The Metaverse hype was already getting tired, but the Facebook name change to Meta really stretched it thin. Every project on Opensea now promises some type of metaverse experience in their “roadmap”. Why? And what is the metaverse exactly?
Well, the answer to that question is still unfolding and there will certainly be many instances of it, but two types: centralized and decentralized. The term “Metaverse” was first coined in the book “Snow Crash” by Neal Stephenson in 1992. It was used to describe a dystopian, virtual matrix-like structure that was owned and operated by a shadowy, quasi-corporation. Sound familiar? Well, I have spent the past 6 months “in the metaverse”, and here is what I have discovered.
The pioneers in the Metaverse at the moment, the early adopters, vehemently refuse to participate in a Facebook version and instead want full transparency and control of projects governed for and by the community. See, to even “get to” the Metaverse necessitates knowledge of how to interact with blockchain technology and defi protocols to some degree. That’s because everything is tokenized in the Metaverse. Whether it’s tickets to some experience, your avatar or it’s clothing or land in a video game. This is possible through new ethereum token standards known as non-fungible tokens, or NFT’s. These NFT’s are verifiably scarce, yet usually also include an element of random number generation. If it is a 10k avatar project, 100 of them might have a super desirable trait. In the right project, this RNG element could mean that any drop you participate in could be the one that makes you “crypto rich”. Where 100x gains are quite common, and 1000x are not unheard of at all.
Facebook or I should now say “Meta”, has so far largely only revealed virtual reality work environments, which makes sense because people are increasingly working from home already. And Meta would love to influence your entire life and not just your free time. But the Metaverse will redefine what we think of as work.
One of those disruptions is a paradigm shift in its own right, play-to-earn gaming (P2E). In-game items have always had value, it was just not until very recently that one could do anything with that value. The first money I earned as a kid was from selling game items and characters at school. Of course, I was in violation because most if not all traditional games have ToS (terms of sale) that ban real-world trading. When you decide to move on from any one game, your hard-earned value will forever be lost unless you decide to revisit that game.
Today, players that want to remain free-to-play can dedicate their time and energy to grinding out quests, while selling their resources to players that don’t have the time or desire to grind yet still want to experience higher-level content and thus creating a market. But with this new gaming paradigm comes entirely new ancillary businesses, but structured as to reside permanently in the Metaverse, or at least on the blockchain.
These new entities are called decentralized autonomous organizations, or DAO’s. These autonomous orgs were quick to harness the wisdom of the crowd to recreate decentralized versions of traditional financial institutions, and they are coming to the Metaverse as the go-to entity for organizing and deploying capital in the new value-based internet, or web 3.0. In a DAO, members or users of a protocol community govern themselves. Their voting power is based on their economic interests or even reputation in the community. With these modular, foundational “money legos”, a community is free to form around a particular configuration or reconfiguration, where their economic incentives are in alignment.
With the ability to sustain in-game economies, and the decentralization of both the governance and development of these metaverse environments, it becomes an economic playground, not unlike a futuristic Monopoly. Each project will have its own incentive mechanisms and the tokens will have utility in that ecosystem. This is not unlike tokens at an arcade that has value in the arcade, except now there are permissionless liquidity pools of tokens for different decentralized protocols that you can swap with or lend your arcade tokens to. But it really pays to be early, which is difficult when the entire space is moving at warp speed. Today, it was an airdrop for .eth domain name holders that equates to almost $10k worth of DAO governance tokens at the time of writing. Tomorrow, my Aavegotchi NFT pets receive their rarity farming payouts for a cool in-game Universal Basic Income in that game’s token. The life of a metaverse farmer has never been dull during the first-ever bull run.
“What’s Next” is the generous contribution of a close friend Dustin Wallace.
Dustin Wallace is a Berkeley Underground Scholars Student in Data Science with a domain emphasis in Business Analytics, University of California, Berkeley | Class of 2021, Metaverse Pioneer, DAOs, Member of the f8guild @AragonProject Ambassador. You can follow Dustin @CalCryptoChad1 Or find him at www.f8guild.com