Metaverse is an immersive 3D (three-dimensional) virtual realm that integrates various aspects of users' lives. It represents a convergence of virtual and physical experiences, creating a seamless and interconnected digital universe where individuals can interact, collaborate, and explore. Within the metaverse, people can engage in a wide range of activities all in real-time. ^[1][2] 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. ^[3]

Overview

The metaverse refers to interactive virtual spaces where land, buildings, avatars, and identities can be bought and sold, typically involving cryptocurrency transactions. In these virtual spaces, individuals can explore with friends, visit virtual buildings, purchase goods and services, and participate in various events. The metaverse encompasses diverse virtual environments, ranging from work-related applications to gaming and community platforms. Numerous modern platforms leverage blockchain technology by incorporating cryptocurrencies and non-fungible tokens (NFTs). This enables the creation, ownership, and monetization of decentralized digital assets, ushering in a new era of digital resource management to, for instance, create property like art or buildings and sell that property to other metaverse users, exchanging it for NFTs or other units of value. ^[4][5]

Metaverse was popularized by Neal Stephenson in his 1992 science fiction novel "Snow Crash." The book envisions a futuristic world where people interact with each other and software agents use avatars within a vast online-enabled virtual realm known as the "metaverse." This virtual space, as depicted in the novel, was a pioneering concept that anticipated the potential evolution of the internet and virtual reality technology. ^[2][6]

Classification

The metaverse can broadly be classified into two distinct platforms: blockchain-based and virtual world platforms. ^[4]

Blockchain-based

This type involves using NFTs and cryptocurrencies to create a metaverse. Examples of platforms utilizing this type of metaverse are Decentraland and The Sandbox. They enable individuals to buy virtual plots of land and create their own digital environments. ^[4]

Virtual world

This type of metaverse allows people to meet up for business or recreation. Examples of platforms utilizing this type of model are Roblox, Fortnite, and Minecraft. They are gaming platforms where users can engage in competitive and collaborative gameplay and also have the ability to create their own games, making them part of this category. In addition, Facebook Inc. announced it would start creating a product team to work on the metaverse. ^[4]

How the Metaverse Works

The Metaverse is collectively owned by its users, operating on a decentralized network like blockchain. Participating in Metaverse technology necessitates investments in its services, architecture, and development. For instance, people interested in blockchain-based platforms must utilize cryptocurrencies. Many of these platforms require the use of Ethereum-based cryptocurrency tokens such as MANA for Decentraland and SAND for The Sandbox for buying and exchanging virtual assets. ^[4][12]

In Decentraland, users have the option to trade NFT artworks or charge entry fees for virtual exhibitions or concerts. In addition, they can generate income by buying and selling land, the prices of which have experienced significant growth in recent years. However, on Roblox, users can generate income by offering access to the games they develop in exchange for a fee from other users. ^[4]

Examples

Decentraland (MANA)

Decentraland provides an infrastructure to sustain a shared virtual world, encompassing a decentralized ledger for land ownership, a protocol describing the content of each land parcel, and a peer-to-peer network for user interactions. The concept of Decentraland's metaverse originated during its Bronze Age in 2016, creating a 3D virtual world divided into land parcels. During development, parcel owners could associate their land with a hash reference to a file, using a modified Bitcoin blockchain. In this context, users exploring the virtual world can employ a Distributed Hash Table (DHT) and BitTorrent to download the file containing the parcel's content, specifying the models and textures to be displayed at that specific location. ^[9]

A traversable 3D world adds an immersive element to Decentraland, along with the requirement that new land parcels be contiguous to existing ones. This feature distinguishes it from web domains and facilitates the formation of physical clusters of communities. Furthermore, adjacency enables the spatial discovery of new content and the creation of districts dedicated to specific topics or themes. ^[9]

In Decentraland, users have the freedom to create and shape their virtual world as they desire, and they can explore the metaverse using their phone, computer, or virtual reality (VR) headset for a convenient experience. It is an Ethereum network-based metaverse experience that is controlled by the Decentraland DAO (decentralized autonomous organization). ^[9]

Virtual economy

Decentraland allows its users to purchase, sell, and oversee their virtual property, known as LAND. Getting started on the Decentraland platform requires individuals to obtain MANA, its native cryptocurrency, to purchase virtual lands and develop them for games and other experiences, as well as for avatars and digital accessories. In addition, the MANA coin gives users the power to access interactive apps, pay for goods and services, or invest in more property. Furthermore, holders of MANA, or virtual property, in Decentraland have the opportunity to engage in the DAO, where they can vote on initiatives and new development projects. ^[5][7]

The Sandbox (SAND)

The Sandbox is a virtual world where players can build, own, and monetize their gaming experiences on the Ethereum blockchain. By allowing players to create virtual worlds and games collaboratively and without a central authority, an immersive metaverse is being offered. ^[10]
 
Metaverse is created in the Sandbox through the Voxel gaming platform, where creators are able to craft, play, share, collect, and trade without central control, enjoying secure copyright ownership with the ability to earn SAND, the platform’s utility token. Copyright ownership is ensured by utilizing NFTs, granting each in-game item a distinctive and unchangeable blockchain identifier. ^[10]
 
The Sandbox gaming ecosystem comprises three interconnected products that collectively offer a comprehensive experience for user-generated content (UGC) production: voxel editor (VoxEdit), marketplace, and game maker. This system also empowers users by enabling them to attain copyright ownership for their creations through blockchain technology and smart contracts. ^[10][11]

VoxEdit is a simple-to-use free 3D voxel modeling package that allows users to create and animate 3D objects like people, animals, foliage, and tools and export them into The Sandbox Marketplace to become game ASSETS; Marketplace is a web-based marketplace that allows users to upload, publish, and sell their creations (ASSETS) made in VoxEdit as tokens (both ERC-721 and ERC-1155 tokens); and Game Maker allows those who own ASSETS, either by making them in VoxEdit or purchasing them, to build 3D games for free. ^[10][11]

Virtual economy

The Sandbox uses multiple token varieties to establish a self-sustaining economic system among its diverse user base, including players, creators, curators, and landowners. ^[11]

• SAND is the ERC-20 token utilized within The Sandbox, serving as the foundation for all transactions and interactions within the ecosystem.
• LAND represents a digital parcel of real estate within The Sandbox metaverse. Players acquire LAND to fill it with games, assets, and interactive experiences. Each LAND is an NFT stored on the public Ethereum blockchain (ERC-721).
• ASSETS are tokens developed by players who create or assemble user-generated content (UGC). These ASSETS, whose primary purpose is to act as building blocks in The Sandbox Game Maker, adhere to the ERC-1155 standard and are tradable on the marketplace.

Alien Worlds (TLM)

Alien Worlds is a metaverse and blockchain game in decentralized finance (DeFi), where players vie for limited resources within the community. The game incorporates decentralized features, allowing players to enhance their experience by staking Trillium (TLM) and acquiring voting privileges in the Planet DAO. ^[5]

Current features available within the Alien Worlds Metaverse include: ^[13]

1. Mining: Players can mine Trilium from various planets using suitable NFT game cards.

2. Planet DAO Governance: Participants can engage in weekly elections to select council candidates.

3. Trade NFT Game Cards: Players have the option to trade NFT game cards on the BNB Chain (BSC) and WAX, which can be used for mining and in-game missions.

4. Cross-chain Bridge: TLM can be teleported between BSC, WAX, and Ethereum.

5. Staking Trilium to Missions: Players can stake Trilium to earn rewards in the form of staking rewards in Trilium and NFT game cards. Additionally, they can stake Trilium to Planets to augment the Planet’s reward pool.

How Alien Worlds works

To engage in the game, players must possess a WAX Cloud Wallet. Upon logging into Alien Worlds, they can commence mining, which is rewarded with TLM tokens. These tokens grant players the ability to participate in the governance of one or more Alien World planets and potentially become planet rulers. Additionally, players have the opportunity to acquire NFTs, which can be utilized for in-game quests, battles with other players, or TLM mining. ^[5]

Axie Infinity (AXS)

Axie Infinity is a play-to-earn (P2E) gaming platform that allows players to train fantasy monsters known as Axies. Axies are NFTs that can engage other players in a battle and compete against other teams while earning AXS tokens. Axie Infinity is a metaverse because players have complete ownership of their digital assets and can buy, sell, and trade them just like physical trading cards and collectibles. ^[5][14]

The goal of Axie Infinity is to establish a vibrant ecosystem of Axie gaming experiences, underpinned by community and player-owned economies. Through the initiative, they aim to grant property rights to all internet users, beginning with gamers. Furthermore, players have the opportunity to enhance their in-game progress by: ^[14]

1. Engaging in battles to secure leaderboard prizes and Smooth Love Potions (SLP).

2. Breeding Axies to generate new ones with specific body part combinations.

3. Collecting and speculating on rare Axies, such as Mystics and Origins.

4. Crafting art and content.

5. Introducing newcomers to the Axie universe.

Axies can be bred continuously, but users have to keep their AXS tokens to do so. In addition, they can choose to stake their AXS tokens to receive additional rewards. ^[5][7]

Virtual economy

Axie Infinity Shards (AXS) function as ERC-20 governance tokens within the Axie Universe. Those who hold AXS tokens can receive rewards by staking them, playing the game, and taking part in essential governance decisions. Additionally, players have the opportunity to earn $AXS by engaging in diverse games within the Axie Infinity Universe and participating in user-generated content initiatives. The purpose of AXS mechanisms revolves around two primary objectives: ^[15]

• Rewarding players for engaging with Axie Infinity while encouraging them to retain their tokens to claim extra rewards.
• Decentralizing the ownership and governance structure of Axie Infinity.