A16z is placing a bet on Solana gaming

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The Solana-based gaming company MagicBlock has raised $3 million in pre-seed funding that includes an investment from venture capital giant Andreessen Horowitz following MagicBlock‘s participation in a16z’s crypto startup accelerator earlier this year.

MagicBlock is developing a gaming engine that lets video games run fully onchain, a task that would typically be difficult due to the relatively low speed involved with using blockchains. The company solves this with a novel piece of technology it calls ephemeral rollups, which temporarily move Solanas state to a higher-throughput rollup before settling back to the layer-1.

MagicBlock drew the online Solana worlds attention after posting a video of its game engine that drew 429,000 views on X.

With the fresh funding, the six-person startup will aim to grow its team as well as develop its tech, which would include bringing its game engine to Solana mainnet and partnering with onchain games.

MagicBlock was founded in September 2023 by Andrea Fortugno and Gabriele Picco. The duo decided to create the company while building a fully onchain game and realizing how poor the user experience was, Fortugno told me in a soon-to-be-released Lightspeed podcast episode.

MagicBlock believes games running fully onchain benefit from being composable (meaning other developers can build on top of a game‘s smart contracts) and not relying quite so much on third parties, but it’s hard to make a decentralized computer program run at the speed that gamers demand.

“Players get pissed off if they have 100ms latency, so forget half a second,” Fortugno said.

So MagicBlock is developing ephemeral rollups, which make a slightly different bet than many competitors in the blockchain gaming space. Axie Infinity-linked Ronin created an Ethereum-compatible blockchain. Immutable and Sonic both operate layer-2s. Instead, MagicBlock is trying to build technology that extends Solanas base layer. This could avoid fragmenting liquidity or leeching fees away from the layer-1, which are common criticisms made of the layer-2 ecosystem on Ethereum.

Ephemeral rollups make use of a specialized version of Solanas software which temporarily lets a sequencer modify accounts before settling back to Solana. The rollups initially use optimistic verification, the method favored by EVM giants Arbitrum and Optimism, for speed before verifying transactions with zero-knowledge proofs.

As an idea, ephemeral rollups are made possible by the fact that Solana separates its state and logic, or accounts and programs, so the logic can stay put while the state moves to an ephemeral rollup.

Its an innovative approach to game development, particularly in a crypto gaming space that so far has drawn lots of investment while delivering minimal payoff.

But Fortugno thinks gaming is often at the frontier of technological development. He offered GPUs as an example: Before they were powering the AI boom, the circuits were used to speed up the graphics in video games.