 ACROSS THE METAVERSE |
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Billions of dollars are flowing into the metaverse, but crucial questions remain
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From Facebook’s name change to virtual real estate selling for real-world sums, the “metaverse” has become one of the moment’s defining buzzwords and crypto storylines. As projects focused on the metaverse are busy raising billions of dollars in venture funding, it’s worth taking a few minutes to drill down on some basic questions. What parts of the metaverse are connected to crypto? Are we all saying the same thing when we use the word, or are there many competing visions? Let’s take a closer look. |
- Every company seemingly wants a piece of the metaverse, a market some analysts expect to be worth more than $800 billion. Why? As Coinbase CEO Brian Armstrong describes it: “The earliest version of the internet, Web1, was about accessing static web pages. Web2 is about interactive, social experiences within closed ecosystems. And Web3 will be about digital ownership within an open, decentralized environment. The Metaverse is the distant evolution of Web3.”
- There are many competing visions for how we’ll get there, and not all of them are connected to the crypto ecosystem. The hugely popular multiplayer game Roblox, for example, has attracted the likes of Nike and Paris Hilton to build virtual experiences on the platform. But Roblox lacks interoperability, meaning players can’t use their characters or items in other virtual worlds. Blockchain-powered virtual-world platforms like Sandbox and Decentraland (which have also attracted big brands like Adidas and Samsung) are aiming for an open metaverse in which NFTs, digital real estate, and virtual identities flow seamlessly across virtual worlds and markets without the need for intermediaries.
- Microsoft’s $69 billion acquisition of “Call of Duty” maker Activision is being called a metaverse bet by company leadership. Meanwhile Blockchain gaming firm Animoca Brands just raised over $350 million to advance its mission of building an open metaverse that brings digital property rights to users via blockchain tech and NFTs. Nvidia, a leading gaming chip maker, just unveiled Omniverse — a.k.a the “metaverse for engineers” — which is a collaboration platform that allows engineers and designers to work together on projects in virtual worlds.
- Walmart is planning a metaverse foray, featuring its own cryptocurrency and NFTs. And major fashion brands like Ralph Lauren and Gucci have signaled that virtual clothes for digital avatars is going to be a major area of business growth. Even the NBA is experimenting in the metaverse, with live games available to watch in virtual reality via Meta’s Oculus Quest 2 headset.
- The smart-contract compatible Solana blockchain is emerging as a favorite for metaverse developers. The Metaplex Foundation, which is aiming to expand the use cases of Solana NFTs, just raised $46 million from investors including Michael Jordan. Meanwhile, Solana Ventures, the strategic investment arm of Solana Labs, recently announced a $150 million fund aimed at funding blockchain-based gaming.
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Why it matters… As we hurtle toward “Ready Player One”-style virtual lives, many questions remain — from technological obstacles to basic questions around whether the metaverse will be built on open, interoperable Web3 protocols or consist of a series of “walled gardens,” or closed ecosystems. Amid all the buzz — and the inflow of venture funds — it’s important to remember that these are very early days, particularly for the metaverse’s more experimental and open neighborhoods. Decentraland, for example, recently sold a plot of virtual land for a a record $2.4 million — but it averages fewer than 2,000 users at any given time.
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