Decentralization is key to enriching a true metaverse experience

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OKT Chain

9 min readOct 28, 2022

If you have ever thought of the future of the Internet, you are familiar with the names metaverse and Web 3.0. These two are today’s buzzwords, with their concepts permeating the worlds of fintech, blockchain, and social media.

To get a clear idea of the metaverse, you need first to understand what Web 3.0 is.

If Web 1.0 was focused on reading and Web 2.0 was on participating and contributing, when compared to Web 2.0, Web 3.0 shows promise as an enhancement, particularly in light of the significant changes it brings to the underlying technical infrastructure. Web 3.0 is an idea for a new iteration of the World Wide Web, incorporating concepts such as decentralization and token-based economics stemming from blockchain technology.

This change in infrastructure also promises a different experience for users as a whole. Instead of trusting a third party with control over user data, the approach for Web 3.0 would be an amalgamation of various blockchain-based applications that run independently, without going through any giant party like Google or Amazon. This creates a new experience for users, as they can access services on the internet without completely disclosing their data. Web 3.0 focuses on a decentralized internet where users are the sole data owners.

And the metaverse is an important innovation that could shape the future of the internet. The metaverse is described as “set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.” The term itself stems from Neal Stephenson’s 1992 science fiction novel Snow Crash, imagining digital worlds beyond that of our current physical ones. As the concept moves from fiction to reality, we can think of Metaverse as a collection of uniquely crafted virtual worlds, designed to provide highly immersive experiences, where people, objects, and assets can interact with one another in a seamless, fully interoperable, highly composable way.

Consumer gaming is driving most of the initial adoption of the metaverse today, but gaming is only its first use case. For example, Roblox is a gaming development platform and marketplace, the biggest metaverse virtual world, with about 230 million monthly active users. It allows for external collaboration and value capture, but it is built mostly as a closed Web 2.0 ecosystem.

Roblox platform facilitates the creation and monetization of games by external parties. More than 9.5 million developers in the Roblox ecosystem are responsible for producing content.

As a fundamental principle, Roblox ecosystems exist to serve the interests of the mothership — to monetize intellectual property and take control of how in-game economics and revenue are generated. For example, brands like Marvel or Lego pay in-game advertising revenue to Roblox rather than to game developers. Also, the Roblox corporation fully retains licensing revenue from retailers like ToysRUs. In addition, there is no utility to Roblox’s in-game assets, objects, games, and its native virtual currency, Robux, outside of the Roblox ecosystem.

These closed-loop experiences are not unique to Roblox’s metaverse world. They represent how the internet application stack has evolved over the last 20 years — with a few large-cap players controlling the flow of products and capital. Facebook, and Microsoft — with their respective app stores — are some examples. Many of these Web 2.0 giants are paving their way into the meta “universe”.

Following last year’s announcement by Mark Zuckerberg officially declaring “Meta” as the parent company that intends to build the metaverse in coming years, Microsoft has also dipped its toes into developing a metaverse of its own.

We don’t need to wait long before a wave of companies will follow and work to create products, services, and metaverse experiences. But what’s the best way to join the metaverse, and whom can you trust to experience the evolution into this new old virtual world?

Metaverses in their current Web 2.0 form are closed-loop ecosystems — mostly predicated on subscription-based or advertising revenue models. They limit developers and users in several ways.

From a developer’s perspective:

Lack of interoperability: software must be tailored to the specific standards of each platform.
Lack of composability: most Web 2.0 programs cannot “plug into” each other without APIs.
Lock in perpetual revenue share with the platform on which the developer’s game is listed (e.g., Valve, etc.).

From a user‘s perspective:

Lack of asset portability: users cannot port their personas, avatars, achievements, data, and friend lists elsewhere.
Lack of monetization opportunities: users cannot monetize their characters’ achievements and have no character creation capability.
Permission access: users cannot participate without being approved by the central party or authorized by an intermediary.

Although Web 2.0 models might command influence in the short term, their significance will diminish over time unless they embrace a new user-controlled model.

Decentralization Is Necessary

Data Ownership

Social media is one of the foundations the metaverse will be built on. In return, the metaverse will impact how we think about and use social media. Web 3.0 means that instead of users spending all their time creating content on social media, they can use Web 3.0 to have control over the data and assets they create. Still, this transition into the new world of virtual experiences can only be enabled on decentralized platforms.

Last year, Frances Haugen leaked documents about the internal workings of Meta. She informed that Facebook consistently chose to maximize its growth rather than implement safeguards on its platforms and coveted young users, despite health concerns. The evidence shows how social media unanimously control information shared and exchanged over the internet. Letting these social media networks curate our online experiences is not always in our best interest. In today’s internet, our data is tracked, traced, resold, and sometimes used against us. We have so many major data breaches by companies we trusted our information with, that’s why we a need greater control.

Social metaverses are different from Web 2.0 social media platforms. Social metaverses use the benefits of the platform to empower users. In hyper-realistic formats, these platforms, in addition to enabling users to control their news feed, reward users for staying on the platform by issuing crypto tokens. On metaverse-based social network platforms such as Gravity, users can meet as avatars, watch movies together, play video games, and have similar real-life experiences in a fully digital world.

Metaverse should be set up and accessed through user privacy and data control. Web 3.0 aims to resolve this problem through decentralized blockchain systems, allowing consumers to experience the metaverse from a place of more safety, greater privacy, and less manipulation.

Data Security

Statistics also show that hacker attacks happen every 39 seconds, and on average, 75 records are stolen every second by hackers. Cybercrime costs the global economy over $1 trillion each year. Also, it’s estimated that hackers will steal 33 billion records in 2023. We all have multiple digital identities, such as in the form of Facebook, Instagram, and Gmail profiles. The problem with such platforms is that we don’t truly own these accounts and have no rights to them. These social platforms extract our data in return for the utility and features provided. And because of this, we become prone to attacks from hackers.

Because the metaverse includes social elements and user communication in the form of avatars, statistics above show how dangerous hacks can be for the metaverse. If the proper steps aren’t taken, it won’t be long before users’ account ownership and asset ownership cause scams in the form of identity theft.

To counter this, Microsoft uses a decentralized identity (DID) system that lies at the core. Users in this system own their digital identity as credentials in their wallets. This allows users to have full custody of their digital identity rather than depending on a centralized server login. With the evolution of Web 3.0 and the metaverse, a decentralized identity system is extremely important for implementing a secured identity-owned infrastructure.

This is where NFTs (Non-fungible tokens) play an important role in developing a decentralized infrastructure thanks to their technical and fundamental properties. Every NFT contains a unique digital signature that other NFTs cannot replicate. With the help of NFTs, as the name suggests, non-fungible digital identity credentials can be established and, therefore, cannot be duplicated. These NFT-based credentials can now be used to create profiles and transact with others.

The Role of Blockchain in the Metaverse

Here are some of the main applications of blockchain in the metaverse environment:

Digital collections

NFTs provide immutable digital proof of ownership recorded on the blockchain. The integration of NFTs into the metaverse can enable and facilitate various activities related to the trading of digital products as well as the display of users with unique avatars, and ultimately create an economy within the metaverse.

Digital certificate of ownership

With a digital wallet and access to private keys, users can instantly prove ownership of an asset or activity performed on the blockchain. For example, users can provide an exact transcript of their transactions on the blockchain platform. A digital wallet is one of the most secure and powerful ways to create a digital identity and prove ownership.

Clear and fair governance

How to create and control rules in the metaverse is important for users. The metaverse needs ways to enforce fair governance. Blockchain is now a proven way to do this.

Accessibility for all users

Unlike bank accounts, which require paying money and providing a series of processes, everyone worldwide can create a digital wallet for themselves on public blockchains. This makes wallets one of the most accessible ways to manage your finances and digital identity online.

Economic incentives

Much like today’s play-to-earn games, future virtual economies will require economic incentives that reward users for their achievements and time spent in the metaverse. These incentives will likely be powered by DeFi (Decentralized Finance). DeFi will offer services such as lending and borrowing, enabling metaverse participants to create additional income streams via staking and yield farming.

Interoperability

The metaverse will have to offer interoperability across multiple blockchains, technologies, and data environments for a seamless user experience. After all, users will want their digital avatars and items easily accessible across numerous metaverse projects. And for that to happen, we are constantly working towards better interoperability without compromising scalability and security. We envision a multi-chain network that brings equal opportunity to all users, developers, and projects. For example, users on an OKC-based metaverse could look forward to bridging their token and NFT assets across chains in the future, thanks to our interoperability through IBC and interchain NFTs.

Decentralized metaverse can be realized using blockchain

As a result, Web 3.0, on the path of further development, will be based on public blockchain technologies accessible to everyone that empowers them to own their data. But the blockchain is, first and foremost, a database. Developing around databases is what’s interesting, not the database itself. OKC is an example, fundamentally working for a sprawling ecosystem that incorporates gaming, finance, digital art, and many other spheres. It is completely open-source, with community-driven governance, and there is no surveillance either — in the sense that a crypto wallet, such as an OKX wallet, is anonymous even though the transactions are auditable on the blockchain.

Decentralizing metaverse bringing more opportunity to provide users with a wide range of communication and greatly reduce user fraud. In other words, the decentralized metaverse forms a broad, interactive platform for users to have comprehensive communication with each other.

In the future, several features can be predicted for the decentralized metaverse, and all of them can be realized using blockchain, and we look forward to this going further.

About OKC

OKC (OKX Chain) is an EVM-compatible L1 built on Cosmos with a focus on true interoperability (IBC) and maximized performance. At high scalability, developers can build and scale with low gas fees. The OKC ecosystem and infrastructure, including the all-in-one multi-chain Web3 interface, enables a seamless experience for both developers and users.

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