many traditional BNPL providers such as Klarna and AfterPay, Halliday’s product will be interest-free for users, said CEO Malhotra, who previously worked in the hedge fund industry.
However, unlike traditional BNPL providers, Halliday will not charge users who fail to meet their payments, Malhotra explained.
Instead, he called Halliday a “repo” product. Gamers can purchase the Halliday expansion in-game asset at checkout and start using it immediately, Malhotra said, but the asset will be held by Halliday until fully paid. Once the payments are completed, Holliday will transfer the asset to the player, he added.
According to Malhotra, if the gamer does not pay on time, instead of reporting the delay to the credit agency, Holliday will simply regain control of the digital asset. Halliday has developed its own smart contracts that “wrap” NFTs, meaning that players who own these wrapped NFTs can use the underlying object, but cannot sell, transfer, or own the rights to the NFT itself. Game developers also often have their own internal access mechanisms that prevent a user from taking possession of a virtual asset and holding it unless they are authorized to do so, he added.
While Holliday plans to charge an upfront fee to customers using the product to help cover startup costs, Malhotra hopes to eliminate the fee over time as his goal is to make the product as cheap as possible for gamers. The founders did not share details of their monetization plans, noting that they remain solely focused on building the product itself.
One of the main considerations for Halliday will be how to model the risk associated with its loans, as the company will pay game developers upfront for digital assets on behalf of its users.
“There aren’t many comparative models out there on how to model risk for something like this, so our team has been working to try and find new innovative approaches,” Malhotra said.
As for the time frame, Malhotra noted that gamers will ultimately be able to decide how long they need to pay off a given Halliday purchase. According to him, the founders suggest that the average time for launch will be about 1-3 months.
According to Malhotra, the six-member team plans to launch a beta partnership with League of Kingdoms in a few weeks. A full public launch is expected to take place shortly after the beta, he added.
In preparation for the launch, Halliday has raised a $6 million seed round led by the a16z cryptocurrency, involving Hashed, a_capital, SV Angel, Immersion Partners, Sabrina Khan and others, according to the company.
Already, many video games that have in-game purchases allow players to rent virtual objects. But Malhotra and Dunayf argue that a product like Halliday, which allows you to own property, is still in demand.
“If you look at comparable, real economic markets such as cars, for example housing, you will see that there is always rent, leasing and ownership – but ownership is favored,” Malhotra said. “If there is a way that you can own and get all the benefits that come with ownership like emotional attachment, emotional benefits, economic benefits and everything else that comes with it, and if there is a solution for that, there must be demand. for this.”
Credit: techcrunch.com /