What is Settlus?

A blockchain with an actual use case, a GameFi that is sustainable, and a possibility of crypto mass adoption. That's what I see in Settlus.

You may have heard about Settlus on Twitter or Telegram. But finding concrete information might have been challenging, as we've been busy building. Well, I've got you covered.

Hi 👋 I'm Jacob Kim, and I have been working on Settlus for the past two years. We started from a team of four, and now there are over 150 people working on Settlus and Overdare. Here's almost everything about Settlus with my personal view.

• A Brief Intro to Settlus
• Overdare: Our Killer App
• How Overdare Works with Settlus
• New Financial Opportunities with Settlus
• How Overdare Pays Creators
• Oracle
• Frequently Asked Questions
  • Q1: Why Not Ethereum?
  • Q2: Why Not a Database?
  • Q3: Can We Deliver?
  • Q4: Will It Be Successful?
  • Q5: Tokenomics
• Future Plans
• Some Thoughts

A Brief Intro to Settlus

Settlus is a blockchain for payment settlements, hence the name "Settlus". It's designed as a financial infrastructure for our new game, Overdare. By recording Overdare's in-game transaction records on the blockchain, Settlus allows new financial applications for digital creators, such as IP trading.

Settlus is built on the Cosmos SDK, and uses EVM (Ethereum Virtual Machine) as a smart contract layer. This allows already established Solidity smart contracts like ERC20 and ERC721 to run on Settlus without modification. Settlus also supports IBC (Inter-Blockchain Communication Protocol), enabling cross-chain transactions with other Cosmos chains.

You can read more about Settlus at our official website and whitepaper. If you are a nerd like me, you can also check out our GitHub repository.

Overdare: Our Killer App

"Cool story bro, so you are building yet another alt layer one."

Well, yes. But we are also building our own killer app on top of Settlus. Settlus will have use case and real users (not just air drop farmers).

Overdare, our mobile game platform, will be the first platform to adopt Settlus. Overdare is a UGC (user generated content) platform like Roblox.

What is Roblox?

If you are not familiar with Roblox, it is a popular online platform that allows users to create and share games with others.¹ It's especially popular among kids and teenagers. If you have kids or nephews, they might be playing Roblox right now.

Here is a screenshot of Roblox marketplace. These hair, face, and clothes are all created by Roblox creators. Some of them are free, but most of them are sold for Robux, Roblox's in-game currency. Roblox creators can make real money by converting Robux back to fiat currency like USD. There are more than 3 million creators on Roblox, and some of them make millions of dollars a year. It's an impressive platform to say the least.

What is Overdare?

Like Roblox, Overdare is a mobile game platform where creators can create and sell in-game items, costumes, and games. Unlike Roblox, Overdare is built with Unreal Engine 5, and has a crypto settlement system powered by Settlus. Will explain more about the crypto settlement system in the next section.

Overdare is still being developed at the time of writing this blog post, but we are working hard to launch it soon.

Is Overdare a Crypto Game?

Unlike most crypto-related games, Overdare will not have any crypto shown to the users. It does not have any Play-to-Earn aspect, like Axie Infinity or other crypto games. It is just a regular mobile game like Roblox that's on your phone without any wallets, crypto, or anything.

Ironically, hiding the Web 3.0 aspect of Overdare can help with the mass adoption of Web 3.0 in the long run. Regular players don't play games because they are on blockchain. They play games because they are fun. So we are focusing on making Overdare fun and engaging for players.

But for creators, it's a different story. The creators will interact with the crypto part of Overdare. They will use a crypto wallet and hold NFTs. The wallet will be baked into the Overdare's creator dashboard and will be as easy to use as possible.

Why do we hide crypto from players but not creators?:

Our theory is that making money is the number one motivation for creators. If having a blockchain settlement system can help creators make more money, they will likely have no problem using it. In the following sections, I'll explain how a blockchain settlement system can help creators increase their earnings.

How Overdare Works with Settlus

Settlus is a blockchain for payment settlement and Overdare is a platform which pays its creators. By using Settlus, Overdare can provide quicker crypto payouts and new financial opportunities for its creators.

Let me use some examples to paint a clearer picture of how Overdare works with Settlus.

There are mainly two ways creators can make money on Overdare:

• By selling in-game costumes.
• By creating and monetizing games.

Costume Sales Example

Here is how Settlus works with Overdare when creators sell in-game costumes:

1. Upload Item

Alice uploads her in-game costume to Overdare. Then, Overdare mints a License NFT for the costume which proves that Alice is the owner of the costume. The License NFT is minted on Settlus blockchain and transferred to Alice's wallet.

2. Settlement Process

Fortunately, Alice's costume is a hit. Many players see Alice's new and shiny costume in Overdare and decide to buy it. Players can buy the costume with BLUC, Overdare's in-game currency. Similar to V-Bucks in Fortnite or Robux in Roblox. BLUC can be bought with in-app purchases through App Store or Google Play, again, no crypto or anything.

Once players buy Alice's costume, Overdare instantly records the transactions on the Settlus blockchain by creating UTXRs (Unspent Transaction Record). These UTXRs are like coupons that can be redeemed to claim the revenue from the costume sales. When Overdare records UTXRs, it tells Settlus which License NFT generated how much revenue. Then Settlus figures out who the owner of the License NFT is and pays the revenue to the owner of the License NFT in "eBLUC."

Crypto metaverses like Decentraland and The Sandbox sell the NFT itself as the in-game item. With Settlus, the NFT stays with the owner, and it's the 3D model that's being sold. This is a key difference between Settlus and other crypto metaverses. We concluded there is no good reason to sell in-game items as individual NFTs when digital data can be copied infinitely. NFT's use case shines when it's used to prove ownership.

3. Withdraw and Redeem

With eBLUC in her wallet, Alice can now withdraw the revenue. She can convert eBLUC back to Overdare's in-game currency BLUC, or redeem it for USDC (USD pegged stablecoin) or fiat currency. When Alice chooses to get paid with USDC, she can instantly receive the payment in her wallet.

Again, the redemption process is explained in detail in How Overdare Pays Creators section.

External NFTs Costume Sales Example

A unique feature of Settlus is that it can verify NFT ownership on other blockchains like Ethereum. If you own a Board Ape Yacht Club NFT on Ethereum, you can use it as an in-game costume on Overdare. Here is how it works:

1. Upload Item

Let's say Bob owns CloneX #1234 NFT on Ethereum. Luckily for Bob, CloneX provides 3D models of their NFTs to all holders.²

Bob uploads his CloneX #1234 NFT's 3d model to Overdare. But unlike Alice, Bob already has the NFT on Ethereum. Overdare does not mint any new NFT for Bob and just note that this costume's License NFT is on Ethereum.

2. Settlement Process

Again, some players see Bob's CloneX costume in Overdare and decide to buy it.

When the transaction is recorded, Settlus sees that the NFT is on Ethereum. Settlus Oracle module checks the ownership of the CloneX #1234 NFT on Ethereum. This process is explained in more detail in the Oracle section.

Once the ownership is verified, Settlus pays Bob the revenue in eBLUC to 0xBob on Settlus.

"Why does Settlus pays to 0xBob on Settlus and not 0xBob on Ethereum?"

Thanks to Settlus' EVM compatibility, the owner of 0xBob on Ethereum is automatically the owner of the same address on Settlus. Bob can simply switch networks on his MetaMask to Settlus and redeem his eBLUC.

Implications

This is a powerful feature of Settlus. This means blue-chip NFT projects can easily monetize their NFTs on Overdare, providing real utility to their holders. I think it can also help with the cold start problem for Settlus. If NFT projects and their holders find out they can monetize their NFTs on Overdare, they might be more interested in Settlus.

I personally can't wait to see Pudgy Penguins as in-game costumes! (I don't hold any Pudgy Penguins; I just think they're cute.)

Game Development Example

Selling costumes is not the only way creators can make money on Overdare. Game Developers can also make money on Overdare.

Settlement process for game devs is similar to the costume creators. Main difference is that instead of a single License NFT, game developers will get a token representing their ownership of the game.

1. Upload Game

Eve and her two other friends develop a new game using Overdare studio and deploy it to Overdare. Instead of an NFT, Overdare mints a new ERC20 token to prove their ownership of the game. Let's call this "GAME" token.

GAME token is used for two things: revenue sharing and governance.

2. Revenue Sharing

Eve and her friends' game becomes popular and revenue starts to pour in. Whenever revenue is generated from the game, Overdare records the transaction on the Settlus blockchain just like the costume sales. But this time, the revenue is paid out according to the GAME token ownership ratio.

Bob has 50% of the GAME tokens, and his friends have 25% each. This ratio was set by Bob initially when he deployed the game. When 1000 eBLUC is earned from the game, Bob will receive 500 eBLUC, and his friends will receive 250 eBLUC each.

3. Governance

Another use of the GAME token is governance.

Updates to the game must be approved by the majority of the GAME token holders. If Eve and her friends want to add a new feature to the game, they need to get approval from the majority of the GAME token holders. This allows gamers to have a decentralized, community driven game development process!

Remember how Vitalik was driven to create Ethereum because of his World of Warcraft character was nerfed?³ With GAME token, players can vote about a buff or a nerf of a character. With GAME token, Players' voice will be heard. A true community driven game development process. We call this Game DAO (Decentralized Autonomous Organization).

New Financial Opportunities with Settlus

So far, Eve and her friends have 100% of the GAME tokens and all the revenue from the game. But they can do more with the GAME tokens. They can sell some of their GAME tokens to their fans.

Fans are willing to buy the GAME token because they believe the game will become more popular and want to get a share of the revenue generated from the game. Like dividend stocks, GAME token can be sold as an investment. The value of the GAME token might increase if the game becomes more popular.

Next time Eve and her team develop a new game, they can raise fund by selling the newly minted GAME tokens. This is similar to ICO (Initial Coin Offering) but for game developers. Many of the indie game developers struggle to make money before their game becomes popular. With Settlus, game developers could sell their GAME tokens to make money before they make money from the game.

DEXs (Decentralized exchanges) can create liquidity pools for GAME token, allowing better trading experiences. Lending protocols can use GAME tokens as collateral for loans. Derivative trading markets can be created betting market on a game's success.

Like GAME token, License NFT also brings new financial opportunities.

Most of the NFTs today do not have any intrinsic value. It's hard to measure the value of an NFT other than the hype and its rarity. But License NFTs will have verifiable revenue statistics, in-game popularity, and more. It will have an intrinsic value that can be measured, not just hype and vaporware like most NFTs today. This can create a new sustainable NFT market.

A creator with a great marketing skill can buy a less popular but beautiful costume, market it well, and make a profit. A smart contract can bundle multiple License NFTs together and create a costume ETF.

These are just some ideas off the top of my head. What I am trying to say is that the possibilities are endless!

Tokenization of UGC can create new and exciting ways for creators to monetize their content.

How Overdare Pays Creators

So far, I've explained how Settlus can create a new financial opportunities for creators. But you might be wondering,

"How can creators convert their eBLUC to cold hard cash?"

To recap, "eBLUC" (Earned BLUC), is an ERC20 token that's minted on Settlus blockchain by Overdare. The "Earned" prefix denotes that this BLUC was earned by creators.

We understand that not all creators are comfortable with cryptocurrency, so we're providing seamless redemption options. Creators can redeem eBLUC for fiat currency, to USDC, or convert it back to BLUC. If they choose to convert it back to BLUC, it's simple, and it's handled by Overdare.

If they choose to redeem it for fiat currency or USDC, they do have to go through a 3rd party service: Stripe. Creators will have to setup their Stripe account on Overdare platform. Stripe will perform KYC (Know Your Customer) and AML (Anti Money Laundering) checks on creators. Once the checks are passed, creators can redeem their eBLUC for fiat currency or USDC.

By providing fiat payout option with Stripe, creators won't have to deal with anything crypto if they don't want to.

For USDC payout, we're using Cosmos-native USDC minted on the Noble chain. Stripe will mint USDC on Noble via Circle Mint service, and send it to a forwarding address on the Noble chain. Once the forwarding address receives the USDC, it will forward it to the creator's address on Settlus. This happens almost instantly compared to traditional bank wire transfer, and creators won't have to know anything about IBC or Noble.

You can read more about Noble's x/forwarding module on noble-assets/forwarding. Essentially, the forwarding address is an address that forwards any incoming USDC to a pre-defined chain's address via IBC (Inter-Blockchain Communication Protocol).

To make this payout process possible, legal, and smooth, we have been working closely with the Circle, Stripe and Noble teams. I'm hopeful that this collaboration will accelerate the mass adoption of Web 3.0 by Web 2.0 creators and gamers.

Oracle

Remember the CloneX Example where Bob used his CloneX NFT as an in-game costume?

Settlus' Oracle module allows external NFT (NFTs in other blockchain) owners to monetize their NFTs on Overdare without any bridging or wrapping.

Here is how Settlus Oracle works:

1. Settlus Oracle creates a set of problems for the Settlus validators to solve. These problems are along the lines of "Who owns the NFT with contract_address X and token_id Y on the Ethereum chain?"
2. Each validator queries the external blockchain (in this case, Ethereum) to find the answer to the problem.
3. When they find an answer, they vote their answer via a two phase voting process: pre-vote and vote.
4. If a majority of the validators agree on the answer, the answer is considered correct.
5. Validators who submit correct solutions are rewarded with USDC, while consistently incorrect validators face slashing and temporary jailing.

The voting procedure is split into two phases to prevent validators from copying each other's answers. During the pre-vote phase, validators submit hashed answers salted by a random string. In the vote phase, validators reveal their answers with their salt. If a validator reveals a different answer than their pre-vote, the vote is considered invalid.

Validators will have to run a separate binary that connects to the Ethereum chain and fetches the data. Of course, this binary is open source as well and can be found under chain/tools.

The design of the Oracle module is inspired by Terra Classic's Oracle module. While Terra imploded, their oracle module has been proven to be secure and reliable.

Frequently Asked Questions

If you have read so far, you might some questions. Here are some of the questions I get asked frequently:

Q1: Why Not Ethereum?

"Why not just use Ethereum, Solana, Optimism, or others? Why bother building yet another alt layer one?"

Well, I asked myself the same question. But I believe we have good reasons for building our own app chain.

USDC as Gas Token

Gas fees for recording UTXRs are paid in USDC. If gas fees were paid in SETL, Overdare would be exposed to the volatility of SETL. We do not want to expose Overdare and other platforms that will adopt Settlus to this risk. If credit card fees changed every day, it would be a nightmare for businesses. This is why we chose USDC as the gas token.

Ethereum only allows gas fees to be paid in ETH. By using Cosmos SDK to build our own chain, we were able to be more flexible and choose USDC as the gas token for certain transactions.

Flexibility and Developer Experience

For the past two years we iterated many times to get to where we are now. If we were building Settlus with Solidity on Ethereum or with Rust on Solana, it would have taken much longer to iterate. Cosmos SDK allows us to build our features with , which is a language most of our team is familiar with.

You might say that's just a "skill issue".

Well yes, but also no.

While it's true that Ethereum has way more liquidity and users, Cosmos' developer experience is just so much better. And our plan is to bring users and creators from Web 2.0, so developer experience and iteration speed is more important than liquidity for us.

App Chain

Settlus, in the beginning, will only be used by our own app, Overdare. It's an application specific chain. There is no need to share our game's financial infrastructure with other thousands of projects on other general purpose chains.

If only Overdare uses the chain, it will result in reliable fees, higher performance, and better user experience. We can also customize the chain to fit Overdare's needs.

Q2: Why Not a Database?

You might ask,

"Why not just use a database then? After all, you are just recording transactions and paying creators, right?"

Great question. Roblox pays their creators just fine with a database.

But without a blockchain, how can we easily:

• Ensure that the revenue share is transparent and verifiable?
• Instantly send our creators their revenue share across the globe?
• Create IP trading market and lending protocols for GAME token and License NFTs?
• Allow investment in a promising game or a creator?

So, yeah, that's why we need a blockchain not just a database.

Q3: Can We Deliver?

You might be doubtful when all of this will be delivered, if at all. Building a layer one blockchain, a UGC mobile game platform, and integrating with Stripe and Circle is no small feat.

I vividly remember that back in 2021 and 2022 era, there were a lot of crypto projects that promised to build a game or a killer app for their tokens, NFTs, or blockchain. Well, most of them never delivered. But we are different.

Most of our team comes from Krafton, the video game company behind PUBG. We have the experience and the resources to make Settlus and Overdare a reality. And we are not alone. We are working with Naver Z⁴, the company behind Zepeto, who has a lot of experience in building social games.

We are not like most crypto projects that are just a whitepaper and a fancy landing page.

It won't be easy and there is still a lot of work to be done. But I am confident that we can deliver Overdare and Settlus to the world and achieve our vision of mass Web 3.0 adoption.

Q4: Will It Be Successful?

Overdare needs to be successful to make all those new financial opportunities that I mentioned earlier a reality. But success of a game is almost impossible to predict. There are so many factors that can make a game successful or not.

So if you ask me if this project will be successful, I can't give you a definitive answer. But I am hopeful.

Overdare is a platform, not just a game. During the first few months or even years, Overdare might not have many users or creators. Roblox has over 40 million games in its platform! It's going to take a while for Overdare to get there. Hell, Roblox almost took ten years to become the success it is today.

However, Overdare has a trick up its sleeve that Roblox does not have: 💪 crypto bros (and gals).

Normally, game publishers spend millions of dollars on marketing to get users. But by harnessing the power of crypto community, I believe we can bootstrap initial users and creators without a crazy marketing budget. Airdrop farmers, DeFi degens, and NFT traders are all potential users and creators of Overdare.

To prove my point above, most of the users in Overdare's Discord server are from crypto community. And I love them saying "GM" every day.

While I can't predict the future, I am hopeful that Settlus and Overdare will be successful.

Q5: Tokenomics

Settlus has its own native token, SETL, which serves as the gas token of the network.

As outlined in our whitepaper:

Block reward is the only method of issuing SETL.

This means that there will be no pre-mine or ICO for SETL. Only validators will be rewarded with SETL.

Initially, Settlus will operate as a Proof of Stake Authority (PoSA) chain. We are going to start with a well-known and reputable set of validators. We're fully aware that decentralization is key for a sustainable blockchain. However, working with a small set of validators in the beginning will allow us to iterate and improve the chain quickly.

Once we're confident in the chain's stability and security, we will transition to a fully decentralized Proof of Stake (PoS) system.

Future Plans

We've got a lot of work ahead of us. The Settlus blockchain is still in development and currently in the Testnet phase and Overdare needs more development.

There are some problems I wish we do better in the future:

Marketing

We are mostly devs and have no experience in marketing or community building. I regularly chat in Discord and Telegram, but I have never personally run Discord server or Telegram group. Oh, and Twitter, I have no idea how to use Twitter properly. I just like memes and follow cool devs and crypto people.

If you, the reader have any tips on crypto community building or marketing, please let me know. @ me on Twitter or something. I am @jacobhjkim on Twitter.

Gas Token Distribution

For users to trade License NFTs and GAME tokens, they will need SETL as gas. My concern is that it might be hard for users to get SETL until we get listed on exchanges. Some tokens or coins get listed on centralized exchanges (CEXs) on day one, and I am clueless how they do it. I guess this is why most projects start with a big airdrop. 🪂

Onboarding More Platforms

Overdare is the first to adopt Settlus, but we want more platforms to adopt Settlus. I think IP platforms like comics, music, and video streaming platforms can benefit from using Settlus. We are in talks with a few platforms, but it's a slow process. Especially because we are a new project without an established track record. Overdare needs to be successful for other platforms to realize the potential of Settlus. So Overdare and Settlus are kind of in a chicken and egg situation.

Education

Overdare need to educate creators about using crypto wallets, NFTs, and more. Overdare will try its best to make the onboarding process as smooth as possible. But we do need to make more educational content readily available for creators who are new to crypto.

Closing Thoughts

I think the crypto industry has been too focused on infrastructure and not enough on applications. And it seems like many people in the industry agree.

mert | helius.dev

@0xMert_

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sick of there being barely any apps in crypto have been saying it for years now there're still too many problems — where do you build? why? how? what's the barrier to entry? what are the nuances? how will you store data? no one has time for this the next mission of…

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Zero knowledge proof, rollup, data availability, liquid restaking, etc., big brain stuffs are cool and all. I am sure they will be essential for the future of blockchain.

But what's the point of building all these great infrastructure if no one is using it? In 2024, I wish I can see more projects like Polymarket or Pump.fun that are actually used by many people.

I hope this blog post has given you a better understanding of Settlus. Thanks for your interest in our project and reading this long blog post. Our team and I have been working hard for the past two years to make Settlus a reality. If you have any questions or feedback, please feel free to reach out to me on Twitter.

References:

¹: https://en.wikipedia.org/wiki/Roblox

²: https://creators.rtfkt.com/feature-articles/3d-files-2-0

³: https://en.wikipedia.org/wiki/Vitalik_Buterin

⁴: https://press.krafton.com/