29 Apr 2022
Experiencing cyberspace in studio

How will you seize real opportunities in tomorrow’s virtual world?

Authors
Maximilian Schmidt

Metaverse Lead Switzerland

From the Swiss Mountains to the Metaverse. Passionate about Emerging Technologies, especially Crypto and Blockchain related topics.

Benjamin Banusch

Disruptive Technologies Lead Switzerland

Experienced Technology Strategy Advisor, supporting organizations to face the opportunities and implications of emerging technologies such as DLT/Crypto Assets and Quantum Computing.

29 Apr 2022

As the corporate world embraces the metaverse, it’s time to explore the potential for players in all sectors.

In brief
  • The metaverse is evolving rapidly – and organizations are recognizing the need to find their place in it
  • We shine the spotlight on existing virtual platforms to illustrate how the metaverse works
  • As Web 3.0 shifts the focus from read and write to collab and create, organizations can help shape tomorrow’s virtual world

During Covid, business and social interactions automatically shifted to the digital space. Post pandemic, interest in virtual ways of communicating and collaborating is here to stay. Against this background, it is hardly surprising that developments in the metaverse are catching the eye of organizations and private individuals alike. If it continues to evolve as anticipated, the metaverse will be offering a collective, virtual shared space in which people can interact remotely and have multi-sensory experiences.

In a series of articles, EY explores the metaverse and addresses the key questions facing organizations as they seek to understand, enter and thrive in the virtual world.

The metaverse combines cutting-edge technology and interaction models between private and commercial participants, which in turn enables a fully functioning economy within a virtual space.
Maximilian Schmidt
Manager Digital Strategy & Emerging Technologies | Switzerland

Let’s start with a bit of background. The term “metaverse” was coined by author Neal Stephenson in his novel “Snow Crash” in which humans interact with each other as avatars in a three-dimensional space. Although there’s no single “metaverse” at present, we can describe it as the evolution and extension of the internet, as exploited by various providers of virtual world infrastructure. The metaverse combines cutting-edge technology and interaction models between private and commercial participants, which in turn enables a fully functioning economy within a virtual space.

  • What is the metaverse?

    Research and consulting firm Gartner describes the Metaverse as “an immersive digital environment of independent, yet interconnected networks that will use emerging protocols for communication. It enables persistent, decentralized, collaborative, interoperable digital content that interacts with the physical world’s real-time, spatial indexed and organized content.”

This virtual space – virtual world – is enabled by Web 3.0, which represents the consistent development of the internet towards more digital social interaction, semantic and context-based search algorithms, and a strong orientation towards media-based information and entertainment. Web 3.0 provides the basic building blocks of the metaverse. The virtual worlds themselves are distinct platforms and developers and users are shaping these environments based on their vision, strategy and emerging technological advances.

The metaverse supports the shift from Web2.0 to Web 3.0 – in other words from “read and write” to “read, write, own and participate”. This innovative, collaborative approach is an invitation to organizations across sectors to find – or create – business opportunities in this new space. First movers have recognized the potential of this new medium to engage and interact with potential customers and communities, as reflected in the broad range of industries and use cases for this futuristic idea. In recent years, we’ve witnessed exciting developments such as unexpected brand collaborations, the opening of virtual offices and the advent of the Chief Metaverse Officer.

Early activities in the field have been focused on brand collaborations with players from both the physical and virtual worlds. One prominent example is the collaboration between Adidas and the Bored Ape Yacht Club (BAYC), widely received as one of the strongest brands within the Web 3.0 world, who released a collection of NFTs (Non-Fungible Tokens) end of 2021. Further examples include car manufacturer Audi, which turns its vehicles into rolling virtual reality experiences with holoride in-vehicle tech, or food giant McDonald’s patent applications for the virtual brand, branch and services.

In this article, we examine the leading platforms – Decentraland, The Sandbox and the upcoming Otherside – as examples of how the metaverse is evolving. They offer unique and fresh gaming and socializing experiences but have key differences when it comes to design and functionality. Companies and individuals need to take these into consideration when deciding which platform fits their unique needs. It’s also important to note that the list of available platforms is set to grow as more and more actors jump on the metaverse bandwagon.

  • Decentraland

    The earliest pioneer in the metaverse space, Decentraland was launched in 2017 and is an early immersive and engaging 3D virtual world.
    It started off with an Initial Coin Offering of USD 24 million, and became available to the public in 2020. The platform is community-driven and governed in a decentralized manner. Decentraland features a diverse assortment of experiences for participants, such as games, casinos, galleries and concerts, to name just a few. Users can create and partake in a wide variety of experiences on the different parcels of virtual real estate on the platform. They can also purchase plots of land and create their own buildings or experiences for others to explore

  • The Sandbox

    The next important player, The Sandbox, started off in 2011 as a blockchain-based virtual world and migrated to the 3D gaming platform in 2017. It allows users to build, play, exercise ownership over and monetize all their virtual experiences. One of the primary aims of The Sandbox is the empowerment of artists, creators and players in the metaverse to develop the platform according to their imagination.
    The project brings features unique contents such as NFTs, enabling a consistently growing community of gaming enthusiasts. Sandbox follows an innovative play-to-earn model, which helps users in developing as both gamers and creators.

  • Otherside (preview)

    In addition to the two established players Decentraland and The Sandbox a highly anticipated move by Yuga Labs is expected shortly. Mid-March 2022 a video was launched by the parent company of the Bored Ape Yacht Club teasing the “Otherside” metaverse. The teaser featured several well-known NFT avatars, e.g. CryptoPunks, CoolCats and World of Women, indicating strong collaborations with other NFT collections. Earlier this year, Yuga Labs has also announced a partnership with Animoca Brands, one of the largest venture capitalists in the space. Land for the Otherside is expected to cost 305 ApeCoin (APE) and everyone who completed a KYC process will be able to mint 2 land parcels. APE is an ERC-20 token and the native currency in the Bored Ape Yacht Club (BAYC) ecosystem.

    Their community is over 140,000 members strong, indicating great interest in the Otherside metaverse, which has been described as the most anticipated event in the space this year. 

The earliest metaverse-like platforms, The Sandbox and Decentraland also enjoy the largest user base. Among the growing number of 300,000 Decentraland players, 18,000 visit the platform on a daily basis. The Sandbox, on the other hand, has 500,000 uniquely connected wallets and a daily user base of around 10,000 players. While Decentraland and The Sandbox offer comparable user experiences, the key platform concepts are different. Decentraland is more decentralized, focusing on user-driven decisions, while The Sandbox has only planned to shift its structure towards a DAO (Decentralized Autonomous Organization) in 2022. Furthermore, The Sandbox offers more complete content creation tools and has seen more corporate partnerships in the past. It remains to be seen how Otherside will complement this space.

To use the platforms, users need a computer as neither one is mobile-ready. The Sandbox needs players to install a desktop client currently available for Windows and macOS. Both platforms use identification via an Ethereum blockchain-supporting wallet such as MetaMask. Decentraland can be used directly via any internet browser, although some (Chrome, Brave) work better than others (Firefox).

Market reach

10bn +

Combined market capitalization in USD of Decentraland and The Sandbox

Decentraland and The Sandbox use in-game currencies for buying and selling assets. Both are based on the ERC-20 token standard for defining tokens on the Ethereum Blockchain. MANA, the cryptocurrency of Decentraland, has a total supply of 2.80 billion tokens, with a current price of USD 2.35 and a market capitalization of USD 5,736,097,349. MANA is mainly used for buying land and wearables but also serves as a voting share for the DAO that manages Decentraland. SAND, the utility token of Sandbox has a total supply of 3 billion with a current price of USD 2.95 and a market capitalization of USD 4,528,715,461. Similar to MANA, it serves as a medium of exchange for buying and selling land and assets but also for governance to vote in upcoming decisions concerning the platform.

Besides the ERC-20 tokens, both platforms feature different NFTs based on the Ethereum Standard (ERC-721) enabling unique assets. Both platforms enable the purchase of customizable parcels. Decentraland offers a total of 90,601 parcels, 16mx16m in size with over 6,000 parcels already sold. As of 2022, the cheapest parcel is available for 4,000 MANA, equivalent to roughly USD 13,000. The parcels are themselves tokens, which can be customized. Users can also customize their avatars by creating or buying wearables like clothes or skins, which are also unique tokens called WEAR.

The Sandbox offers almost twice as many parcels – 166,464 – and they are also larger in size at 96mx96m of digital space. The cheapest parcel as of March 2022 is priced at 3,400 SAND (approx. USD 14,000) and there are 100,000 parcels still available.  Sandbox features ASSETS, GAMES and LAND. By purchasing LAND, developers and players can design landscapes or games of their own for others to explore. ASSETS are unique items which can be wearables, art or other types of collectibles. GAMES can be designed using the Sandbox game maker and can be published on LAND, which can be bought or rented. They can be provided free of charge to other players or subject to a fee, payable in SAND.

Experience-driven

10%

Of land in The Sandbox is reserved for special events

Parcels on both platforms can be combined to form larger districts. In The Sandbox, players or companies who want to create great visibility for their games or advertisements can pay for premium land around highly crowded places – much like in the real world. This can create more traffic for pay-to-play games, advertising and market visibility.

Around 10% of the land in The Sandbox is held by the creators for use in special events. In Decentraland, some parcels are also restricted for community-owned districts that serve a special purpose. One example is “Genesis Plaza”, the starting point for every new player, which features introductions, tutorials and a meeting place. Other famous districts are the shopping, gaming or gambling districts, where companies or unique players can rent space for creating brand visibility or holding events. When it comes to unique events, art exhibitions or showcases, Decentraland has shown that it can handle and setup events like the Metaverse Festival, featuring a great set of artists, stages, mini games, or collectibles with more than 50,000 visitors. 

  • References

    Our research for this article was inspired by articles and websites including:

    1. Audi Is Turning Its Vehicles Into Rolling VR Experiences With Holoride In-Vehicle Tech
    2. Decentraland FAQs
    3. Decentraland Holds First-Mover Advantage in Battle Against Meta
    4. The cheapest real estate on popular metaverse platforms is already selling for more than $13,000
    5. What are ASSETs?
    6. coinmarketcap.com
    7. The Otherside Game: Everything About The BAYC Metaverse (nftevening.com)

Summary

The metaverse – a collaborative, connective virtual space – is taking shape as Web 3.0 empowers users to co-create the future. Early adopters are already finding their place in the virtual world, and all companies should start to define their own metaverse strategy. Although there are already some established players in the Metaverse space there are still constantly new and exciting innovative developments which push the boundaries further.

 

Acknowledgment

We thank Florian Gronde, Charbel Choufani and Iga Kantak for their valuable contributions to this article.

About this article

Authors
Maximilian Schmidt

Metaverse Lead Switzerland

From the Swiss Mountains to the Metaverse. Passionate about Emerging Technologies, especially Crypto and Blockchain related topics.

Benjamin Banusch

Disruptive Technologies Lead Switzerland

Experienced Technology Strategy Advisor, supporting organizations to face the opportunities and implications of emerging technologies such as DLT/Crypto Assets and Quantum Computing.