Saga: Advancing Modular Blockchain Capabilities in the Gaming Sector

Greythorn Asset Management
9 min readMay 1, 2024

Project Name: Saga | Project Type: L1 | Ticker: $SAGA | Cryptocurrency Rank: 221 | Market Cap: $22.5M | FDV: $3.6B | Circulating Supply: 90M (9%) | Total Supply: 1B | Max Supply: ∞

Opening Remarks

Modular blockchains offer a solution to the difficulties of achieving decentralisation, security, and scalability in blockchain technology. This innovative approach divides the fundamental functions of a blockchain — such as execution, settlement, data availability, and consensus — across various specialised networks. In contrast to traditional blockchains, which rely on a single network to handle all operations, modular blockchains separate these tasks, greatly improving the efficiency of each function.

Source: Binance Research

Modularity is a promising pathway towards enhancing blockchain scalability, addressing the critical issues of decentralisation and security that many blockchain projects are actively exploring and developing. Since the inception of Celestia, the modular landscape has seen the development of various solutions, such as shared sequencers, proof systems, interoperability protocols, and order flow abstraction projects, along with infrastructure providers like rollup frameworks and Rollup-as-a-Service (RaaS).

Source: Celestia

One notable project is Saga, a modular Layer 1 platform specifically tailored for the gaming industry, which has recently made its mark as an innovative player in the crypto technology space.

Saga Overview

Launching a blockchain can be complex, as it requires developers to handle various technical aspects of blockchain infrastructure. The Saga Protocol simplifies this by offering the Chainlet — a dedicated blockchain that developers can launch as easily as deploying a smart contract. This solution integrates crucial elements like data availability, consensus, execution, and settlement into a seamless product experience. By consolidating these components, Saga not only saves developers time but also cuts down on the complexity typical of modular systems.

The Saga Protocol operates on a fully decentralised proof-of-stake model, ensuring that each Chainlet maintains the same high security standards and uses the same validator set as the Saga Mainnet.

Source: Chorus One

Furthermore, Saga’s impact is evident in its rapid growth. In less than two years, it has attracted 350 projects, 80% of which are in the gaming sector. Strategic partnerships with industry leaders such as Polygon, Avalanche, and Celestia highlight Saga’s ability to effectively scale infrastructures and support a wide range of blockchain applications.

Saga Architecture

Chainlets

The Saga Protocol revolutionises the deployment of blockchains through its product, Chainlets. These are automated, high-performance blockchains that are both interoperable and customizable within the Saga ecosystem.

Secured by the Saga blockchain and validated through a shared security model known as Interchain Security, Chainlets benefit from robust protection. This model allows Saga to provide security for its Chainlets, meaning they enjoy the same level of safety and decentralisation as Saga itself, functioning similarly to Cosmos SDK appchains but without managing their own validator sets.

Chainlets offer a decentralised and secure way to deploy application-specific blockchains, allowing developers the freedom to choose their preferred Virtual Machine. This flexibility was highlighted at the Saga Multiverse Summit with the introduction of Saga Realms, enabling developers to launch customizable chains on Saga with different features and services such as technology stack, security source and various obligations for those sources. Under the framework of Realms, the standard Saga Chainlet became one Realm of many that will be supported in the near future, including those for Saga’s partners at Ethereum (Ethlets), Polygon, Avalanche, Celestia and others.

Launching a Chainlet is uniquely permissionless compared to similar initiatives in the Cosmos Hub, which uses Replicated Security. Developers simply need $SAGA tokens to pay for setting up and maintaining their Chainlet, much like using a subscription service with providers like Amazon Web Services, except payment is made in $SAGA tokens.

Security Chain

The Security Chain is the primary security source for the Saga Protocol, utilising the Cosmos-SDK. It handles the minting, staking, and potential slashing of $SAGA tokens in response to validator misbehaviour.

Platform Chain

The Platform Chain, also built on the Cosmos-SDK, is where developers launch and manage their Chainlets. It consolidates security from various sources, including the Security Chain, and extends it to the Chainlets through a process called Cross-chain Validation (CCV), which also channels any reported misbehaviors back to the Security Chain for potential slashing.

Initially, the Platform Chain will draw security mainly from the Saga Security Chain, but plans are in place to incorporate additional sources such as Ethereum, Polygon, Avalanche, and other validators in the future.

Source: Saga

Team, Adoption & Alliances

The Saga team is led by a dynamic and experienced group of co-founders:

  • Jin Kwon, Co-founder and Chief Strategy Officer, previously Vice President at Ignite, holds a Master’s in Computer Science from UC Berkeley.
  • Jacob McDorman, Co-founder and CTO, previously co-founded the software consulting firm Cellaflora. He has a Bachelor’s in Mathematics from Purdue University.
  • Bogdan Alexandrescu, an accomplished technology expert and entrepreneur, is active in the Bitcoin Foundation and various blockchain ventures.
  • Rebecca Liao, Co-founder and CEO, also co-founded Skuchain, a recognized blockchain for global trade. Under her leadership, Skuchain grew to over $5 billion in annual volume and was named a top blockchain company by the World Trade Organization in 2020.

As of April 26, 2024, the Saga Innovator Program includes 350 projects, with 80% focused on gaming, 10% on NFTs and entertainment, and the remaining 10% on DeFi. These projects utilise Saga’s technology to innovate and scale their blockchain applications.

Saga has partnered with several leading blockchain protocols to leverage its Chainlets technology for scaling:

  • XPLA and Com2uS: In November 2022, Saga partnered with XPLA to provide scalable infrastructure for gaming-specific chains.
  • Celestia Labs: In January 2023, Saga began implementing sequencers-as-a-service to scale rollup architectures with Celestia.
  • Polygon: In February 2023, partnered to automate supernets, facilitating the deployment of appchain solutions.
  • Avalanche: In April 2023, Saga automated the instantiation of Subnets, enhancing appchain deployment.

Saga Origins, launched in March 2024, is dedicated to pioneering the introduction of Web3 games into the market. This division actively supports game developers at every stage, from the initial concept through to the final launch. To facilitate success, Saga Origins offers a range of services including partnerships with influencers to boost visibility, financial backing for user acquisition efforts, and extensive promotional support to maximise reach and engagement.

Tokenomics

The $SAGA token serves multiple purposes within the Saga Protocol. It’s the currency for developers to pay network validators when they launch and maintain Chainlets. It’s also a reward for users who stake their tokens to support the network’s security. Plus, holding $SAGA gives you the right to vote on decisions about the network’s future. Initially, there will be one billion $SAGA tokens, with about 90 million of them, or 9%, available when the Token Generation Event happens.

The market cap is $22.5 million and the fully diluted value stands at $3.6 billion. There are 90 million tokens circulating, which is 9% of the total supply of one billion.

Token Distribution

Source: Cryptorank

Token release schedule

Source: Binance Research

Fundraising

In October 2021, the company secured $2 million in funding with Ignite as the investor. The following year, on May 19, 2022, they successfully raised an additional $6.5 million in a Seed round with contributions from Hypersphere Ventures, Maven 11 Capital, SamsungNext, Merit Circle, Polygon Studios, and LongHash Ventures. They then went on to an Extended Seed round on November 20, 2023, raising $5 million, led by Placeholder Ventures and supported by LongHash Ventures, Com2uS, Red Beard Ventures, Dispersion Capital, and Tykhe Block Ventures.

Alongside these successful funding rounds, Saga marked a monumental launch on Binance by surpassing all previous launchpool records on the platform, attracting over $13 billion in under 24 hours.

Bullish Fundamental Factors

  • Modularity is key to solving scalability, decentralisation, and security challenges in blockchain technology. As an early adopter of this approach, Saga is well-positioned to benefit greatly if this model becomes widely accepted.
  • GameFi has also emerged as one of the most promising sectors in the digital asset space, and Saga is definitely dedicating resources to establish a significant presence in this industry.
  • Saga has established strategic partnerships with major blockchain entities like Polygon, Avalanche, and Celestia. These relationships strengthen Saga’s technical infrastructure and expand its ecosystem, improving its ability to support scalable and efficient blockchain applications.
  • Saga has received significant investment from well-known backers, providing it with the financial stability needed for ongoing development and expansion. The strong community engagement and investor confidence, highlighted by a record-setting launch on Binance, underscore its market credibility and potential for success.

Bearish Fundamental Factors

  • The blockchain space, particularly for gaming and DeFi, is highly competitive with numerous established players and constant new entrants. Saga’s success depends on its ability to continually innovate and differentiate itself from other blockchain platforms, which also are advancing their scalability and efficiency.
  • From an investment perspective, the cryptocurrency market is highly volatile and sensitive to macroeconomic factors, liquidity cycles, and economic news. Despite the high potential of this technology and Saga, the speculative nature of the market often overshadows its current real usage and demand.
  • Changes in regulations or negative legal developments on crypto could impact Saga’s operations, particularly in key markets that are critical for its growth.

Closing Remarks

As the blockchain landscape evolves, Saga emerges as a significant player in modular blockchain technology, especially in the gaming sector. Saga’s approach of dividing various blockchain functions into specialised networks enhances efficiency, security, and scalability. The introduction of Chainlets, along with a commitment to scalable, interoperable, and cost-effective infrastructure, positions Saga not just to meet current demands for blockchain solutions but also to influence the future of decentralised application development. This dedication to progress and innovation marks Saga as a pivotal entity to watch as it continues to impact the blockchain ecosystem.

For more insights on the blockchain industry, we encourage you to connect with us at Greythorn. Visit our website to learn more about us and how we are contributing to the blockchain revolution.

Disclaimer

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Greythorn Asset Management

Melbourne-based asset management firm specialising in Technology, Web3, Cryptocurrency, and Blockchain. Subscribe for our latest industry insights.