Billions of dollars eject into the metaverse
The “metaverse” has become one of the defining buzzwords and crypto narratives of the time, from Facebook’s name change to virtual real estate selling for real-world money; while projects focusing on the metaverse are raising billions of dollars in venture capital, it’s worth delving into some fundamental problems. What components of the metaverse are crypto-related? Is it true that when we use the word, we’re all stating the same thing, or are there other interpretations?
- Expected to exceed $800 billion as every company wants a piece of the metaverse as per some market analysts. And why is it so? Web 1 was the first internet version, and it was all about accessing static web pages. Within closed ecosystems, Web2 is about interactive, social experiences. Web3 will be all about digital ownership in a decentralized and open environment. The Metaverse is Web3’s distant descendant.
- There are numerous competing perspectives for getting there, and not all of them are linked to the crypto ecosystem. For example, the enormously popular online game Roblox has attracted brands such as Nike and Paris Hilton to create virtual experiences on the site. On the other hand, Roblox lacks interoperability, which means that gamers cannot utilize their characters or things in other virtual worlds. Sandbox and Decentraland (which have attracted big brands like Adidas and Samsung) are blockchain-powered virtual-world platforms striving for an open metaverse in which non-fungible tokens, digital real estate, and virtual identities can flow freely across virtual worlds and markets without the use of middlemen.
- Microsoft’s $69 billion acquisition of Activision, the maker of “Call of Duty,” has been dubbed a “metaverse bet” by the company’s leadership. Meanwhile, Animoca Brands, a blockchain gaming company, has received over $350 million to further its objective of creating an open metaverse that gives consumers digital property rights through blockchain technology and NFTs. Nvidia, a renowned gaming chip manufacturer, recently announced Omniverse, dubbed the “metaverse for engineers,” a collaboration tool that lets engineers and designers collaborate on projects in virtual worlds.
- Walmart is getting ready to enter the metaverse, complete with its own currency and NFTs. And prominent design houses such as Ralph Lauren and Gucci have hinted that virtual clothing for digital avatars will be a big industry. The NBA is also dabbling in the metaverse, with live games streamed in virtual reality using Meta’s Oculus Quest 2 device.
- The Solana blockchain is quickly becoming a popular choice among metaverse creators, compatible with smart contracts. The Metaplex Foundation recently raised $46 million from investors, including Michael Jordan, to broaden the application cases of Solana NFTs. Meanwhile, Solana Ventures, Solana Labs’ strategic investment arm, recently unveiled a $150 million fund to support blockchain-based games.
What’s at stake… Many issues remain as we speed toward virtual worlds akin to those in “Ready Player One,” ranging from technological challenges to fundamental questions like whether the metaverse will be built on open, interoperable Web3 standards or a series of “walled gardens,” or closed ecosystems. Amid the excitement and the influx of venture capital — it’s vital to remember that the metaverse’s more experimental and open communities are still in their infancy. Decentraland, for example, recently sold a virtual parcel of property for a world-record $2.4 million, but it only has about 2,000 users at any given moment.