A16Z: 7 Essential Elements for Building the Metaverse

There’s been a lot of talk about the “Metaverse” since its creation in the ’90s, but especially during the pandemic (given the surge in online activity), and even more so after Facebook changed its name to Meta. 

Is this just some obscure marketing rhetoric? What is the Metaverse? How do people define this term, and where is the line between a Metaverse and another Metaverse? These are the questions people ask about the Metaverse. So let’s start with an overview of how we see the Metaverse and the intersection of the Metaverse and web3.

In many ways, the Metaverse is just another name for the evolution of the internet: more social, immersive and economically complex than it is today. Broadly speaking, there are two competing visions on how to achieve this: one that is decentralized, with substantial property rights and new boundaries, interoperable, open, and owned by the community that builds and maintains it have. The other vision—all too familiar to many today—is centralized, closed, subject to the whims of big corporations; and often extracting economic rents from its creators, contributors, and users.

The key dimension to compare these two visions is open versus closed, and the difference between them can be conceptualized as follows:


An open Metaverse is decentralized, allowing users to control identities, enforce property rights, adjust incentives, and ensure users (rather than platforms) get value. An open Metaverse is also transparent, permissionless, interoperable, and composable (others can freely build within and across the Metaverse), among other criteria.

Achieving a “true” Metaverse—open or closed—requires seven wildly popular elements. We believe that these are necessary to meet the minimum requirements known as the Metaverse. Our goal is to clear the fog of misinformation about what is and isn’t a real Metaverse for builders and potential participants, and to provide a framework for evaluating early Metaverse attempts.

1. Decentralization

Decentralization is the general governing principle of a proper Metaverse, and many of the characteristics that follow depend on or derive from this main concept.

Decentralization means not owned or operated by a single entity, nor at the mercy of a few power brokers. Centralized platforms tend to start out with friendliness and cooperation to attract users and developers, but once growth slows, they become competitive, extractive, and zero-sum in the relationship. These powerful intermediaries often abuse user rights and de-platform, and they have high-yield monopoly economies. On the other hand, decentralized systems exhibit fairer ownership among stakeholders, reducing censorship and increasing diversity.

Decentralization is important. Anyone can become “dumb” at any time, and without it, this precarious condition prevents people from building on it and hinders innovation. Because centralized platforms cannot make the same strong commitments controlled by code as blockchains, once an arrangement no longer makes sense to the whim of a leader or organization, their commitments can be revoked or changed . The most powerful way to prevent such abuses and keep the Metaverse world safe is to ensure that control is decentralized.

2. Property rights

Today, most successful video games make money by selling in-game items, such as “skins,” “emotes,” and other digital goods. But people who currently buy in-game items aren’t actually buying items, they’re renting them. Once someone leaves to play a different game, or the game unilaterally decides to shut down or change the rules, players lose access. 

People are so used to renting from web2’s centralized services that the idea of ​​actually owning something (a digital object that you can sell, trade, or carry elsewhere) often strikes people as odd. But the digital world should follow the same logic as the physical world: when you buy something, you own it. is yours. Just as courts uphold these rights in the real world, code should also be enforced online. As it happens, until the advent of related innovations such as cryptography, blockchain technology, and NFTs, true digital property rights were impossible. In short, the Metaverse turned digital serfs into homesteaders.

3. Self-sovereign identity

Identity is closely related to property rights. If you can’t own yourself, you can’t own anything. As in the real world, people’s identities must be able to persist throughout the Metaverse without relying entirely on a small set of centralized identity providers.

Authentication is about identity: proving who a person is, what they have access to, and what information they share. On today’s web, this requires popular one-click login methods such as social login or single sign-on (SSO). Today’s biggest tech platforms, like Meta and Google, use this method to gather data to build their businesses: monitoring people’s behavior to develop models that deliver more relevant ads. Furthermore, since these platforms have complete control, experimenting with innovation in the certification process relies on the honesty and willingness of the companies behind the platforms.

The cryptography at the core of web3 enables people to authenticate without relying on these intermediaries, so people can control their identities directly or with the help of a service of their choice. Wallets such as Metamask and Phantom provide a way for people to authenticate themselves. The likes of EIP-4361 (Ethereum Login) and ENS (Ethereum Name Service) allow projects to coordinate around open source protocols and independently contribute to a richer, more secure, and evolving concept of digital identity.

4. Composability

Composability is a system design principle, especially the ability to mix and match software components such as Lego bricks. Each software component only needs to be written once and can be simply reused afterwards. This is similar to compound interest in finance or Moore’s Law in computing (some of the most powerful known economic forces) in that it can unleash exponential power.

Closely related to interoperability, in order to be composable, the Metaverse must provide high-quality, open technical standards as a foundation. In games like Minecraft and Roblox, users can build digital goods and new experiences using basic components provided by the system, but it is difficult to move them out of the environment or modify their inner workings. Companies that offer embedded services, like Stripe for payments or Twilio for communications, can work across websites and apps — but they don’t allow outside developers to change or remix their black-box code.

In its most powerful form, composability and interoperability are possible across a wide range of software stacks.Decentralized finance or DeFi is an example of this powerful form. Anyone can tweak, recycle, change or import existing code. Not only that, but developers can build real-time programs in the memory of a shared virtual computer (Ethereum) at their leisure, such as Compound’s lending protocol or Uniswap’s automated market-making transactions. By combining powerful new elements of property, identity, and ownership, builders can create entirely new experiences.

5. Open/Open Source

True composability is impossible without open source, the practice of making code freely available and capable of being redistributed and modified at will. Regardless of the degree or kind, open source as a principle is so important to the development of the Metaverse that we treat it as a stand-alone component despite some overlap with composability above. 

So what does open source mean in a Metaverse development environment? The best programmers and creators, not platforms, need full control to be completely innovative. Open source and openness help ensure this. When codebases, algorithms, marketplaces, and protocols become transparent public goods, builders can pursue their vision and ambition to build more complex and reliable experiences. 

Openness leads to safer software, better understanding of economic terms among all parties, and elimination of information asymmetries. These properties can create fairer and more equitable systems that truly coordinate network participants. They could even eliminate the need for outdated U.S. securities laws designed decades ago to reconcile long-standing principal-agent problems and information asymmetries in business.

The power of composability in web3 is largely due to its open source spirit.

6. Community Ownership

In the Metaverse, all stakeholders should have a say in the governance of the system based on their level of participation.People shouldn’t just follow orders from a bunch of product managers at a tech company. If any one entity owns or controls this virtual world, like Disney World, it may offer some form of contained escapism, but never reach its true potential. 

Community ownership is one piece of the puzzle that enables network participants, including builders, creators, investors, and users, to cooperate with each other and fight for the common good. This marvel of coordination is orchestrated through the ownership of the network’s native asset token, a collaboration that would not have been possible before without the advent of cryptocurrencies and blockchain.

Beyond the technological advancements that decentralization brings, the philosophical implications of community ownership are critical to the success of the Metaverse. In web3, participants in Decentralized Autonomous Organizations or DAOs have taken this principle to heart. They are eschewing the formal rigidity of corporate structures in favor of more flexible and diverse experiments in democracy and informal governance. This allows communities to be managed, built and driven by users rather than by a single entity.

7. Immersive social

Big tech would have you believe that high-performance virtual reality or augmented reality (VR/AR) hardware is an essential, perhaps even the most important ingredient in the Metaverse. This is because these devices are Trojan horses.Companies see them as a way to become the main provider of computing interfaces for 3D virtual worlds, and thus become a bottleneck for people’s cross-border experience. 

It is not necessary to exist in a Metaverse world in VR/AR. All it takes for the Metaverse to exist is social immersion in the broadest sense. Even more important than the hardware is the type of activity the Metaverse enables. They’ll let people hang out remotely, work together, connect with friends, and have fun just like they do today with Discord, Twitter Spaces, or Clubhouse.

The pandemic has highlighted the need for more immersive experiences beyond traditional text-based communication platforms such as email, as the use of other remote conferencing and telepresence tools such as Zoom has exploded.Furthermore, thanks to the economic elements outlined earlier—property rights, self-sovereignty, community ownership—the Metaverse enables people to earn a living, engage in business, and gain status. In the typical knowledge worker workplace, people use tools like Slack to collaborate, while outside the traditional corporate world, Discord and Telegram are prevalent in the bottom-up organization movement of DAOs.

The Metaverse has nothing to do with “view” mode (a tool for viewing the Metaverse). It’s just a way to facilitate memes for those who control manufacturing hardware. 


While many companies have started building different Metaverse worlds, if any of the above parts are missing, it doesn’t count as a complete Metaverse in our opinion. We believe that the Metaverse cannot exist without the fundamental foundations of web3 technology, as shown in this framework. 

Openness and decentralization are the pillars of the entire Metaverse. Property rights depend on decentralization—and they must persist despite the influence of powerful adversaries. Community ownership prevents unilateral control of the system. The approach also supports open standards, which facilitate decentralization and composability, a closely related property of interoperability.

The development of an ideal multi-dimensional virtual world will be gradually realized. Many questions remain to be resolved before we end up with a dystopian analog of IOI-mediated oasis in Ready Player One. However, if builders adhere to these principles, this outcome is less likely.

When the Metaverse arrives, it should embody the full expression of these principles – with decentralization at its core.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a16z-7-essential-elements-for-building-the-metaverse/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-05-06 23:48
Next 2022-05-07 04:24

Related articles