Solana-Based MagicBlock Raises $3M to Power Fully Onchain Video Games

Solana’s blockchain network has found itself at the center of two key developments: advancements in the gaming sector and debates over its decentralization. MagicBlock, a Solana-based gaming startup, recently secured $3 million in pre-seed funding, with backing from Andreessen Horowitz, to further its mission of running video games fully onchain using innovative technology. Meanwhile, Solana Foundation’s executive director, Dan Albert, addressed concerns over the network’s decentralization at Korea Blockchain Week 2024, defending the behind-the-scenes coordination of a critical patch as a necessary security measure. 

MagicBlock Raises $3 Million in Pre-Seed Funding to Revolutionize Onchain Gaming

MagicBlock, a Solana-based gaming company, has secured $3 million in pre-seed funding to accelerate the development of its groundbreaking gaming engine. The funding round was led by prominent venture capital firm Andreessen Horowitz (a16z), following MagicBlock’s participation in a16z’s highly competitive crypto startup accelerator earlier this year. This new injection of capital will enable the six-person startup to expand its team and bring its innovative technology to the Solana mainnet.

MagicBlock is addressing a key challenge in blockchain gaming: how to run video games fully onchain without sacrificing performance. Traditionally, blockchains are not known for their speed, making them a difficult choice for running real-time, performance-intensive applications like video games. MagicBlock’s solution lies in its proprietary ephemeral rollups, a technology designed to extend Solana’s capabilities while maintaining high throughput and low latency.

Ephemeral rollups work by temporarily moving Solana’s state to a higher-throughput layer before settling back to the base layer, effectively bypassing the inherent speed limitations of the blockchain. This approach differs from other blockchain gaming solutions, such as Axie Infinity’s Ronin blockchain or layer-2 systems like Immutable and Sonic, which create separate environments that can fragment liquidity and draw fees away from the base layer.

MagicBlock’s decision to build on Solana is strategic, aiming to harness the power of Solana’s architecture while avoiding the pitfalls of layer-2 fragmentation. By utilizing ephemeral rollups, MagicBlock can keep the game logic on Solana while the state, or data, temporarily moves to a high-speed layer. This process is further enhanced by combining optimistic verification—a method favored by Ethereum layer-2 solutions such as Arbitrum and Optimism—with zero-knowledge proofs for final transaction verification.

One of the most compelling benefits of fully onchain gaming is composability, a feature that allows other developers to build on top of existing smart contracts. This opens the door to unprecedented innovation, enabling developers to create new games, features, or applications that interact directly with the base game. By operating entirely onchain, MagicBlock aims to reduce reliance on third-party intermediaries, allowing games to function in a more decentralized, secure, and collaborative environment.

MagicBlock co-founder Andrea Fortugno highlighted the importance of user experience in onchain gaming, particularly around latency. “Players get pissed off if they have 100ms latency, so forget half a second,” he said. This frustration drove Fortugno and co-founder Gabriele Picco to develop their unique solution. The two entrepreneurs initially founded MagicBlock in September 2023 while building a fully onchain game. It was during this process that they realized the limitations of existing blockchain technologies for gaming and decided to innovate from the ground up.

Gaining Traction in the Solana Ecosystem

MagicBlock’s technology has already garnered significant attention from the Solana community. A video showcasing their game engine amassed 429,000 views on X, further fueling interest in the startup’s future. This momentum positions MagicBlock as one of the most exciting prospects in the blockchain gaming space, which has seen substantial investment but has yet to deliver widespread success.

The startup’s focus on using ephemeral rollups to enhance Solana’s base layer rather than creating a separate blockchain or layer-2 solution is a unique approach that could have significant implications for the future of blockchain gaming. By maintaining a close connection with Solana’s layer-1, MagicBlock avoids common criticisms of layer-2 ecosystems on Ethereum, such as fragmented liquidity and higher transaction fees.

MagicBlock’s founders are optimistic about the future of onchain gaming. Fortugno believes that gaming has always been at the forefront of technological development, pointing to the role of GPUs in revolutionizing both video games and AI. He sees blockchain gaming as the next frontier for technological innovation, where challenges such as performance and scalability will be overcome to deliver new gaming experiences.

With the recent funding, MagicBlock plans to grow its team and further develop its technology, including bringing its game engine to the Solana mainnet and forming partnerships with other onchain games. The company’s novel approach could serve as a model for future blockchain-based gaming platforms, offering developers and players a new way to interact with decentralized systems.

Solana’s Dan Albert Defends Network Decentralization Amid Centralization Claims

At the Korea Blockchain Week (KBW) 2024, Solana Foundation’s executive director, Dan Albert, addressed concerns over the network’s decentralization after a patch for a critical vulnerability was coordinated behind the scenes. During a roundtable discussion, Albert strongly pushed back against accusations that Solana’s ability to coordinate a patch means the network is centralized, reigniting the debate over the true nature of decentralization in blockchain networks.

The controversy began on Aug. 9, 2024, when Solana validator Laine disclosed details of a severe vulnerability that, according to their assessment, could have brought the Solana network to a halt. The vulnerability was serious enough to require immediate action. However, due to concerns that an attacker could reverse-engineer the vulnerability and exploit it to disrupt the network, Solana validators coordinated behind closed doors to deploy a patch.

This behind-the-scenes coordination raised eyebrows in the blockchain community, with some critics questioning whether such actions reflect a lack of true decentralization. Decentralization is a core tenet of blockchain technology, where no single entity should control the network, and decision-making should be distributed across multiple independent participants. However, the need for quick action to prevent a potential catastrophe led to a centralized approach in patch coordination, sparking debate about where to draw the line between effective governance and centralization.

Addressing these concerns at KBW 2024, Dan Albert clarified the situation and argued that patch coordination is not synonymous with centralization. Albert acknowledged the severity of the bug, which had the potential to cause what he termed a “liveness issue” on the Solana mainnet—a scenario where the network could become unresponsive. However, he emphasized that coordinating a patch to prevent such an issue is not evidence of centralization.

“Regarding your question of decentralization, I think it’s important not to confuse centralization with the ability to coordinate. There are 1,500 block-producing nodes all over the world that are operated by almost as many individuals,” Albert said. While acknowledging that some companies operate multiple nodes, Albert argued that the patch was implemented through collaboration with the community of validators, many of whom have been involved in previous Solana projects. This, he believes, is evidence of a decentralized community working together, not a sign of centralized control.

Albert went on to explain that the validators ultimately decide which software they run, reinforcing the idea that Solana remains decentralized despite the coordination. He further noted that the patch was distributed as open-source code, and validators were never asked to run closed-source binaries. “The ability to communicate with them, or some of them, voluntarily, is not to be confused with centralization,” Albert added, reiterating that the Solana Foundation’s capacity to organize patch deployment was a sign of a well-functioning network, not a centralized one.

This is not the first time Solana has faced accusations of being too centralized. In 2022, a community member alleged that Solana’s governance structure gave too much power to a small group of participants, claiming that the network could be paused and restarted by a few influential actors. This led some critics to liken Solana to a centralized, traditional financial system rather than a decentralized blockchain network.

The accusation resurfaced when Solana suffered a major network outage that year, and the decision to pause and restart the blockchain prompted further criticism about centralization. Some argued that if a small group of validators can make such decisions, the network may not be as decentralized as it claims.

The Decentralization Debate in Blockchain Networks

The tension between security and decentralization is a recurring theme in blockchain development. While decentralization is a foundational principle for most blockchain projects, there are times when centralized decision-making becomes necessary, especially in cases of emergency, such as network vulnerabilities. Coordinating responses to critical issues like the one Solana faced often requires quick, decisive action—something that can be difficult to achieve in a fully decentralized environment.

Albert’s comments highlight the nuanced nature of decentralization in practice. While blockchains strive to distribute control among many participants, situations like the Solana patch incident reveal the complexities involved in maintaining that ideal. According to Albert, the existence of a communication network among validators and the ability to coordinate in times of need does not contradict Solana’s decentralized nature.

Solana’s defender in this debate is not limited to Albert alone. Solana-based decentralized finance (DeFi) company Unstoppable Finance has also pushed back against claims that Solana is too centralized. The firm pointed out that Solana’s validator count is higher than that of other blockchains, such as Ethereum, which they argue suggests that Solana is more decentralized than critics believe.