Is Player One Ready?
Is Player One Ready?
If you don’t know what the metaverse is, you’re already living in it
“You see Zuck changed Facebook’s name to Meta”
“Yeah, that’s old news. Tell me something I don’t know”
“Someone’s probably flirting with your girlfriend in the metaverse.”
“What?”
“It’s on-chain, which means it’s immutable. Sorry bro, wish I could change it.”
Yes, Carole, it’s too late baby
The old adage goes that if you’re at the poker table and you don’t know who the fish is, you’re the fish. The new adage goes if you don’t know what the metaverse is, you’re already living in it.
Everyone is scared of the term, metaverse, the imagined dystopian future where people drool and motor-about in Wall-e style chairs while they interact with their virtual headsets, wandering life aimlessly.
Wake up call…
The day for most starts and ends online. We do business on Zoom, work for companies where employees have never met physically, we talk on Instagram, we shit-talk on Twitter, we find potential partners by moving our pollex from left to right on our screen. The order of operations is digital interaction first, physical second.
Saying “I’m cooler IRL (in real life)” is as out of style as “that’s what she said”. I still say both.
A better definition of the metaverse than the Wall-e picture that clouds our minds is a place where the wall between our digital and physical worlds has deteriorated. I know, all this “wall” talk is triggering.
Once you accept that the wall has deteriorated, the conversation of “metaverse” can actually be productive as opposed to “that’s far away and dystopian”. We can at least shit-talk Zuckerberg effectively if we agree that our worlds have already melded.
Businesses now have to adapt to this paradigm shift that reads 9.4 on the richter scale.
In the “old days”, when that wall between our physical and virtual world was fully intact, our status symbols were cars, houses, art, and clothing. Going online was something most people did on the side or strictly for work (in a non-connective manner). E-mail was efficient, but it didn’t drive culture. Our culture was driven by our obsession with consumerism, and Warhol reminded us that one is simply not enough.
So, if the lines between our worlds are blurred, and we are still consumerists, what should we buy now? Ferraris are old news, buy a Cryptopunk. Why hang a Lautrec when you can carry a Fidenza in your pocket? You could own a Ranch in Wyoming or you could own a 24x24 plot in Sandbox.
You’re probably thinking “he hasn’t used the word NFT yet"
The stuff we want is different from the stuff we used to want. AKA, it’s all non-fungible. And, it’s digital. NFTs are that stuff, and you buy it with cryptocurrency.
The biggest brands in the world that we like to buy our physical stuff from have taken action. Nike filed patents to protect their brand in the metaverse. Adidas owns a 12x12 in Sandbox, the buzziest metaverse (more on this later).
May you never stop “doing it” wherever you are.
While we aren’t in a Wall-e world, there are virtual worlds, places where digital avatars interact with each other. Think video games, but we are the players.
This is where digital idealized versions of ourselves interact in virtual spaces designed by virtual architects, or Zuck. These virtual worlds are bound by some basic principles:
You can’t build anything without owning or renting land.
There’s a finite amount of land available in these worlds. Just because they are digital worlds doesn’t mean crypto-nerds don’t understand that scarcity sells.
While you can build on your own land, there are zoning laws. Just like I can’t build a skyscraper in Venice, California, there are restrictions that are similar to those you might face in the real world.
Building is expensive. You can’t build incredible structures and experiences in the Metaverse without professionals. You can try, but it’s difficult; not just anyone can build the Duomo in Florence if they “put their mind to it.” Hence why we work with GYB to build, because we are not Zaha Hadid reincarnates.
You can rent out your land to other people and brands, turning land into a yield bearing asset.
You buy the “stuff” that fills these virtual worlds in cryptocurrency (e.g., SAND, ETH, MANA).
Everything is on chain, meaning ownership of all the stuff is completely verifiable.
You can host events and sell tickets. Wake up, Travis Scott’s concert in Fortnite had 27 million unique attendees. Woodstock was child’s play at 400,000 attendees.
Here’s Adidas’ new land plot in the Sandbox:
The virtual world is not Pangea, as there are multiple distinct virtual worlds to hang out in. The best way to think about it is that there are essentially different countries. Every “country” has its own customs, laws, and native currency, and each are moving at different developmental stages (think first world, second world, third world, etc.). A few of the main worlds are:
Sandbox ($6B market cap) → has the most buzz by far
Decentraland ($8B market cap)
Robolox ($70B market cap - listed on NYSE)
Axie Infinity ($9B market cap)
Zepeto (Asia’s most popular metaverse - 2M DAUs)
- Data from Coingecko
Interoperability and aligned incentives
Interoperability: The interoperability concept is extremely crucial to understanding the thesis that the metaverse will be much bigger than any other online community we have seen to date. While the metaverses listed above are all distinct virtual worlds, the end goal is interoperability between these worlds. Similar to how you can wear your watch across country borders, these virtual worlds will allow you to take the stuff you own from world to world. Your land will remain in the world you bought it in, but other digital goods can be transported.
People are much more likely to invest their time and money into a metaverse if they can be sure other people will continue to spend time there. If one of these metaverse worlds falls out of favor, and becomes the San Francisco of the metaverse, and people want to move to Miami, if they have to rebuild their entire empire, they are much less likely to ever build an empire in the first place. As a reminder, all the things you interact with in the metaverse are NFTs.
Interoperability is what separates these decentralized metaverses from centralized virtual worlds such as Fortnite and World of Warcraft. In these decentralized metaverses, people will be able to leave one world and go to another with all of their stuff. Their achieved status can now travel with them.
Aligned incentives: As much as he detests Bitcoin, Nassim Taleb would be so proud of me for this one. Participants are financially incentivized to build and utilize great stuff in the metaverse because they have Skin In The Game. If you build a cool NFT, let’s say it’s a virtual hoverboard, and everyone watches you drive around the metaverse picking up virtual chicks, there will be buyers for that hoverboard.
Sex sells.
You built it, you showed its capabilities, now it has value that accrues as demand for the asset grows. One day, you can sell it if you want. When users are financially incentivized to improve the ecosystem, mass adoption will happen much faster. No marketing dollars required.
@Zuck, if you build a virtual efoil, I’ll forgive you for pillaging my data.
~take a deep breath~
How close are we to digital Kumbaya?
In some respects close, in others, it’s far away. On one hand, people are already spending an immense amount of time digitally, some of which is in these worlds. Currently, the metaverse feels like a progressed social network that leverages metaverse concepts, but isn’t operating completely within these worlds due to the limited capabilities of them.
The full Ready Player One functionality is a few years away.
What’s important to take away is that our behavior has already shifted. What we used to care about has morphed.
Young kids already want to have their birthdays in Roblox (parents, I got you with a guide). Maybe if I was bar mitzvahed today I’d give my haftarah from digital Mount Sinai. I know, how prophetic of me.
Navigating the metaverse for companies and brands will take time, but those who invest early in setting up the infrastructure will become the backbone of metaverse culture. Those who don’t will struggle to attract eyeballs and will be forced to play a game of catchup à la Zeno’s paradox: Achilles, while much faster than the tortoise, cannot catch it.
Remember the Zune?
Me neither.
We started En Passant Digital to bring legacy IP to the blockchain, and it looks like the hand-holding will be more virtual than expected.
Talk to us!
If you are looking for an expert* opinion on your NFT project, or want to talk generally about the market, please reach out for a no-obligations 20 minute phone call. We have a number of technology partners at En Passant Digital that help us bring your legacy IP to the blockchain.
Email: bryce@enpassantdigital.com
*Anyone who claims to be an expert is a charlatan. They are generally snake-oil salesmen who probably also told you to buy OneCoin. From the last 4 years of our experience, we’ve realized that there are no experts in the space, as it changes by the second.
About the author: Bryce Baker is the co-founder of En Passant Digital, an NFT-focused agency bringing innovative market guidance and strategy to top-tier brands & celebrities.
Our other co-founder, John Tabatabai, has led investments for Crypto VCs and consulted for projects across the NFT space. He recently had an active role in advising, designing and creating the mechanics and infrastructure for the famous B20s, aiding in creating more than $250,000,000 of value in less than 45 days.