New World Notes

Does the Metaverse Really Need a Blockchain? I Debate That With Devs from Neal Stephenson's Lamina1 Metaverse-as-a-Service Startup

The Metaverse is very much not dead, but while debunking random hit-and-run diatribes to that effect, I'm in the weird position of also wondering how (or even if) the 600 million+ active users across various metaverse platforms can (or should) somehow be seamlessly unified.

Which paradoxically, means debating the approach taken by Metaverse-as-a-Service-startup Lamin1, co-founded by literal Neal Stephenson.

Last week Lamina1 published a massive white paper on the topic, leading me to debate the value of walled gardens with CPO Tony Parisi.

This week, let's focus on its approach to interoperability based on the blockchain:

Specialized metachains allow for the creation of blockchain-based applications and experiences in ways that overcome the limitations of today’s monolithic chains. Additionally, they allow for a much wider variety of businesses and use cases than today’s metaverse “walled gardens,” empowering the users and the market –– rather than a centralized, risk-averse entity focused on specific business models –– to decide on the value of things that get made.

We also believe that the future metaverse also has to combine the best of immersive computing tech with the best of blockchain to ensure commercial success, longevity, transparency, and privacy online. On-chain rights management, distributed simulation, and storage services would help get us there, in a way that’s accessible to all creators, not just a small club controlled by the few.

OK, but wait: Won't blockchains hurt consumer performance, since they tend to be much more time-consuming to query than a centralized database? In a real time experience, even several seconds of additional wait time can be a deal breaker.

Will Carter, CTO of LAMINA1 and co-author of the white paper, argues not so, but also has some thoughtful qualifiers:

Philip Rosedale: To Prevent the Coming "Ultraviolet Catastrophe" of AI Deepfakes, We'll Need to Move Our Social Networks to Nostr

Nostr is a new-ish social network project and if I’m being honest, I haven’t thought about it much at all except vaguely as that obscure thing Twitter co-founder Jack Dorsey is backing. But when Philip Rosedale was telling me about FairShare, he mentioned Nostr as "[the other] thing I'm most excited about right now as a concept and also as a code base.”

Philip being Philip, his interest isn’t exactly about Nostr becoming an alternative to Facebook or whatever, but being a solution to a completely different but equally concerning problem in technology: The growing power of AI programs to spoof or deep fake real people.

“I think that stuff is going to become an ultraviolet catastrophe in the next year,” he tells me. “Maybe less than a year because of the AIs.”

You’ve probably seen audio recordings like this, where a deep fake is able to imitate Obama and other public figures. That’s all fun and games at the moment, but what happens when that same technology is used to initiate a good friend of yours -- and then that “friend” calls you up, telling you they’re stranded in a foreign country, and they need you to wire them $2500?

“I think one of the things that's going to happen with AI is that all our messages are gonna become [spoofable by AI deep fakes]-- we can't trust them anymore,” as Philip Rosedale puts it.

“I think that we are about to enter into, in some ways, actually a very good time, where all the messages on the public Internet are just presumably bullshit; they're more likely to be garbage than not. And so everybody's just gonna have to stop [using existing social media] and use signed messages.

“I think we're gonna have to move to a new system. And that's going to be really disruptive. But I think it's kinda good because we'll get less nonsense messages.”

That said, here’s an introduction to Nostr from Philip, and why he believes it’s also better than blockchain:

Richard Bartle, Top Virtual World Expert, Tries Explaining Core Problems With NFT & Blockchain at a Crypto Conference. It Does Not Go Well.

 

Richard Bartle, the game industry's most respected expert on virtual worlds and the virtual economies in them, was recently invited to speak at a UK cryptocurrency conference about the immense challenges of integrating NFTs and blockchain into a virtual world (to put it diplomatically). He recently posted on social media what happened next, and with permission, I'm republished it here.   

 

 

I was in London yesterday evening to sit on a panel for an informal group called the Crypto Circle. The members are all people who are interested in crypto-currencies, mainly on the investment side (seed fund investors, hedge fund managers, regulatory bodies, banks) but also including tools creators and commentators.

 

The reason I was on the panel was because of the conflation of blockchain, web3 and metaverse concepts. People seemed to be of the opinion that blockchain tech would be a boon for gamers and that this would extend to the metaverse as a whole. I was invited merely to explain why it wasn't all quite as blissfully rosy as they perhaps thought it was.

 

In the end, the panel didn't get much to say; members of the audience started asking each other questions.

 

I did explain some of the issues arising from the use of NFTs and play-to-earn for games, but people either ignored them, brushed them aside or doubled down on them.

 

What Went Wrong With Decentraland? Expert Game Analyst on The Blockchain-Based Metaverse Platform With High Ideals, Few Users

You might have seen recent claims that Decentraland, the metaverse platform which raised USD $25 million in Ethereum sales of virtual land to fund its development, only has active users in the dozens. That’s not quite true, game industry analyst and designer Lars Doucet tells me, citing his recent report for research firm Naavik -- as of yesterday, for instance, Decentraland has about 7000 daily active users. 

Which is still not very much! (And tracks with my own data from last Summer.) 

“Everybody who is still playing is basically just playing poker,” Lars tells me. “This seems to be a kind of recurring trend in dead-end crypto projects -- like people turn the [project’s] Discord into a meetup place for poker games. Kind of an eerie rhyme with left-behind American cities where drugs come in and anyone who is left is strung out at a slot machine parlor or liquor store.”

You can see that in this Decentraland metrics tracker, with “ICE Poker” as the most visited location by far. It’s quite a fall from boom times (by which I mean last year) when huge firms like J.P. Morgan were touting their official “headquarters” in Decentraland. 

And there’s some tragedy, too -- I’ve been following the platform since 2017, when the founders raised $25 million in Ethereum to fund it, and tried to keep true to its original, democratic-seeming vision.

“Decentraland is one of the few crypto metaverse/virtual real estate games to take its commitment to decentralization seriously,” as Lars tells me. “Like they seem to actually drink their own kool aid rather than using it as a cynical layer of paper thin marketing material like the other ones. To wit; their infrastructure is actually pretty decentralized!”

Then again, that’s also been one of Decentraland’s challenges.

Here’s why, according to a recent conversation I had with Lars, compressed for length  -- with his own advice on how Decentraland might revive itself:

Watch: Snoop Dogg & Eminem Perform in Otherside, a NFT-Driven Metaverse Platform With... Fewer Than 35K "Otherdeed" Owners

In case you missed MTV's Video Music Awards last weekend, BLACKPINK won the Best Metaverse Performance prize for a show the KPOP group put on in PUBG Mobile, a metaverse platform with 30 million daily active players, while Snoop and Eminem performed in Otherside, a new NFT-driven metaverse platform launched last April. Despite a heavy push by NFT fans and development by famed Bored Apes creator Yuga Labs, however, the virtual land rush hasn't actually been very, well, rushy:

Exclusive: Upland Real Estate Game Quietly Becoming an Immersive Metaverse Platform With Nearly 300K NFT Owners

Yesterday I mentioned that "nearly all" metaverse platforms built around web3 features (blockchain, NFTs, crypto) have little or no active users. I qualified it that way because I recently found out about a possible exception:

Upland, the mixed reality real estate acquisition game (and the first customer for Linden Lab's Tilia payment service), sells NFTs associated with individual plots of land. And so far, the game/metaverse platform has over 285,000 unique Upland NFT owners. (Screengrab above, as shared with me by the Upland team.)

285K might not seem like much, as compared to say Roblox or Fortnite, but it is massive when compared with the current NFT market. As I noted last January, there are roughly 360,000 NFT owners in the entire world across the main blockchains. But Upland's NFTs, as co-founder Dirk Lueth told me recently, aren't tracked by Cryptoslam and most other blockchain analytics firms.

In other words, Upland reportedly has nearly as many unique NFT owners on its own platform as there are NFT owners across all other main blockchains -- and far more NFT owners than Axie Infinity, The Sandbox, Decentraland, and other wel-known blockchain-based games/metaverse platforms.

Notably, most Upland NFT owners aren't active NFT speculators on other platforms, as is usually the case. According to an internal survey, 65% of Upland NFTs owners don’t own NFTs outside Upland.

Hopefully regular readers are wondering if Upland is even a metaverse platform at all. What with its flat 2D experience for the web and mobile browsers, it's not a 3D immersive virtual world, which is key to the classic metaverse definition. 

That is true. But here's the thing: Now that it has an active user base in the six figures, the company is gradually rolling out immersive virtual world features beneath the Monopoly-esque property game -- starting with a casual 3D racing game that's currently in Alpha. Watch:

Breaking: Axie Infinity Lost 1 Million Daily Active Users In the Last 4 Months!

Above screengrab taken from the Axie Growth Data spreadsheet 

When we last checked in with Axie Infinity, widely touted as the model of "play-to-earn", NFT/blockchain-based games, it had dropped from 1.3 million daily active users in April to under 600,000 in June. That's a huge drop, but 600K DAU is still quite impressive, ranking it (for example) in the top 20 of Google Play mobile games by daily usage. 

Since then, however, DAU rates have continued plummeting -- from under 600K DAU at the beginning of June, to under 300K DAU as of yesterday. 

If you pull back the camera to April, 16 weeks ago, the drop in usage is even greater:

Core Metaverse Platform Adds NFT Option -- But Why? CEO Explains

Core, the upcoming Unreal-based, Epic-backed, user-generated game development platform, just announced (somewhat unexpectedly) that it's adding NFT integration to its platform:

Today we’re excited to announce Core is expanding to include blockchain technology, starting by integrating with the largest crypto wallet, MetaMask, and the largest NFT marketplace, OpenSea, for a first-of-its-kind API that enables creators to make full metaverse experiences based on their NFT collections.

I say "somewhat unexpectedly" because key funder Epic CEO Tim Sweeney isn't exactly a fan of NFTs, and since the crypto crash, the already tiny NFT market has gotten even tinier. So why even bother?

"We understand not everyone is interested in NFTs and that is why it's not a requirement to connect a wallet or engage with NFT content on Core,” CEO Frederic Descamps, CEO of Core developer of Manticore Games, tells me in response. 

However, he goes on, many third party developers are interested in adding NFTs to their own metaverse experiences in Core:

Is It Fair to Analyze Blockchain-Based Metaverse Platforms Based on Their User Numbers, Not Potential?

Valid question from reader "Mitch", responding to my post last week pointing out the tiny weekly active users of blockchain-based metaverse platforms:

What qualifies an active weekly user in this chart? The Sandbox is still in Alpha. I joined to check it out, I thought it had potential, and then I uninstalled it and I'm waiting for the launch date... Do I count as a lost user, or are you making that assumption? I don't think low user count in this case necessarily correlates with low interest, but it does certainly correlate with the development stage and the lack of open market, at least for the Sandbox. In order to see the value that investors see in these platforms, you can't just look at the platforms themselves. These guys are banking on broader, long-term trends in the development of the web3 space.

To understand any species we need to consider its place in its environment, and the same principal can be applied here. Decentraland is being built in expectation of future demand, and I see it being a powerful tool for venture DAOs the future who need collective work and social spaces. If you don't know what web3 means or what a venture DAO is then you don't have enough context to make any claims about the future of these platforms. The web3 space is exploding with nascent possibility for large scale changes, and those take time. I wouldn't be concerning myself with these user numbers for at least another two or three years. This is a huge structural shift and onboarding people to that takes time as well; I think the "hype" was really just a prep course for society on the upcoming paradigm shift.

I do work with some colleagues in the web3 space, and they make a pretty good case that the technology is worth experimenting with. But it is still very unclear how much of the promises being made by web3 advocates can or will be fulfilled.

And as I can say from painful personal experience, this is a key reason why it's so important not to only follow the potential or possibility of a technology, but actual consumer adoption of it:

Axie Infinity Developer Acknowledges Sharp Usage Drop -- From 1.3M Daily Players in April to Under 600K in June

Axie Infinity developer Sky Mavis tweeted some important information last night, responding to my post citing Arcane Research, which originally claimed that the "play to earn" game had slipped beneath 1000 weekly active users. On the contrary, COO Aleksander Leonard Larsen said that the accurate number is currently 588,000 DAU / 1.5 million MAU.  

Notably, this is still a major drop in usage for Axie Infinity, based on the Google Chart that Larsen shared to bolster this claim: According that data, Axie Infinity's Daily Active Users have shrunk from 1,331,453 on April 11 down to 588,087 on June 6.

"We are in a major transition period in our game, narrative, and economy, as well as it being a macro bear market," Axie Infinity product lead Philip La replied in that Twitter thread, acknowledging the drop (screencapped above). "The user drop is a function of all of these, each of which have their own complex nuances."

I've updated my original post to reflect these numbers. While Axie Infinity's status is much less dire than originally stated, this loss of usage is still extremely large, and shows a consistent hemorrhaging of about 100,000 daily active users every week.More on Axie's current state in this new Bloomberg story.

As for Arcane Research's flawed report: