The Metaverse as a concept has been around for a few decades. However, interest in the virtual world spiked at the end of 2021 following a rise in sales of non-fungible tokens (NFTs) as well as announcements from Big Tech players indicating their interest and investment in the space.

Using this broad definition:

“The total addressable market for the metaverse economy could grow to between $8 trillion and $13 trillion by 2030 with five billion users worldwide,” according to a new report from one of the largest financial institutions in the world, Citi.

This valuation is based on the definition of the metaverse as combining the physical and digital world in a persistent and immersive manner and not purely a virtual reality world. It is this device-agnostic vision of the metaverse – accessible via PCs, game consoles and smartphones – that results in a very large ecosystem.

Gaming first, enterprise next

The Citi report points out that interest in the virtual world spiked at the end of 2021 following a rise in sales of non-fungible tokens (NFTs) as well as announcements from big tech players indicating their interest and investment in the space. In other words, Facebook and its ‘on-the-nose’ rebranding to Meta.

Gaming is viewed by Citi as a key metaverse use case for the next several years due to the immersive and multi-player experience of the space currently. But the report discusses the possibility that the metaverse is moving towards becoming the next iteration of the internet, otherwise known as Web3.

Within this rubric, with specificity to the global market for NFT’s, in January of 2022, according to Emergen Research, the increasing use of NFTs in gaming was one of the major factors expected to continue to drive global market revenue growth, registering a CAGR of 39.6% over a 10-year period starting from 2020. Their report estimated the global NFT market is expected to increase to $3.5trn in 2030 as increasing demand for a decentralized marketplace is boosting market revenue growth, driven by the increasing use of non-fungible tokens in supply chain and logistics.

However, it must presently be noted that since that report in January 2022, at a time where the market was still rapidly escalating, during the Spring of 2022, unexpected worldwide fallouts occurred almost instantaneously, with such massive global socio-cultural-economic regression that continuing to be experienced as of the date of release of this Whitepaper. With these factors then considered multiple forecasts for the global NFT market were released much more recently during the period of June/July of 2022, and although they still continue to predict and report a lucrative future for non-fungible tokens (NFT) – independent assessments now offer what are at the present seemingly more realistic, yet perhaps conservative targets than those had been asserted by the earlier Emergen Research report. For example, according to the report released by the consulting and global research firm VMR (Verified Market Research), the overall value of the NFT market specifically is expected to rise to $231 billion by 2030.

VMR have attributed the increased demand for NFTs to their diverse use cases across multiple industries, including games, music, film, and sports. Their report identifies principal use cases and areas of interest that encouraged NFT sales.

The VMR report further colors the gaming industry as the major driver of adoption, with Enjin being the first gaming firm that integrated its infrastructure with blockchain technology to release its own token, ENJ. Enjin transformed the assets of the game world into NFTs so that the gamers could monetize them. Axie Infinity (AXS) tapped into the NFT market space by introducing play-to-earn gaming to its users. In the Philippines, Axie Infinity granted an alternative source of income to gamers during the COVID-19 pandemic. AXS gained the attention of regulatory bodies and was a subject of interest after the play-to-earn addition.

In the sports industry, the report mentioned Dapper Lab’s partnership with UFC to launch UFC collectibles. UFC Strike is similar to NBA Top Shots and uses NFTs to monetize and digitize moments from UFC matches.

The report also talked about OpenSea, an NFT marketplace, which coordinated with Adobe service to modernize the conventional IT solutions by integrating blockchain technology in the business sector.

Ultimately, the Metaverse will have its very own economy, one that the creators run, and NFTs will serve as its main currency.

The Open Metaverse

The possibility that the Metaverse is moving towards becoming the next iteration of the internet, or Web3 is now becoming a more widely shared opinion. This idea of an “Open Metaverse” would be community-owned, community-governed, and a freely interoperable version that ensures privacy by design.

The definition of what counts as money in the Open Metaverse is also likely to be very different from what counts as money in the real world today.

PEG finds appreciation, understanding and correlation to certain of the views expressed below by ‘Outlier Ventures’, one of the earliest and most respected Web 3.0 agents and proponents in the global marketplace today. Since 2014, they have developed and provided to Web 3.0 founders, entrepreneurs, and operators, have helped to raise hundreds of millions of dollars, through utilization of a massive likeminded global partner network. In the following section, we let Outlier Ventures paint a pragmatic realistic picture as to the framework and processes of the future Open Metaverse:

The Open Metaverse (“according to Outlier Ventures”)

”…with time an open metaverse built on shared open-source protocols, open infrastructure, and a single unifying yet open financial system will erode, or ‘eat,’ and potentially replace closed platforms due to powerful network effects”…“the failure of Facebook’s Libra has shown no private company, no matter their scale, will ever be allowed to create a meta-economy independent of fiat and nation-states.”

“Meanwhile, Bitcoin has shown how some simple code and elegant game theory can be seeded onto The Web and mobilize, bottom-up, trillions of dollars of capital and physical distributed infrastructure all around the world to create an unstoppable economic system”… “it very likely makes good business sense to bite the bullet, connect your digital platforms and worlds to crypto and subordinate them to the decentralized and open meta-economy”…

Web 3. a stack for an open Metaverse

”… over the last decade, since the inception of Bitcoin, and the maturation of blockchains like Ethereum, we have seen an open and permissionless Web 3 stack emerge where ‘the user is the platform.’…”

It is a paradigm ultimately based on blockchains and their atomic units of account becoming the global digital settlement layer and means that value is ‘minted’ (created), stored, or transferred across other technologies as a form of wealth. But digital wealth can be programmable and represent an increasingly complex range of assets from in-game items and virtual land to loan agreements or futures contracts. In aggregate, this represents an entirely new financial system of currencies, exchanges, borrowing and lending, often referred to as DeFi (Decentralized Finance).

Last updated