The metaverse represents the dematerialization of physical space, distance, and objects to connect users in all walks of life. This disruptive innovation will create unique virtual experiences and economies that are only held back by our imaginations.
Facebook’s rebranding to “Meta” brought tremendous attention to this arena, but the idea behind the metaverse is not particularly new. Even in the present day, we interact with the metaverse by way of 3D games, virtual reality (VR), Zoom, and Clubhouse on our phones (Radoff, 2021). The advent of Covid-19 in March 2020 rapidly accelerated this trend. Now, people are now markedly more comfortable with digital reality.
The metaverse seems likely to be the next frontier of online interaction, and the industry is projected to go mainstream over the next 5-10 years. Potentially, metaverse projects can capture trillions of dollars of value. As we said earlier, the only limit to its application is our imagination.
In the metaverse, users can create digital identities and transfer value virtually. The idea is to have a digital life akin to real life. Additionally, metaverse users can maintain unique experiences (that are impossible in the real world) — such as designing a personal avatar, traveling to different metaverses, and augmenting virtual workspaces.
This new revolution will bring disruptions to several facets of our daily lives. Increased decentralization can enhance the creator economy by allowing for digital asset ownership through no central authority.
One can argue that virtual experiences already exist in the form of online interaction like Fortnite, Grand Theft Auto 5, Zoom calls, and Clubhouse. However, the purpose driving new technologies is a movement towards a more immersive and real experience. Essentially, the metaverse will allow people two interact with two lives — one digital and one virtual.
Metaverse technology will provide an opportunity for users to create value in virtual reality that can be harnessed in the real world. To picture this, imagine a play-to-earn (P2E) game where the user earns crypto that can be exchanged for fiat value in the real world. Games like these have already gained tremendous traction. Consider Axie Infinity as a leading example here.
Not only is Axie Infinity’s cryptocurrency (AXS) the 24th highest-ranked crypto on CoinMarketCap, it is also perhaps one of the largest growth drivers of economies like Vietnam, where people have quit their jobs to play Axie Infinity and make a living in the process.
The creator economy will be transformed by the metaverse. Creators currently showcase their work on venues like YouTube and Instagram, and can create e-commerce stores where people can shop their items. With further developments in the metaverse, howver, these experiences will be far more immersive.
Users can own land in Decentraland and build a virtual boutique store to showcase their items, such as perfumes, bags, and sunglasses. Audiences can look and feel like they are physically interacting with these products. Owner avatars can interact with their customers and have a virtual experience with them before a physical experience.
This virtual dynamic allows for a more immersive experience. As an example, consider the case of Boson Protocol, which recently spent $704,000 to launch a virtual mall in Decentraland to showcase apparel.
Pixlr Genesis is building one of the world’s biggest art museums, and they’re doing it in a decentralized manner. Currently, we are only just seeing some of the earliest metaverse applications. As this trend continues, we can reasonably expect to see virtual schooling, doctor appointments, and even virtual fitness taking place.
Decentralization can usher in a new metaverse economy where control and decision-making are distributed away from a central party, which creates more value for everyone. After the 2008 economic collapse, Satoshi created Bitcoin in hopes of creating an egalitarian society. In 2015, Ethereum emerged as an improvement on that philosophy. Seven years later, blockchain technology is growing faster than the dot-com industry did at its peak. Crypto is growing rapidly with an adoption rate of some 113% annually. A decentralized metaverse can really be the alternate reality that leads to enhanced crypto adoption, as well as a virtual economy operated in an egalitarian and decentralized fashion.
The infrastructure layer is where the technology will enable devices to connect to the network. 5G networks could currently be the internet to power the metaverse network. A decentralized 5G network (like the one powered by Helium) provides an opportunity for users to easily offer internet service to power metaverses in a decentralized manner.
Another infrastructure network is Render, which is currently the leading provider of decentralized GPU rendering solutions and revolutionizing the digital creation process. Render’s technology lets content creators tap into a vast pool of graphics cards from an online peer-to-peer network, that can transform a 2D or 3D computer model into a photo-realistic rendering for augmented reality. Rose can also be a key metaverse infrastructure layer. Rose enables privacy on cloud computing, necessary for metaverse projects. Additionally, Rose in in an AI partnership with Meta (“Facebook”), which is leveraging its technology to build its own metaverse.
The metaverse experience will likely transform our reality in a decentralized fashion, but that reality currently is being challenged by some big players. Facebook has sufficient resources to create its own Metaverse successfully. Nvidia is also a pioneer in this space, with a product called Omniverse, where artists can work together across leading software applications in a shared virtual world from anywhere on the globe (Johston, Kasia). But these corporations are building their metaverses in a centralized manner.
We are currently seeing hundreds of new metaverse projects come up. Some have gained tremendous market share, like Decentraland, Sandbox, and Axie Infinity. However, there are still many promising gems that are just beginning to carve own niche. Some hidden gems that may have significant upside are shown below:
Top market cap metaverse indexes and price when Token Metrics covered them.