This gaming startup seeks to prove that “AI + cryptocurrency” is not a fad

Before the world became fixated on artificial intelligence, thanks to advances in generative artificial intelligence, cryptocurrency was the darling of many investors. Therefore, when some venture capital firms began to rapidly shift their focus from artificial intelligence to cryptocurrencies, industry spectators scorned their opportunism. Meanwhile, a wave of entrepreneurs has emerged as fervent advocates for the convergence of AI and cryptocurrencies. Vitalik Buterin, the main founder of the Ethereum blockchain network, published an article last month pondering the four possible applications of “AI + cryptocurrency”, arousing enthusiasm among his followers on Twitter. Use cases have yet to be demonstrated at scale.

A Singapore-based startup is trying to prove that combining artificial intelligence and cryptocurrency isn’t just a fad. Ultiverse, which claims to be an “AI-powered” platform for producing and publishing crypto games, has secured support from some reputable investors. It recently raised $4 million in a strategic funding round led by IDG Capital, a venture capital firm known for its investments in Chinese tech titans Tencent, Baidu and Xiaomi, as well as cryptocurrencies Coinbase and Circle, among others.

Other investors who participated in the round include Animoca brandsPolygon Ventures, MorningStar Ventures, Taiko, ZetaChain, Manta Network, DWF Venture and Jacob KO. The new investment increased Ultiverse’s valuation to $150 million.

How exactly does the Ultiverse use AI in its crypto-verse? In an interview with TechCrunch, company co-founder Jimmy Liu, who previously ran his family’s private equity firm, suggested that AI can be used to “accelerate production and adoption by part of the users”.

Instead of building AI models from scratch, Ultiverse is using existing large language models, such as GPT-4, Llama, and Stable Diffusion, to train its non-player characters in the game so that each player has a different experience at depending on his interaction with NPCs. Players can also create their own AI agents to act on their behalf.

“This type of manufacturing process could previously take days or even weeks. We needed more than one committed person to do this. But now, with the integration of artificial intelligence, we have reduced the time and cost to produce the same amount of content as before,” Liu said.

Adapting AI into the game design process may not be the startup’s greatest competitive advantage. After all, other studios can easily use LLMs in the same way. There are numerous examples of how gaming companies have embraced generative AI creation of artistic goods, building-level segments and even design game models for other developers.

Then there is the perennial discussion on crypto gaming, which revolves around the question of whether they truly generate tangible value for the industry by enabling user ownership and liquidity of assets, or whether they exist primarily to profit from players like a jackpot. Overall, the industry’s reputation has been ruined by “play to earn” headlines like Axie Infinite which have been compared to pyramid schemes.

So far, Ultiverse has released three games, including a mobile cricket game with 200,000 unique active wallet addresses, most of which come from India and Pakistan, where the sport is immensely popular. The startup has 7.3 million registered users across all its games as of December, averaging 830,000 monthly active users.

Using an increasingly common crypto wallet feature called “account abstraction“, which eliminates much of the technical complexity of self-custodial wallets, according to Liu the game of cricket has managed to attract mostly non-crypto users who previously did not own a wallet.

“Everything works pretty much seamlessly until they need to collect the reward after a certain time where they realize that, okay, this isn’t just a game,” the founder said. “This approach helps us grow and convert what we call web2 players who have never experienced web3 before, to be part of our ecosystem.”

“Ultiverse represents a unique, AI-driven solution for web3 game production and publishing, poised to revolutionize the industry,” an IDG Capital spokesperson said in a rosy statement. The company has also invested in other major crypto projects including Ripple, ImToken, and KuCoin. “This investment demonstrates our confidence in their potential to not only lead but transform the way games are developed and experienced globally.”

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