The Blockchain Metaverse

A Metaverse is some alternate computer version of our Universe.  One of the earliest manifestations was Second Life which came on-line in 2002 and is still running.  More recent entries into the field such as Decentraland and The Sandbox offer the same sort of experience but within a Blockchain platform and using bespoke crypto currencies.  The Sandbox uses SAND and Decentraland MANA; both Ethereum based currencies.  The currencies can be used to purchase and sell in-game assets; NFTs residing on the same Blockchain.

The web interfaces of these platforms have a graphic quality reminiscent of the 2000s little better than Minecraft, background visual updates are slow and moving around with keys such as ‘WASD’ is clumsy.  To the very casual user lining up an Avatar to go through an opening or up a staircase is painstakingly slow.  None of this compares well with the overall user experience from recent computer games or CGI film graphics.   Nevertheless the platforms are being used.  DappRadar reported that Decentraland had 517 and The SandBox 10 unique active user wallets interacting in the past 24 hours (data from Monday 6th September 2023).  A study of the demographics at Decentraland shows that the majority of users are from Mexico (17%) followed by the USA (16%) and Russia (7%).  Users are 82% male, 69% are under 34.  437,000 visitors to the site were reported in the last month to date (Monday 6th September 2023) but with a bounce rate of 37%.  Comparing this to the number of active users shows that only a tiny proportion of site visitors have any meaningful interaction with it.

An initial investigation of these offerings reveals a niche market.  Although free to join there is limited external exposure to their content without becoming a member.  The reader might have only limited interest in interacting with these platforms; from a business and Intellectual Property perspective what they do and how they do it needs to be monitored.  Some companies have dipped their toes into the Metaverse.  Disney briefly employed a Metaverse team of 50 but wound it down in March 2023 as part of an alleged streamlining process.  Conversely McDonalds launched McNuggets Land on The Sandbox.  McNuggets Land promises games and prizes although the chicken nugget prizes are only redeemable in Hong Kong where this promotion is based.  Having a presence on a Metaverse will require buying some space or ‘Land’, NFTs to dress it up and programming expertise to make the solution good enough to stand out and have people interact with it.  The Sandbox has its roots in smartphone apps and games claiming that ‘amazing games’ can be created, launched and monetised on their platform.   Much of the financial outlay is within the closed economy of the in-game currency through which the engine creators will charge a commission on trades.  Users will have the expectation that money can be made through trading in-game NFTs and sponsored content.  This money will be in the form of bespoke crypto currency.  Any real-world profit or loss will depend on the US$ trading value of that currency.  This in turn relies on the demand to buy in from users and the volume of new crypto currency units issued by the chain controller.   This is a system that can go predictably wrong; for example the Axie model.  On the other hand we could be seeing the beginnings of something significant.  In either case it would be unwise to ignore what could be going on within these closed systems.  It will be much easier to stamp down on any unauthorised activity such as Intellectual Property theft or fake news while the platforms are evolving and before they become too unwieldy to deal with.

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