Blockchain & the Metaverse

11/11/2022 16:44

In the last couple of years, the concept of the Metaverse and blockchain became intertwined. But early versions of the Metaverse existed well before this — like Second Life, founded in 2003 — that made digital spaces more immersive.

And, when the numbers of monthly active users were released, with DappRadar reporting that Decentraland only had 38, and The Sandbox 522 active users in a 24 hour period, it makes sense to pause and question. Does the Metaverse actually need blockchain?

While the numbers above have been heavily contested, one thing is clear. Platforms not built on blockchain, like Roblox and Fortnite, are outstripping blockchain-based counterparts.

But, there are still several arguments for blockchain in the Metaverse.


For those of you familiar with blockchain, interoperability as a selling point might be confusing. Afterall, interoperability is one of the great hurdles that blockchain must overcome to become an easily navigable ecosystem.

But, the thing is, that while interoperability between blockchains still needs to be effectively solved, decentralized applications (dApps) built on the same blockchain already have interoperability. This means that the assets you acquire in one dApp can be taken to use on different dApps on that same blockchain. Essentially, blockchain is able to give some digital permanency (and if needed, singularity) that is difficult to find in Web2.

Of course, more work on this ecosystem around the interoperability between blockchains is still needed to reap the full rewards of this.

The Creator Economy

The creator economy is the great selling point of blockchain. Where in the past, the focus was on how to create content to draw more users to a platform to view content, who actually owned and profited from that content missed the focus. At least for the average user. Meaning that by default, platforms were able to take ownership of this content and set the rules of monetization.

But, in Web3, we've stopped to think of the creator. And their audience.

Blockchain-enabled platforms are working on restoring ownership over content and assets to creators and purchasers, with many also focused on setting better terms for creating on these platforms.

Beyond the Game

In non-blockchain metaverses, like Roblox, they've already created economies. Siloed entirely to the platform, and with no checks on the economics. Rather than turning back to centralized authorities, like governments and banks to ensure that the money is real, the platform has sole control over it, setting the purchasing and selling rates for their in-game currencies. Currencies that don't function elsewhere.

But, blockchain-based applications seek to make these economies matter beyond that. And decentralized control over how they are regulated. Essentially, it is taking the 'fake money' economies of games to a new level of use and with new authorities regulating how they work. Whether or not you believe this money is still fake, is of course, up to you, but does proffer new potentials.

What's Missing?

Of course, this sounds great, but there is the persistent problem of low monthly users on blockchain-based metaverses.

And, that's likely true for several reasons. First, is that as mentioned before, platforms of the past are just that. More established than their younger blockchain-based counterparts. Roblox was founded in 2004 and Fortnite in 2017, which although nearly as young as some blockchain-based metaverses, as a closed gaming ecosystem.

On this note, they also are following a much clearer business model, focusing on user experience, onboarding more creators, and building addictive games.

Blockchain is asking us to chart new business models that center creators and users, not just the platforms. And, this is great, but the shift in focus and complex user journeys have slowed audience growth.

All the same, with a heavy focus now, especially in the Bear market, on user onboarding and experience and quality content behind projects, and the advantages that blockchain brings to the Metaverse it's worth keeping an eye on. Now, whether this will be achieved with an originally non-blockchain based platform integrating with some blockchain-based applications, like Roblox, a blockchain-native platform, or a mix, remains to be seen.

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