What Is a Crypto Metaverse?
A crypto metaverse is an immersive virtual world that incorporates blockchain technology and cryptocurrency.
Updated November 16, 2023 • 3 min read
Crypto metaverses are immersive virtual worlds with immense social and financial potential. Their use of blockchain infrastructure enables them to tap into the wider crypto economy, making virtual items exchangeable for real economic value beyond the confines of the metaverse. By incorporating the immersive environments of virtual reality (VR), the engaging playability of video games, the networked interactivity of social media, and the value exchange of crypto, metaverses are aligned to become a central element in the next phase of blockchain games on the internet.
What Is the Metaverse?
For decades, the grand potential of virtual worlds existed only in the pages of science fiction novels. Today, “metaverse” is one of the buzziest words in tech, and is being enthusiastically embraced by software and game developers across industries ranging from crypto and gaming — to social media. The metaverse has become a very real phenomenon featuring a number of thriving platforms with increasingly extensive crypto integrations.
A metaverse is a shared, immersive virtual world in which players, usually represented by avatars, can interact with each other, construct experiences, and create in-world objects and landscapes. Metaverses typically have their own intrinsic economies and currencies, with which users can buy, sell, and trade digital real estate, items, avatar accessories, and more. You can experience the metaverse via a computer, virtual reality (VR) headset, or smartphone.
Specifically, a crypto metaverse is a metaverse that incorporates blockchain into its underlying technology and crypto assets, such as metaverse tokens, into its economy. Examples of crypto metaverses and protocols that incorporate metaverse elements include Decentraland, Cryptovoxels, Alien Worlds, Axie Infinity, and The Sandbox. While metaverse-like environments have existed in massive-multiplayer online games for some time now, the incorporation of blockchain, crypto, and VR into the sector is not just drastically altering who can participate and what they can do, but also demonstrating the real-world market value of assets, interactions, and experiences earned in the digital realms of blockchain games. Metaverse crypto assets and items — such as digital land and objects, for example — are typically represented by different types of metaverse tokens. Their ownership is recorded on the blockchain and can even be exchanged for digital assets like bitcoin (BTC) and ether (ETH) on a number of decentralized exchanges (DEXs).
Increasingly, the real world is moving to the metaverse. A variety of companies — both mainstream and crypto native — have set up virtual headquarters in crypto metaverses and regularly hold virtual events and festivals attended by thousands of people. For example, in 2021 famed auction house Sotheby’s opened a digital replica of its London headquarters in blockchain game Decentraland. The space boasts a multi-room virtual art gallery that metaverse users can peruse. Likewise, Decentraland regularly hosts live music events, conferences, and meetups.
Key Features of Crypto Metaverses
Designers of crypto metaverses have generally sought to distinguish their worlds from earlier iterations of metaverses in several key ways:
Decentralization: While early virtual worlds were owned and controlled by companies, crypto metaverses are typically decentralized, with some or all components of metaverse games built on blockchain technology. This means that blockchain metaverses themselves tend to diverge from the mainstream business structures and value extraction models of today’s gaming industry. The unique structure of blockchain games can open up more equitable engagement opportunities for participants. It also means that ownership of the metaverse itself is shared amongst its participants. Even if the original creators of the metaverse blockchain were to walk away, the game itself could continue to exist in perpetuity.
User governance: Crypto metaverses like Decentraland make use of decentralized autonomous organizations (DAOs) and governance tokens to help put their users in control of the game’s future, allowing them to drive changes and updates through voting. In this way, metaverses can be more than just crypto games — they can grow into entire societies with economies and democratic leadership.
Provable provenance: In-world items in crypto metaverses take the form of crypto tokens, such as non-fungible tokens (NFTs). Achievements and acquisitions in gaming environments can represent huge value to gamers. NFTs update the standards of in-game items with much needed transparency and access to asset markets. Because every NFT is unique, metaverse tokens and items can be coded to easily help prove the provenance of in-game user-generated content as well as NFT gaming assets.
Real-world economic value: Because crypto metaverses use crypto tokens and blockchain infrastructure, their economies are directly connected to the wider crypto economy. This allows holders of metaverse tokens, avatar skins, and digital real estate to trade them on DEXs and NFT marketplaces, commanding real-world value for their in-world investments.
Metaverse Games Explained
While crypto metaverses (and NFT games in general) are still in the early stages of development, these new worlds present intriguing social and financial opportunities for the future. Crypto metaverses can offer users new ways to play, invest, gather, and interact — and to earn from it all. Further, while development on the myriad singular metaverse platforms is highly noteworthy, it’s the potential for the various metaverse games to interact and interoperate with one another that could drive the budding blockchain gaming ecosystem into a pillar of the global economy. By incorporating the immersive environments of VR, the addictive playability of video games, the interactivity of social media, and the value propositions of crypto, metaverse games are poised to become a central element in the next phase of the internet.
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