#ALEO# The DC technical conference is paused, and we need to solve this problem first!!!! The gas fees are too high, hindering the development of applications!!!

Puzzle Arcade is currently the platform with the highest consumption of $ALEO on the network. Puzzle is bringing merchants on-chain through Puzzle Arcade, which currently has over 100,000 users, 30,000 monthly active users, 10,000 weekly active users, and 3-day active users. Puzzle Arcade provides a way for users to play games daily with friends, win tickets, and then shop with those tickets at merchants introduced on-chain through the Puzzle for Business department. Puzzle is a self-sustaining business with an operating model similar to a $4 monthly subscription service (no free trial mode—only a free trial period), and it has a positive CAC/LTV ratio, achieving a 2-month payback period through its own endogenous growth channels.

*Background Information: Why ARC05 Became a Necessary Element of Puzzle*
After launching a large-scale growth initiative in the second quarter, Puzzle Arcade encountered issues with the inventory operations of arcade stores. The best and fastest solution we found was to introduce daily giveaways based on user demand, which could convert store inventory — this is also what merchants expect, as they prefer the verifiable giveaways we offer over the unverifiable ones provided by TikTok/Instagram, which leave users feeling dissatisfied and calling it cheating. This feature was developed in April/May, released at the end of May, and stabilized in June. The feature was very popular — we observed improvements in user comments, a reduction in negative user feedback, very positive user feedback on Discord, a significant increase in user retention, and improvements in conversion rates. However, after a month of use (in July), we noticed that this feature actually increased the average spending of Puzzle Pro subscription users by over 5 times (from 0.9 ALEO per month to 4.4 ALEO per month, reaching even 5 ALEO per month).

Demand is a significant issue, but even if Puzzle's validator staking fees are used for the staking of 22 million $ALEO, Puzzle cannot generate $ALEO quickly enough to cover the consumption of $ALEO due to the launch of new features/products. Puzzle consulted the community about the feasibility of charging a higher monthly subscription fee ($4/month), but this move was not well received due to the expected high user churn rate (as users find the product too expensive).

We actually foresaw this issue in the first quarter and started working with Provable to plan the scope of ARC05 from March. Although the features we are using in Puzzle Arcade have not yet fully utilized the nodes, we have verified with the team in March/April that it is feasible to reduce the costs by 90%, which will allow Puzzle Arcade to significantly scale up its activities.

In mid-July, the development of Puzzle was so rapid that it had to temporarily stop or limit growth initiatives until this ARC could be approved and implemented, or an alternative solution could be found.