Leveling Up NFT Games with MagicSwap 🪄

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Dear Bankless Nation

Arbitrum is the current leading Ethereum L2 scaling solution, thanks to its thriving DeFi and NFT scenes.

Treasure DAO is the current leader of Arbitrum’s NFT ecosystem. This collective is building a “decentralized Nintendo”, and the tools necessary to make that vision a reality.

What is the newest Treasure NFT tool? MagicSwap version 2.

This optimized MagicSwap could revolutionize web3 game economy, so let us go through what you can expect today from this unique NFT exchange!


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MagicSwap 2.0: Gamechanger for Web3 Games?

Treasure’s MagicSwap has been designed to offer more flexibility for game creators and gamers.

The 101

Treasure has just announced plans to launch the MagicSwap V2 NFT automated market maker (AMM), in Q2 2023. Treasure designed the exchange to be the first AMM in crypto to provide support pools for ERC-20s as well as NFTs via a single router.



The new MagicSwap is now available by @Treasure_DAO. MagicSwap 2.0 will be the first AMM crypto with universal token compatibility. It supports pools for both ERC-20s and NFTs through one router, and allows trading of all items in game economies. treasuredao.substack.com/p/magicswap-th…

Why It Matters

There has never been a shared decentralized exchange infrastructure for non-fungible and fungible tokens.

You can trade ERC-20s such as MATIC at Uniswap or sweep NFTs such as Lil Pudgys at Uniswap. The underlying infrastructure is still separate: ERC-20s trade using Uniswap’s traditional DEX protocol while NFTs trade using a marketplace aggregator developed from Genie.

Uniswap stated that it intends to create “more interoperable experience” between NFTs/ERC-20s. It’s therefore not unreasonable to assume that the DEX giant will introduce universal token compatibility at some point in the future.

MagicSwap 2 is unique because it is the first universal DEX we have confirmed and it has been specifically designed for web3 gaming which Treasure is a specialist in.

The details

Treasure is creating a ‘decentralized Nintendo’ which is a collection on-chain games that can be interconnected through the interoperability between in-game assets. Treasure’s native token MAGIC will also act as a shared currency. Bridgeworld, a strategy and RPG game, as well as RPG games such Smolverse and The Beacon, are the most popular. Realm is a resource management and strategy and resource management game.” — Ben Giove and Arbitrum Is mooning

Treasure is attempting to create a decentralized gaming environment where different games can grow and develop alongside one another.

To that end, MagicSwap was created to provide a flexible and open source game economy resource that can be used by many projects.

MagicSwap will offer universal token compatibility, as well as NFT to NFT pools via ERC-1155s. NFT-based liquidity providers rewards, dynamic price adjustments and automated royalties are some of the other features MagicSwap will offer.

MagicSwap offers a variety of new options for gamers, including:

  • Pool permission Game creators will be able to allow how tokens are traded out of pools. This will allow for tighter game economies and less hyper-speculative trading.

  • Location-based Markets — Geographical and geo-based trading restrictions will be possible for games to use MagicSwap in order to have in-game, location-specific marketplaces

  • Non financial trading MagicSwap’s pool customization options allow game creators to make it possible for players to trade a “web” of tokens without an off-ramp. This will give them the flexibility to fine-tune what parts of a game are and will not be financiallyized.

The big picture

Metaversal: I have written extensively about how web3 games which make in-game assets too easily tradeable often lack economic levers, causing economic outflows as well as overspeculation.

These issues can lead to game-ending problems. MagicSwap 2.0 is a compelling tool for web3 game developers. It will allow them to manage their game economies in a flexible and efficient manner.

✨ John Patten


Magicswap allows you to do the opposite of GameFi. Financialization is only possible for certain types of game items, such as valuable NFTs that can be sold peer-to-peer. Game currencies can be used to play and to mint/upgrade NFTs that *do* possess financial value.

I wrote earlier this year about my wish for NFT gaming in 2023. In that article, I mentioned how “no-token” games would allow NFTs to be centrally used. It is definitely a step in the right direction to be able to launch NFT/NFT pools using MagicSwap. The Treasure team made this clear in their most recent announcement.

A game may allow players to trade resources, but not convert them into USD. If players are able to craft ways to improve their characters or create rare items, the game may still allow for financialization. These rare items could be traded peer-to-peer via the Trove marketplace. This would introduce friction to the collectible trading experience, but not to trivial items such as an in-game resource.

What to Watch

There are three things you should be watching in this area with MagicSwap 2.0 on its way, and Treasure’s ecosystem growing.

1 Treasure’s $MAGIC – $MAGIC is the governance token of Treasure, MagicSwap and MagicSwap. It’s currently the most traded token on Arbitrum. Keep an eye on it in the coming year as a proxy for the early Arbitrum gaming industry!

2 This is the 1st MagicSwap experiment— NFT toNFT pools. The other customization options MagicSwap offers will open up new avenues for more skill-based web3 game economies. You can follow the progress of projects that start here!



The new Treasure Game Builders Program (GBP), supported by @arbitrum GBP is designed to encourage and support aligned high-potential games building within the Treasure ecosystem. Learn how Treasure can help you build and apply for the GBP

3 Which chains? 3 Which chains?

Action steps

  • Follow Treasure to receive MagicSwap updates – Subscribe to The Compass newsletter by Treasure and find out when the exact new NFT AMM drops

  • If you missed it Minting on Manifold 101

Author Bio

William M. Peaster, a professional writer, is the creator of Metaversal-a Bankless newsletter that focuses on the emergence and use of NFTs within the cryptoeconomy. He has also contributed content to JPG, Bankless, and other publications.

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This newsletter does not contain tax or financial advice. This newsletter is educational only and does not contain any investment advice, solicitation to sell assets or make financial decisions. This newsletter does not contain tax advice. Talk to your accountant. Do your research.

Disclosure. This newsletter may contain links to products that I use from time-to-time. If you purchase using one of these links, I might earn commission. The Bankless writers also hold crypto assets. Check out our investment disclosures.

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