Metaverse: Prospects for Monetization and Scaling

Subscribers, please accept my apologies for the long break in publications. Being from Odessa since the end of February 2022, the former way of life was destroyed by the new military reality, under which it was necessary to adapt and continue living despite all odds.

Like Web3, the concept of "metaverse" does not yet have a clear definition. The Metaverse is a computer simulation of a 3D world using virtual and augmented reality tools. It is assumed that it will be possible to spend almost a whole day in this computer world. In addition, the developers promise high realism and functionality to engage in almost any activity - from some kind of business activity, meetings, or virtual offices to any goals, gyms, meetings, and maintaining relationships across the universe. This is all we are promised by the key leaders of this sphere. In other words, the metaverse is a parallel digital universe that exists in parallel with the real world. Also, there are many different ideas about what it will look like, and even disputes about whether it already exists today.

In the most idealistic view, the metaverse is a virtual world that offers an experience parallel to the real world, with the potential for empowerment, similar to the artificial world of The Matrix. In more realistic representations, visitors to the metaverse use sophisticated motion-tracking mechanisms and VR headsets to physically interact in the virtual world, where they take on the form of virtual avatars, play games, and live pseudo-anonymous lives. Sometimes, as evidence that the metaverse is already with us, we can cite the existence of digital goods that belong to users and have the properties of rarity, value, and history that are traditional for the real world. Some argue that the metaverse exists in the human relationships, feelings, and experiences that make up our digital lives on individual social platforms, in video games, and so on.

However, despite these disparate views, the basic concept of the metaverse is clear. Remote presence, defined as an immersive state that allows a person to feel alive in a virtual space, is the key to creating a metaverse. Whether it's a combination of immersive AR and VR technologies, user-owned and blockchain-powered digital goods, or simply an addictive massively multiplayer online role-playing game (MMORPG), the metaverse manifests itself in our ability to create virtual worlds that make us feel real - maybe even tangible - in the digital environment.

Entering the Metaverse

The metaverse exists around us quite realistically. Early experiments in MMORPGs such as Second Life and World of Warcraft introduced the concept of gamified social platforms that players deepen in the game so much that digital items, from weapons and clothing to in-game houses, had tremendous real value. Existing social media platforms such as Facebook, Instagram, and Twitter have allowed the creation of pseudo-anonymous Internet avatars and interactive virtual rooms where users come to share news, discuss information, and connect with friends. Whether it's hanging out on Twitter Spaces, chatting with co-workers on Zoom, or playing multiplayer games, people are fully immersing themselves in the digital world through an external screen. However, there are new technologies that can give the digital world more meaning, durability, and realism.

An important factor contributing to the expansion of telepresence, which will lead to the development of the metaverse, will be our ability to reproduce the human experience. VR headsets and motion-tracking devices can play a key role in this, enabling the creation of increasingly realistic images that create a state of complete sensory immersion. While VR aims to create an immersive virtual world separate from physical space, AR adds virtual displays to physical reality. One compelling example currently in existence is Microsoft's HoloLens, an AR headset that tracks both what we look at and our body movements to overlay virtual images and icons, allowing for compelling use cases that can help us navigate, identify objects, and virtually interact with the physical world.

Imagine a world where you can put on AR glasses to see which virtual shoes a person has chosen to wear that day or play games on a completely virtual screen on your desk. This is the purpose of AR - a seamless combination of the virtual and the physical to enhance daily life in exciting, functional, and original ways. AR and VR are inspiring technologies that have a role to play in developing experiences that shape the future vision of the metaverse. However, interactive and immersive experiences are only part of the puzzle; the metaverse will require the creation of a full-fledged technology layer, relying on decentralized infrastructure such as blockchain, to empower users as well as platform developers in creating the metaverse. Ultimately, this will help users of the metaverse define its shape, giving more content to the digital universe with verifiable digital items, and helping users feel meaningful in an intangible, digitized space.

Current problems in the metaverse

There are aspects of the current experience of the metaverse that prevent immersion in the game. Players and users are constantly reminded that the current state of the metaverse does not belong to them to develop and build, but to those who create this experience for them. For example, players cannot take their rare sword from World of Warcraft, sell it, and then buy a house in Second Life, and activity is limited to centralized platform owners. Twitter is separated from Instagram; while there are social channels linking them, there is no formal transfer of information or value between them as they are created by separate companies. Instead, they exist in limited, isolated spaces that are more like a meta-room than a complete metaverse.

Ideally, the further development of the metaverse would bring together all disparate ecosystems that have independent value into a single cohesive virtual environment defined by the seamless interaction between each aspect to create a whole that is greater than its parts: an open world where people can coexist in a shared virtual environment, networks, rather than in a disparate ecosystem where individual networks are separated from each other by disparate hardware and software, geographic locations, and boundaries created by competing organizations. A system operating in this way will be a real parallel reality built through virtual space. You can own goods, present yourself as an identifiable avatar, and navigate the virtual world just as you would in the physical world. The concept of an interconnected system of metaverse applications, experiences, and digital goods is already underway and is being built with a combination of blockchain technology and decentralized oracles.

Possibilities and monetization

As a public network not controlled by any entity, blockchain has inherent advantages in composability and transparency over traditional systems. On the blockchain, everything from gaming projects and Defi protocols to art collections in NFTs is connected by an underlying infrastructure that allows value to be transferred seamlessly and quickly build proven economic models that embody the properties needed for the metaverse: true ownership and interoperability.

Today, the world's largest companies deliver digital goods through a fee-based business model. Users do not own the music they listen to, the movies and shows they watch, or even the accounts that their virtual characters represent. All this is rented by the user through a subscription fee or hidden costs, usually in the form of advertising or the collection of personal data. Through blockchain, cryptocurrencies, and NFTs, verified digital ownership is enabled, whereby users can buy and sell their digital goods as they please. This is the main catalyst for the metaverse and the user-owned meta economy. Digital goods can exist outside of the projects that create them and persist if the project fails, much like you can own old shoes from a company that has closed.

With the help of the blockchain, for the first time in history, users have been able to own a digital product in the same way as DVDs, clothes, or any other physical product. Currently, in blockchain networks, there is a unique distinction between transferable digital ownership and leased digital ownership. After being transferred to the user's digital wallet, tokens or NFTs become his property. This promotes immersion in the metaverse, as NFTs develop the concepts of digital permanence and identity in the virtual space, mimicking the invisible social framework that makes up our physical reality and creating a comparable parallel between the physical and the digital, which is likely to contribute to the illusion of a digital universe.

Another hallmark of blockchain networks such as Ethereum is their unrivaled interoperability. All projects built on the blockchain are able to interact with each other thanks to a common underlying infrastructure, which leads to the creation of connected ecosystems that create a unified user experience. With blockchain technology, users can borrow on Defi protocols, play income-generating games (“play-to-earn” games), and buy NFTs, all on one single platform. In each case, the user gains access to an interconnected ecosystem where NFTs can be traded for loans, or where gaming revenue can be used to buy NFTs. Since everything happens on the blockchain network, there is internal interoperability that allows the user to harmoniously use the blockchain-based online experience, which is an essential piece of the puzzle for creating a coherent metaverse.

Today, many metaverse platforms are blockchain-based virtual reality, also accessible from mobile devices and desktops. Metaverse users can purchase individual pieces of "land" in the metaverse, interact with other people through digital avatars, and access a variety of user-created social activities. It is one of the first blockchain-based metaverse experiments, combining true ownership and gamified social functionality with blockchain interoperability. Digital landowners can now host virtual events like concerts, lotteries, and more in an experience that combines aspects of the early Second Life metaverse and the popular VR game VRChat. However, unlike these one-to-one events, users can sell their land to participants, empowering and increasing users' income, which is similar to buying land in real life, only on a digital medium.

How to profit

Earnings in the metaverse are no different from the real ones. After all, any community here consists of the same people as in real life. It's just that there are more opportunities in the metaverse and it looks brighter.

? Shopping. In the metaverses, things of world brands are popular. Chanel and Armani are already mastering virtual spaces and selling digital analogs of clothing for more money than in physical stores. For metaverse neophytes, this business can be very promising.

? Art objects. The same as with clothes, but you will sell pictures, photos, and videos. You can also sell game characters: complete monsters from Axie Infinity cost hundreds and even thousands of dollars.

? Mining. In the same Alien Worlds, you can mine and earn a TLM token.

? Resale of land lots. A high-risk way to earn money, and so far, it is considered the prerogative of big investors. One of the most expensive deals at Sandbox is a $4,300,000 lot.

Scaling the possibilities of the metaverse

What is important for the metaverses to become a truly mass adoption? For this, we need the following:

? Devices. Smartphones have become the catalyst for the development of social networks. The same is true in the case of the metaverses: it is necessary to mass-produce devices for interacting with the VR headsets, tactile gloves, projection systems, sensors, etc.

? Network. We remember that the metaverses must work constantly, in real-time, and provide access to millions of users at the same time. This requires high bandwidth and decentralized data transmission;

? Calculations. In addition to speed, the power of the equipment is also important - for processing the physics of objects, rendering, coordinating, and synchronizing data with artificial intelligence, projections, motion capture, etc.;

? Platforms. Modern platforms are at an early stage of development. The ultimate goal is for users to be able to interact with metaverse platforms as comfortably as possible. The path will be long and thorny, but possibly very fast.

? New standards. For the development of metaverses and the interaction of users with each other, as well as for the development of Web 2.0 of the Internet, new formats, services, engines, and other mechanisms will be needed. They must support copyright, data export/import, rendering technologies, AI, and physics;

? Payments. Metaverses are not just new generation social networks. It's a whole new economy. It needs decentralized payment services and other financial instruments that can cover the needs of this virtual world and its users;

? New content. For metaverses to become mainstream, they must be filled with new kinds of content. Such content can not only be created in a special way, but also sold, bought, stored, and so on. We also need a new system for managing digital assets within the metaverses;

? User behavior. Well, and most importantly, humanity must massively learn how to interact within the metauniverses. This will require an unprecedented pattern of interaction between people, companies, and brands. How long it will take is hard to say. Perhaps we are already living in a new reality, but we do not yet know about it.

Resume

Over the past few years, the metaverse has evolved from a fantasy future depicted in various works of fiction to a reality that actually exists. The groundwork has been laid for the next set of immersive metaverse applications to emerge, and the core technologies behind them are steadily evolving. It's impossible to tell if we'll see a dystopian reality like that depicted in Avalanche and The Matrix, or a gamified virtual world full of retro references like Ready Player One. Perhaps the metaverse will take on a form that we have not yet imagined. As the future state of the metaverse is yet to be determined, developers, designers, users, and dreamers will need to create a user-owned digital universe that is defined by decentralization, immersion, and connectivity.

Written by Sergey Golubev (Сергей Голубев)

Crynet Marketing Solutions, vtorov.tech, EU structural funds, ICO/STO/IEO projects, NGO & investment projects, project management