Shaping up the metaverse economy
Some metaverse meditations on a flight to Lisbon
A couple of months ago we founded EnterDAO with the mission to build products enabling new markets within the emerging Web3 economy. Sounds catchy but what does that even mean? The term metaverse is quite vague and is probably among the top 5 tech buzzwords of 2021, if not the buzzword.
I would personally describe the Web3 metaverse as the wider virtual space including social media (crypto twitter, for now), games, digital art (NFTs) and financial infrastructure (DeFi). On a more granular level, virtual world games allowing for social interaction and user-generated content (e.g. Decentraland) can also be described as metaverses themselves.
The next “social”
In a way, the Web3 metaverse and metaverse games in particular look like the next “social”, akin to what early social media was in the late 2000s. Yet, strikingly different and for most part, much better. Web3 allows for 1) decentralization and permissionless access 2) upside for users through ownership of digital assets (fungible and non-fungible tokens) and 3) participation in governance. While in a “Facebook” type of platform you’re the product that is being sold (to advertisers), in a metaverse game like Decentraland, you can own 1) Decentraland’s token (MANA) and participate in governance, 2) virtual land within the game 3) in-game items like merch / accessories. All 3 of these are liquid (to a certain extent).
Why the next social? Because this is we’re currently in a relatively early-stage of an attention shift from Web2 to Web3. Make no mistake about it, brands are already recognizing that. Visa bought a Cryptopunk, while Coca Cola, Louis Vuitton, among other brands, have already been dipping their toes into metaverse events and games. The Snoop DO double G is even planning concerts and parties in Sandbox. And we’re still damn early.
Speaking of games, we’re also shifting from pay to play (e.g. you have to buy FIFA so you can play) to play to earn.
Play to Earn (P2E)
You can’t talk about Play to Earn without mentioning Axie Infinity — a Web3 game which will probably go down as a paradigm shift moment in gaming. From have whole families making a living through playing a game through scholarships and forming guilds (digital collectives focused on P2E, the gaming space will never be the same. Web3 games are at an inflection point and we expect tens of P2E games to pop up over the next few months, with a vengeance. Again, with 1) ownership through digital assets 2) participation in governance, incentives are aligned across stakeholders. This opens the floodgates for both creatives (game developers, digital artists) and players. Once enough attention is in there, and it’s inevitable, brands and advertisers will be there as well. But they’ll have to adapt and feed 1) content and more so 2) digital assets to their audience.
While the tides are shifting, Valve just announced that Steam will be banning crypto and NFT games. After all, there are many ways to not make it. Banning Web3 games surely is a bad one.
But that’s to be expected. Every paradigm shift has been met with resistance. Uber, Airbnb and obviously crypto, are great examples, with the latter getting banned every other month. A bullish indicator if anything. The most bullish indicator however is the amount of talent over the past 12 months that has arrived in Web3 land, ready to build. The space has never been so vibrant and we’re starting to see top Web2 talent dedicating their lives to building permissionless, open source, user-owned products.
Probably nothing.
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