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“I believe the economy of the metaverse has been constrained by the companies, the players, the users of this environment,” said John Burris, chief strategy officer and chief blockchain officer at Together Labs, during his presentation, “The Economy of the Metaverse,” part of GamesBeat’s Into the Metaverse event.
The first issue is that a majority of platforms are closed or walled economies, he said. The proprietary credit systems developers put into the marketplace that users spend money on to purchase, whether they’re credits, roebucks, or vbucks, can’t leave the platform. They don’t have any real value off the platform. And through that process, developers have constrained the larger economy — but there is an opportunity here to unleash it.
He notes that developers have been good at the single-purchase economy where users spend money on the platform to purchase a credit and then spend that credit on a virtual good, whether it’s a skin, a new weapon, access to a new level, and so on.
“We’ve done a great job of that part of the economy,” Burris said. “Where we’ve kind of missed the mark to date is enabling peer-to-peer transactions on the platform, allowing users to pay each other on the platform, to pay other users on- and off-platform. We have really ignored the service marketplace, or the service economy. It wants to be a part of our platforms. It wants to grow.”
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Closed-loop economies, single-purchase economies, and a lack of peer-to-peer payment mechanisms, are missing real-world economic dynamics.
“For a majority of these platforms, I’d say 99% of them, there’s no meaningful way for users to earn real value that they can spend in the real world, to buy a new computer or pay their rent,” he said. “And they really have no control over those earnings — when they get paid; how much they get paid at a time; whether they can hold those earnings and trust that they have value over time. It creates a lot of friction in the marketplace and it stifles the creativity, the entrepreneurship, and the activity on our platforms.”
Users also don’t have a lot of trust that the rules won’t change, because the companies that build these metaverses and gaming platforms can and have the right to change the rules. This has created an environment where users, creators, and designers have been forced off platform in a lot of cases, using outside payment methods like Venmo or PayPal for their transactions.
This has not only forced users, creators, and designers into grey markets, it’s also forced them to work with third-party platforms that are outside of gaming ecosystems that often leads to friction. So consequently, the market is a lot smaller than it should be, Dayan explained.
“We have a big decision in front of us,” he said. “If we don’t embrace and support and usher in this next generation of the virtual economy on gaming platforms and in the metaverse, I think our users will do it without us. It’ll be higher friction, it’ll be fraught with fraud and it’ll take longer to grow, but they’ll find a way, if we, the builders of the metaverse and platforms, don’t embrace this new play.”
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“We believe that one core component of the next generation virtual economy will be built on the blockchain,” he said. “We think at the center of that will be a digital currency or digital currencies that are built on the blockchain, and available to users on- and off-platform.”
Together Labs is the parent company of IMVU, one of the pioneers in the 3D avatar social space with over 1 million daily active users. The company launched VCOIN on January 12, a transferable digital currency that allows users to buy, gift, hold, earn, and convert earnings to real money. The launch comes after a November ruling by the U.S. Securities and Exchange Commission which approved a plan to enable virtual world payments through a blockchain-based cryptocurrency.
“What does VCOIN do for a metaverse economy, and I also think, for most gaming platforms?” Dayan said. “Every user, for really the first time, will be able to earn real value right across the platform. With VCOIN in the hands of every user that can purchase, hold, store, spend, exchange VCOIN for a valuable currency, every user is enabled to be an entrepreneur, a microreneur, or spend time on the platform in ways that profit themselves and others.”
Blockchain is ideal because it’s trusted and secure, and has a true store of value. The users of the crypto today, and platform users in the metaverse and on gaming platforms, over time, he said, will also trust the tokens that they’re exchanging have real value both on and off the platform.
One other key component is that the blockchain technology and protocol that you build on is accepted and available worldwide. Choosing a protocol, like etherium, that already has tens of millions of available crypto wallets in the marketplace, and platforms that support its technology, is a smart play, he said.
“There’s a tremendous opportunity to unleash the creativity of our users and allow all of them to earn real value, both on and off our platforms,” he said. ”It’s not a simple decision. It’s not just an on and off switch, but the companies in this space, players like Together Labs and the VCOIN digital currency, I think are going to lead the way and show everybody across this environment, how this can be done. And I hope over time we’ll see this part of the economy grow in a massive way.”
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