Making Sense of the Open Metaverse
… where we are now and why true openness is still just a theory
It feels like the term ‘Metaverse’ has been thrown around the internet for quite some time now. One day you read about blockchain-based virtual worlds and play-to-earn games, the other day you read about traditional players such as Meta (formerly Facebook) and Fortnite entering the space. In this article, I teamed up with my friend Jane (@ Jane Chen) to map the current state of the metaverse. We argue that there are significant differences regarding the openness of current metaverse projects and that a truly open metaverse does not yet exist.
When asking Silicon Valley’s leading tech entrepreneurs about their favorite sci-fi book, you would most likely come across Neal Stephenson's Snowcrash. In the novel, the main character Hiro has low self-esteem and spends his days delivering pizza in Los Angeles. But in a parallel virtual world, he is a superhero saving the world from a deadly computer virus.
“It won’t pay the rent, but that’s okay — when you live in a sh*thole, there’s always the Metaverse, and in the Metaverse, Hiro Protagonist is a warrior prince.” -Snowcrash-
Written in 1992, the novel was not only one of the most famous sci-fi books ever written but also a source of inspiration for Jeff Bezos, Elon Musk, and Larry Page. Most notably, Stephenson coined the term Metaverse to describe a virtual world in which people live, socialize, and work.
To gamers, the metaverse has existed in the form of multiplayer online role-playing games since the early 2000s. Some popular titles in this genre include; Second Life (2003), World of Warcraft (2004), Minecraft (2011), and Fortnite (2017). These games all contain the fundamental features of a “metaverse,” including an in-game economy, multiplayer with more than 20 players per session as well as highly interactive gameplays.
What started as full gaming experiences soon expanded to interactive events. In 2019, Marshmello held the first-ever live concert on the Fortnite platform, attracting 10 million attendees. In April 2020, Travis Scott hit a new record when 27.7 million unique attendees viewed his five Astronomical concerts in Fortnite a total of 45 million times.
In October 2021, Mark Zuckerberg announced Facebook’s rebrand to Meta, underpinning efforts to become a ‘Metaverse’ company. All these events serve as precursors to a digital world that merges Stephenson’s fictional Metaverse with the real world.
So where do we stand now? Let’s take a look at the market map.
The Metaverse Market Map
Note 1: Many of the startups/projects listed straddle multiple categories. For simplicity, we have selected the category for which each fits best.
Note 2: This is not an attempt at including every single startup/project, rather, at providing an overview of the most prominent payers in each category. Criteria for selection were, if applicable, transaction volume (USD), VC funding dollars, and media coverage.
Note 3: We are planning to update the map on a regular basis. If you feel that we’ve missed an important project in this space please reach out and we’ll add it to the next version.
A Distinction: Open vs. Closed
When looking at the market map it becomes clear that a key distinction has to be made between Open and Closed Metaverses.
Excellent articles have been written here and here on the topic in-depth. But we believe the three tenets of Open Metaverses can be summed up as:
- Decentralized control where participants hold meaningful stakes
- An open financial system with provable ownership (e.g through NFTs)
- Platform interoperability — both between Web3-Web3 and across Web2-Web3
First, the metaverse must be an open ecosystem, not an ecosystem dominated by the whims of any single company. Digital property rights are the building blocks of an Open Metaverse — rights in both platform ownership and governance. Ownership is possible through social tokens or non-fungible tokens (for a deep-dive on NFTs check my last article here). Heavily decentralized control can be facilitated through blockchain technology and built on community-decided standards and protocols.
Second, an open financial system means that users are able to create, buy, sell, and, most importantly, own assets within the ecosystem. Digital property rights act as building blocks of the Open Metaverse because they allow provable ownership. With NFTs, provable ownership of digital goods becomes possible and the underlying blockchain infrastructure confers security, authenticity, and the promise of mobility across other applications.
Last, Interoperability is a fancy way of communicating full digital immersion. The NFT dress purchased on OpenSea can be worn on Fortnite, which can then be gifted to your pixelated avatar on Gather. One’s digital belongings and associated emotions, identity, metadata, follow individuals as they bounce from metaverse to metaverse. The more cross-platform pollination and the wider accessibility there is, the richer the collective experiences will be.
Semi-Open (or Semi-closed?) Metaverses
Openness is not an absolute but rather a sliding scale. Being a fully open metaverse is dependent on the underlying blockchain technology, which comes with limitations around speed, access, and interoperability. Going with the three tenets above of a fully open metaverse, it is difficult to claim any platforms can be categorized as such.
Meta would be what we would categorize as a closed Metaverse. Ownership of Meta itself is concentrated in major stakeholders, and even user-generated data is owned by Meta, despite what is outlined in the terms and conditions. Interoperability between Meta’s owned assets does not exist, much less between Meta and other platforms.
Take Decentraland — arguably the most open metaverse approach project thus far — where land built on blockchain-based ledgers is owned by the community, handing over full control to users. This satisfies tenet #1 of our definition.
“Unlike other virtual worlds and social networks, Decentraland is not controlled by a centralized organization. There is no single agent with the power to modify the rules of the software, contents of land, economics of the currency, or prevent others from accessing the world. “ (Decentraland Whitepaper)
In Decentraland, ownership of virtual land is purchased and sold in the form of NFTs. NFTs prove digital land ownership, and owner wallet addresses can be viewed at all times. This is satisfying tenet #2 of our definition.
Interoperability, however, is where Decentraland falls short. Players can only create Decentraland-approved avatars, which only live on Decentraland spaces. NFT wearables must be minted on Decentraland’s platform, which can be sold on various platforms, including Decentraland Marketplace and Opensea.io, only to be brought back into the Decentraland metaverse. The platform is closed to outside avatar models and digital fashion is recycled within a closed ecosystem. Tenet #3 is breached.
The same holds true for other blockchain-based metaverse projects including The Sandbox, Somnium Space , Cryptovexels, and OVR.
The Path Towards an Open Metaverse
What, then, needs to be done to create a truly Open Metaverse? Being open can not be decided on by a single entity; participants must agree to an open-source structure. Players like Decentraland cannot be truly open just as Ethereum cannot single-handedly control where and how digital fashion assets are traded and worn.
As seen in the case of Fortnite and other multiplayer games, “openness” needs to originate at the developer level, not simply at the game platform level. All ecosystem participants, both upstream and downstream, need to commit to the three tenets of decentralized control, user ownership, and interoperability required for “openness.”
In effect, the path towards an open metaverse is still long, uncertain, and full of challenges. Will we even have a truly open metaverse with platform interoperability in the future? Or will most web3 projects remain semi-pen?
Will centralized Web2 giants such as Meta or Microsoft continue to shape the way we live, work, and interact? Is there a standard identity layer, or will users need to port their identities from one metaverse to another? Can a metaverse exist on top of current internet architecture or do we need something entirely new? Will there be one or multiple metaverses or only a single one like in Snowcrash?
We’ll find out soon.
I hope this article helped to spark your curiosity and enthusiasm for the (hopefully) open metaverse. If you have comments and feedback- or simply want to say hi- I’d love to hear from you on Linkedin or Twitter.
I had a lot of fun writing articles around the topic of Web3 this year and really found my passion within this space. There is a lot planned for 2022, stay tuned! And, last but not least: Happy Holiday Season 🌲
