How will Metaverse affect our investment, employment and lifestyle?

Meta Universe: A Practice of Generalized Token Economy

I. Introduction

The concept of “Metaverse” originated from Neal Stephenson’s science fiction novel “Snow Crash”, which describes a world where people interact with various software in a multidimensional space with digital identities [1] . The word “Metaverse” is composed of two parts: “Meta” and “Verse”: “Meta” means “transcendence”, “Verse” means “universe”, and literally translated as “transcendence universe”, meaning “a parallel to The digital world that the real world runs”. From the perspective of the development trajectory of the Internet, from the local area network to the wide area network, to the mobile Internet, and then to the blockchain known as the “Internet of Value”, the sense of participation and immersion of users has gradually increased; at the same time, with the virtual reality (Virtual Reality) With the development of digital technologies such as VR, Augmented Reality (Augmented Reality, AR), fifth-generation mobile communication technology (5G), cloud computing, and the Internet of Things, the distance between virtual and reality is gradually shrinking. Under this historical trend, the meta-universe in which immersion, participation, interactivity, and openness have reached new heights is the new evolution direction of the Internet of Information and the Internet of Value.

In addition, the development of modern economy and modern finance has promoted the continuous prosperity of the real economy and the virtual economy, but in the long run, the virtual economy will grow faster than the real economy. Lin Zuoming [2] pioneered the theory of generalized virtual economy, and defined “generalized virtual economy” as a general term for the economy that “satisfies people’s physical and psychological needs at the same time and is dominated by psychological needs, and only meets people’s psychological needs. “, proposed that “the dual value movement that is cyclically evolving by accommodating physical value and virtual value into the information medium that is constantly released by each other is the basic path for the development of the generalized virtual economy.” Wu Tong [3] proposed a generalized token economy theory on the basis of the generalized virtual economy theory, and defined “token economy” as “a circulated encrypted digital economy”. In fact, Metaverse is a generalized token economic practice under the trend of the deepening development of digital technology, the deepening of consumer demand for the digital world, and the urgent need for convergence of different digital spaces. As far as I know. When the “singularity” of the meta-universe is reached, mankind’s exploration of the Internet and the digital world will turn a new page.

2. Meta universe is a highly developed token economy

    The metaverse realizes the vision in the science fiction novel “Avalanche”. With the support of digital technology, through equipment and terminals, humans can enter the virtual multi-dimensional world simulated by computers through links, and things in the real world can be selectively reproduced in the virtual world. , Things that do not exist in the real world can also be created in the virtual world. Humans can “restart life” in the virtual world through digital avatars and obtain digital assets in the virtual world. These will be permanently recorded in the digital world. In March 2021, Roblox, an online game creation community company known as “Meta Universe’s First Share”, was listed on the New York Stock Exchange, advancing “Meta Universe” from the conceptual stage to the landing application stage. Due to the decentralization and difficulty of tampering, the blockchain has been incorporated into the meta-universe ecology as an indispensable element. At this stage, the game is an important entrance to the meta-universe. In 2021, phenomenon-level blockchain games have also appeared, such as Axie Infinity (token is AXI), Sandbox (token is SAND), Decentraland (token is MANA) Wait. As an indispensable part of the meta-universe, the blockchain has become the last piece of the puzzle of the meta-universe as an objective entity.

The biggest difference between Metaverse and previous virtual products based on digital technology is that the goal of Metaverse is to form a systematic and complex digital world based on multiple digital technologies. This world truly realizes data confirmation, pricing, trading and empowerment. The meta universe is objectively existing, open source, dynamically evolving, and user-oriented. It is essentially a man-made virtual parallel world, which is also a major significance of the token economy. The meta-universe world can also interact with the real world in a variety of ways, and its economic form is essentially a highly developed token economy. Under the credit currency system, Meta Universe, as a highly developed token economy, has become a field where credit currency flows intensively; as a digital technology to complete the Meta Universe puzzle, Meta Universe and Meta Universe certificates have become objective existences. , An entity that cannot be tampered with, the meta-universe token can even become a value existence independent of the meta-universe.

(1) Metaverse is a trend of modern economic development

When the Bretton Woods system collapsed in the 1970s and humans entered the era of credit currency, the over-issuance of sovereign credit currency became a historical trend. This not only led to the birth of decentralized crypto assets such as Bitcoin, but also credit The imbalance between investment in the physical and virtual fields [4] . From the perspective of the generalized token economy, the unbalanced credit distribution has resulted in a far greater number of high-level virtual tokens than physical tokens and low-level virtual tokens. When there is a serious run on physical tokens and low-level virtual tokens , The financial crisis was born, which is also the reason why the virtual economy is prone to bubbles and the policy logic of governments in various countries to promote “getting out of the virtual to the real”.

In particular, the new crown epidemic that began to spread globally in 2020 has greatly promoted the release of central banks in various countries. The Federal Reserve has launched unlimited quantitative easing (Quantitative Easing, QE), which is essentially the monetization of fiscal deficits. In February 2020, the Fed’s balance sheet was only about 4.1 trillion U.S. dollars. As of the end of July 2021, the Fed’s balance sheet exceeded a record high of 8.2 trillion U.S. dollars. The European Central Bank, the Bank of Japan, and the Bank of England have also put a lot of liquidity into the market. Starting in March 2020, the Federal Reserve will maintain the benchmark interest rate at 0%-0.25%. Excessive liquidity and low interest rates have once again pushed the overall valuation of the high-tech sector. The strong trends in Tesla’s stock price and Bitcoin price since 2020 are typical representatives. From the perspective of historical development trends, truly valuable technology companies and projects will gradually absorb bubbles and realize value. Technology giants such as Apple, Amazon, Alphabet, Facebook, Alibaba, Tencent, Tesla, and Bytedance have all experienced During periods of high valuation and high development, the capital bubble was eventually absorbed and its value was realized. However, compared to products provided by a single technology such as blockchain, artificial intelligence, big data, Internet of Things, edge computing, and brain science, Meta Universe, as a grand and self-consistent economic and governance system, is a global flow of sky Sexual injection provides a wide space. The long-term development of science and technology and the loose liquidity under the long-term cycle constitute a macro environment suitable for the development of the meta-universe.

At the same time, incorporating data into the category of production factors has become a global consensus. In October 2019, the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China deliberated and approved the “Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Upholding and Improving the Socialist System with Chinese Characteristics, Promoting the Modernization of the National Governance System and Governance Ability”. Incorporated into the framework of production factors. The “Outline of the Fourteenth Five-Year Plan for National Economic and Social Development of the People’s Republic of China and Long-Term Goals for 2035” adopted in 2021 provides support for the integration of data into production factors from the operational level. The meta-universe itself is a market-oriented ecosystem of data generation, circulation, utilization, and reorganization. In the meta-universe, data is naturally a factor of production and the most important factor of production. Metaverse provides a market-based mechanism for incorporating data into production factors.

In addition, the global spread of the new crown pneumonia epidemic has intensified the development of the contactless economy. Digitization, networking, and intelligence have become new driving forces for economic development. The microeconomic organization structure is also developing toward digitization, networking, and intelligence. The social and economic organization system based on the enterprise system has been impacted to a certain extent. The blockchain-based Decentralized Autonomous Organization (DAO) has completely changed the form of traditional organization management in the past. It has distributed, autonomous, and The core attributes such as flat openness are of great significance for promoting and optimizing large-scale human collaboration under the digital economy paradigm [5] .

As a product of the global open source community, large technology companies and DAOs will become contributors to the ecology of the metaverse, but in the long run, the organization and operation mode of the DAO can better adapt to the development of the metaverse. For example, Yield Guild Games (YGG) is a virtual community that optimizes community holding assets and achieves its maximum utility. At the same time, the YGG community also issued the same-name token YGG, which combines the advantages of non-fungible tokens (Non-Fungible Token, NFT) and open finance (Decentralized Finance, Defi), which is a blockchain game economy Brings a liquid mining model, and at the same time adds value to the virtual world through the development of game content and the internal economy of the game. Open finance has significant advantages over traditional finance. It can reduce the risks caused by centralized finance and help improve the efficiency of price discovery and marketization of digital assets. Distributed ledgers can help improve transaction transparency and reviewability. Smart contracts It improves the financial standard, programmability, flexibility and relative isolation of risks [6] . Open finance essentially provides a complete set of economic models for Meta Universe. While meeting the spiritual needs of global users, Metaverse also effectively reduces the probability of human-to-human contact and disease transmission. While meeting the needs of users, it conforms to the trend of contactless economic development.

(2) Blockchain realizes the immutability and interoperability of the meta universe

At this stage, Metaverse has two basic construction and realization paths: First, the large-scale Internet platform relies on its rich traffic, data and scenarios to build a metaverse based on its own ecology. The listing of Roblox in March 2021 will promote the concept of “Meta Universe” to the world. In July 2021, Facebook founder and CEO Zuckerberg announced that within five years, Facebook will transition from a social company to a meta-universe company. In addition, domestic and foreign Internet platforms such as Nvidia, Tencent, ByteDance, Google, Disney, Amazon, Soul, etc. have also begun to deploy the meta-universe industry chain. The second is to build several open source meta-universes on the blockchain, and realize interconnection through cross-chain. This path is closer to the essence of the meta-universe, and it is also a long-term way to build and realize the meta-universe.

1. Three obvious flaws in the construction of the meta-universe based on the “big Internet route”

Although large-scale Internet platforms have significant advantages in terms of traffic, data, scenarios and underlying technologies, there are three obvious shortcomings in the “big Internet route” of Metaverse:

First, the meta-universe system based on the “big Internet route” is too centralized. All the services and rights that users enjoy in the meta-universe are closely related to the Internet giants that built the meta-universe ecology. The meta-universe is essentially a vassal of the Internet giants. . When Internet giants have operational problems, the meta-universe they have built will also have a greater negative impact. As the parallel digital world of the real world, Metaverse is unimaginable and unsustainable if it is just a few lines of code on the centralized Internet giant server. In addition, as a virtual parallel world of the real world of mankind, the meta-universe should represent the interests of a community with a shared future for mankind. The Metaverse under the “Great Internet Route” undoubtedly represents the interests of these Internet giants and the countries where they are located, and will extend the hegemonism and power politics in the real world to the Metaverse, which violates the purpose and philosophy of the Metaverse.

Second, the meta-universe based on the “big Internet route” cannot solve the problem of data governance. Internet giants currently possess and deprive billions of user data at nearly zero cost, forming a de facto “digital capitalism”, which hinders the confirmation, pricing, and circulation of data. At this stage, digital capitalism and financial capitalism have a “convergence” trend. Starting in 2019, Facebook and other digital giants planned to launch the global stable currency Libra (renamed “Diem” in 2020), which is the product of this trend. [7] . The global anti-monopoly of the digital economy is also out of precautions. Building Metaverse on a large-scale Internet platform not only does not help solve the problem of data governance, but it will intensify data monopoly and financial penetration.

Third, the meta-universe based on the “big Internet route” is difficult to solve the interoperability problem, and it is destined to form “meta-universe islands.” Different games, social interactions, animations, and movies have formed different IPs. The meta-universe systems built on this are also different, but each meta-universe system needs to be interconnected with each other, so as to meet the limit of human imagination. Give full play to the value of the meta universe. It is foreseeable that the meta-universe data, ecology, and value under the “big Internet route” are fragmented. It is difficult for fans of different IPs to witness each other’s “idols” converge on the same platform, and the huge value generated by this part will be stifled. At the same time, it is difficult to form a complete meta-universe system. In addition, the wide acceptance of digital assets is also an asset-level interoperability. When the Internet platform does not use blockchain technology, but builds digital assets on a centralized database, its essence is no different from the existing digital points, and it cannot form a broad consensus on a global scale, so it cannot become a meta universe. Core assets.

2. The relative advantages of building a meta-universe based on the blockchain

Based on the three major shortcomings of the development of the meta-universe based on the “big Internet route”, the deeper the ecological development of the meta-universe, the more thoroughly it will become apparent. The second path of building a meta-universe based on the blockchain can effectively solve these ills and build a free digital parallel world, specifically:

First, the meta-universe system based on the block link line is a decentralized system. This system belongs to all users and organizations and individuals who contribute to the system, rather than any Internet platform or vassal of sovereign states, and represents humanity. The interests of a community with a shared future. Compared with the “centralization-decentralization” governance model of the chain government economy, Metaverse provides a governance model that is mainly driven by market factors [8] .

Second, the meta-universe based on the block link line can realize the confirmation, pricing and transaction of data, realize the integration of data into the production factors, and build a virtual parallel world with data as the first production factor. As a data governance technology, blockchain can realize the right to data from the source, obtain the use value of data through privacy calculation under the premise of data desensitization, and form market value through circulation transactions in the secondary market [9] .

Third, the core digital assets based on the blockchain have gradually formed a broad consensus around the world. The metauniverse based on the blockchain can solve interoperability issues through cross-chain and avoid the formation of “metauniverse islands.” Since 2020, on a global scale, listed companies and hedge funds have begun to hold a large number of Bitcoin positions. As of March 2021, according to Bitcoin treasuries data, 42 companies have held 1.35 million bitcoins, accounting for 6.43% of the 21 million bitcoin supply cap, and valued at approximately $65 billion. In February 2021, Canada approved the world’s first Bitcoin-trading open-end index fund (Exchange Traded Fund, ETF); in June 2021, the Brazilian blockchain investment company QRCapital’s Bitcoin ETF was traded on the Brazilian Stock Exchange. The United States Securities and Exchange Commission (SEC) is also studying and approving Bitcoin ETFs, including blockchain investment institutions such as Winklevoss, Solidx, Bitcoin Investment Trust, VanEck, etc., as well as Victory Capital, Simply, Ark, Asset management companies such as Invesco and investment banks.

In fact, with the increase in the scale of encrypted assets such as Bitcoin, the degree of recognition has gradually increased, and it has shown a strong dual characteristic of risk-hedging, and the speed of traditional capital entering encrypted assets has gradually accelerated [10] . In June 2021, The Basel Committee issued a consultation document “Prudent Handling of Risks in Encrypted Assets”. The first group of encrypted assets includes traditional tokenized assets, encrypted assets with effective stability mechanisms, and bank capital requirements In order to be at least equivalent to traditional assets, the stability mechanism has additional requirements; the second group of encrypted assets, including Bitcoin, must comply with the new prudent capital constraint, which is a risk weight of 1250%. Although the Basel Committee still regards Bitcoin as an asset with a relatively high risk factor, it is a huge improvement from the perspective of historical evolution.

At the same time, the main cross-chain blockchain projects such as Polkadot, Cosmos, Nervos, and Conflux have achieved rapid development, the public chain system has become increasingly complete, and the blockchain as the underlying support of the Internet of Value has become increasingly solid. Solving the problem of “blockchain islands” at the blockchain level means solving the problem of “metacosmic islands” at the meta-universe level.

All in all, building a meta-universe based on blockchain is a development path that is more in line with the nature of the meta-universe. This path is also more promising in the long-term, but this does not mean that the Internet giants have nothing to do in the meta-universe ecology. In fact, Internet giants are important contributors to the meta-universe ecology, and they play an irreplaceable role in terms of underlying technology, traffic portals, and scene building. It’s just that in the long run, the Internet giant’s vision of monopolizing the meta universe cannot be realized.

(3) The information dimension of the link between the two worlds

As a parallel virtual world of the real world, the meta-universe connects with the real world mainly including information and value. In the information dimension, the most important linker for the transmission of information from the real world to the digital world is the Oracle; the digital world transmits information to the real world through sound, images, video, text and other channels, and is connected to the current people on the Internet. There is no essential difference in the way of obtaining information. At the same time, there are some projects and institutions that specialize in the extraction and analysis of data on the chain, such as Chainalysis, Amberdata, Blockchair, Flipsidecrypto, etc. Therefore, this article focuses on the oracle. As a decentralized information transmission mechanism based on the blockchain, the oracle opens up the information channel from the real world to the parallel virtual world, forming a closed loop of the information transmission path of the meta-universe.

The blockchain has no oracles, just like a computer without the Internet. A blockchain without an oracle cannot establish contact with the world outside the chain, and can only refer to the information in the internal ledger of the blockchain. For example, one of the most basic function implementation modes in the blockchain is smart contracts. Smart contracts are discrete computer program components deployed in blockchain nodes. Their working principle is similar to the “if-then; else-then” of computer programs. “Statement, the more complex the smart contract contains more statements [11] . And often the trigger conditions in “if” and “else” statements come from the outside world, and interconnection is an important foundation for blockchain to play a greater role.

“Oracle” is a complete set of facilities that inject information outside the blockchain into the blockchain. At this stage, there are two more mainstream models for the oracle: The first model is to rely on one or some authoritative centralized information sources (People’s Daily, Xinhua News Agency, Bloomberg, Reuters, etc.), oracle machines access external data through smart contracts to achieve functions. However, this model has a high degree of centralization, and some information is not involved in authoritative centralized information sources. The oracle project of this model is represented by ChainLink, its token is Link, and its core function is to bridge the world on and off the chain in order to successfully run a decentralized smart contract connected to the real world. The second mode is to discretize data and information outside the blockchain and then use economic incentives and voting to inject it into the blockchain system [12] . The oracle project of this model is represented by Augur, and its token is Rep. Its core function is to motivate users to accurately report information through rewards and punishments to achieve off-chain information injection into the chain. During the reporting period, the designated reporter has 24 hours to submit a report on market results.

(4) The value dimension of the link between the two worlds

As the parallel digital world of the real world, Metaverse not only needs to realize the closed loop of the information dimension with the real world, but also needs to realize the closed loop with the real world value dimension. The value carrier that realizes the link between the two is the central bank digital currency (Central Bank Digital Currency, CBDC). ) And Global Stable Coin (GSC). CBDC is a digital currency with the essential attributes of modern currency issued by the central bank based on digital technologies such as the Internet, blockchain, and artificial intelligence. According to the Bank for International Settlements (BIS) report, as of January 2021, 86% of central banks in the world are actively exploring CBDC, although most of them are still unlikely to issue their CBDC in the foreseeable future. A considerable number of central banks are moving forward: about 60% of central banks are experimenting with digital currencies, and 14% of central banks are advancing the development and pilot projects of CBDC. At this stage, CBDC is mainly used for domestic payments and does not require multi-party accounting, so most of them have not fully adopted blockchain technology; at the same time, the development, pilot and promotion of CBDC is still in the early stage, so smart contracts have not been written into [13] . However, as the demand for CBDC cross-border payment and smart currency increases, it is a general trend for CBDC to adopt distributed accounting and write smart contracts [14] . The security and legal reimbursement of CBDC are its most important advantages. When CBDC adopts distributed ledger accounting and writes into smart contracts, it will become an important value tool linking the meta universe and the real world.

At this stage, the main way to link the meta-universe and the real-world value dimension is GSC. GSC is a digital currency issued by the non-public sector based on the blockchain that remains anchored to the price of legal tender. According to the GSC model of maintaining price stability, it can be divided into GSC based on the mortgage economy system and GSC based on the “algorithmic central bank” model. The GSC based on the “algorithmic central bank” model maintains price stability in the same way as the central bank regulates the dynamic balance of currency supply and demand. Its progressive significance lies in the automation and programming of this process with the help of codes, and the purchase and sale of base currencies through codes to achieve prices. Stable, but the flaw is that the consensus of this model of stable currency is relatively weak, and it is easy to be reduced to a capital market and a Ponzi scheme, but the situation has undergone some changes in 2021. Although phenomenal algorithmic stablecoins such as Terra, Ampleforth , and Frax appeared in 2021, GSC based on the mortgage economy still dominates the mainstream.

According to the price stability model based on the mortgage economy system, it can be divided into on-chain mortgage mode and off-chain mortgage mode according to whether the mortgage assets are on the chain. The assets of the off-chain mortgage model are not on the chain. The mortgage assets are deposited in commercial institutions under the blockchain, mainly in assets such as US dollars, euros, and British pounds. The market share of US dollar assets accounts for more than 95%. Diem, a global stable currency that has received much attention, is also based on this model. The mainstream off-chain mortgage stablecoins at this stage include USDT, USDC, GUSD, PAX, TUSD, etc. The effectiveness of the off-chain mortgage model depends on whether the reserve assets are subject to transparent and strict regular audits to ensure the full value of the mortgage assets, and there will be no systemic risks in the event of a run. In addition, user scale and trust, stable currency issuance, etc. are also important factors that affect the off-chain mortgage model.

The on-chain mortgage model has less manual participation throughout the whole process, and is basically based on codes and algorithms. Users can check mortgage assets in real time. In fact, it constitutes a commercial bank under the open financial paradigm. Due to the large barriers in technology, goodwill, governance, etc., GSC projects based on chain mortgages have a strong head effect. Representative projects are Maker DAO Dai, Havven, Augmint, etc. Users generate their own Collateralized Debt Positions (CDP) based on smart contracts. There is no Central Counterparties (CCPs) in traditional asset transactions in the system, so there is no central counterparty risk. MakerDAO Dai user borrowing the processes of FIG. 1 FIG.

How will Metaverse affect our investment, employment and lifestyle?

Figure 1 MakerDAO Dai’s lending process

The difficulty of the on-chain mortgage model is that the price of its mortgage assets (mainly Ethereum) also changes and fluctuates all the time, and the price of mortgage assets rises and falls asymmetrically: when the price of mortgage assets rises, the same mortgage assets More stablecoins will be generated, and the mortgage economic system will increase the lending rate to suppress the excessive release of stablecoins; when the price of mortgage assets drops, how to ensure the price stability of the mortgage economic system becomes a crucial issue. There are two main measures to solve this problem. The first measure is over-collateralization. MakerDAO Dai adopts an over-collateralization model (currently, the over-collateralization rate is 150%). When the market price of mortgage assets drops, the Maker system operates according to the real-time mark-to-market code and auctions the mortgage assets to maintain the price of Dai relative to the U.S. dollar Stablize. However, if a black swan event occurs in the market, leading to a sharp drop in the price of mortgage assets, the algorithm-based auction mechanism tends to become ineffective, so a second measure-“introduction of system equity owners” needs to be introduced to supplement it. Take MakerDAO Dai as an example. In addition to the stable currency of Dai, there is also a token representing the rights and interests of the system- MKR . The holder of MKR as the equity owner of MakerDAO exercises the “Buyer of Last Resort” (Buyer of Last Resort). ) Functions. In addition to sharing the economic benefits of the system (user loan interest income minus operating costs), MKR holders also enjoy governance, decision-making and voting rights. In MakerDAO’s community governance, each MKR represents one vote. When the black swan event occurs and the price of mortgage assets drops sharply, MKR holders can vote in the community to decide whether to initiate a global liquidation. When MKR votes to initiate global liquidation, the creation and operation of CDP will be suspended, and keepers will be given a period of time to process the corresponding claims of Dai and CDP holders based on a fixed feed price. MKR holders will act as the MakerDAO economic system. “The last buyer”. MKR can also be traded on encrypted digital currency exchanges and over-the-counter (OTC) markets. Its price reflects the market’s valuation and pricing of the project. MKR’s price fluctuations also play a role in the Dai system. The role of risk management and pricing. MakerDAO Dai economic system as a way to maintain price stability Figure 2Shown.

How will Metaverse affect our investment, employment and lifestyle?

Figure 2 MakerDAO Dai economic system price stabilization method

As of August 2021, the total market value of GSC has exceeded US$116 billion, and the transaction volume in the second quarter of 2021 has exceeded US$1.7 trillion, which has become an important value dimension of the link between the meta universe and the real world at this stage. As USDC issuer Circle submits a listing application to the SEC, GSC’s market capitalization scale and transaction volume will further increase, and before CBDC adopts distributed accounting and writes into smart contracts, it will mainly assume the function of linking two world values. With the acceleration of CBDC on a global scale and the advancement of global infrastructure such as multilateral central bank digital currency bridges, CBDC and GSC will form a public-private partnership system linking two world value dimensions.

3. Metaverse promotes the combination of reality and reality

    The generalized virtual economy includes not only economic activities that only meet people’s psychological needs, but also economic activities that meet people’s physical and psychological needs and are dominated by psychological needs. Metaverse not only promotes the development of virtual economy that satisfies people’s imagination, but also promotes the development of related real economy, and realizes the positive cycle of “virtual economy-real economy” development. The development of the related real economy has provided Metaverse with a more realistic immersion experience, with higher-speed computing power, larger storage capacity, and more assets on the chain, which comprehensively promotes the evolution of human society to a higher-dimensional digital society.

(1) Metaverse promotes the development of related hardware industries

The Internet is an important prerequisite for the birth of the meta-universe. It not only provides a physical network foundation that integrates network and computing power, but also produces a large amount of native high-quality content (such as games, audio, video, etc.), which actually constitutes the meta-universe Infrastructure for virtual interconnection. The development of Metaverse not only needs to realize the virtual interconnection of users, but also needs to allow users to obtain a real virtual experience, that is, to provide users with a realistic and immersive interactive experience to the greatest extent, and at the same time, users must maintain a sense of the real world. Perception. Therefore, the realization of the digital parallel world of Metaverse is inseparable from the development of the hardware industry related to it. Specifically, it includes more realistic immersive experiences, involving VR, AR, MR (Mixed Reality), Extended Reality (XR), visual rendering technology and other industries; higher-speed computing power, involving AI (Artificial Intelligence), 5G, cloud computing, edge computing, blockchain and other industries; larger capacity storage, involving distributed storage (Inter Planetary File System, IPFS), etc.; larger scale and scope of assets Chain and tokenization (Tokenization) include both the on-chain of traditional assets and the on-chain of digital assets.

VR and AR can already be applied to some commercial scenarios at this stage, such as 3D movies, 3D concerts, simulated driving training, online virtual tourism, etc., but distance provides users with smooth, stable and durable large-scale interaction and sharing of virtual sharing There is still a long distance to experience. The reason is that VR and AR terminals can only give people a surreal experience of partial senses, and cannot realize the sharing and interaction of all senses. It requires the collaborative development of technologies such as Brain-Computer Interface (BCI).

BCI refers to the establishment of a direct signal channel between the human brain and other electronic devices, thereby bypassing language and limbs to achieve interaction with electronic devices. Since all human senses are ultimately formed by transmitting signals to the brain, if BCI is passed, in principle, it will be able to fully simulate all sensory experiences by stimulating the corresponding areas of the brain. In principle, compared to VR and AR devices, a brain-computer interface directly connected to the human cerebral cortex is more likely to become the best device for interaction between players and the virtual world in the future meta-universe era. Companies that mainly deploy BCI include NeuraLink, Kernel, Mindmaze, etc.

At the network transmission level, Meta Universe mainly ensures the low latency of user interaction in order to obtain a more realistic body feel. The current latest technological development is the high-speed and low-latency network transmission technology represented by 5G. The high-speed network industry represented by 5G has entered large-scale commercial use, and has become a must-see for the telecommunication industry of all countries. 5G-related companies mainly include Huawei, ZTE, Nokia, Samsung, Ericsson and Qualcomm.

In terms of computing power, Metaverse theoretically has no upper limit on computing power, which puts forward higher standards for personal terminals in terms of portability, high performance, and parallelization. Therefore, cloud computing can effectively use computing power clusters and edge computing resources due to its more scalable computing power, thereby lowering the threshold of computing power for personal terminals and becoming the mainstream way to increase computing power. At this stage, cloud computing has gained a certain degree of application in the game field, and it is expected to become a powerful computing power support for the meta-universe industry.

(2) Metaverse helps establish the digital labor paradigm

At this stage, Meta Universe is still in its early stage of development, and blockchain games and artwork on-chain have become important entrances to Meta Universe. The industry chain based on blockchain games is developing rapidly, and the components of the industry chain such as development platforms, promotion channels, and game power leveling are in the process of rapid industrialization. Take Roblox, which has the “first stock of the meta universe” as an example. One of the important significance of Roblox to the meta universe is that it provides a “Play to Earn, P2E” economic incentive model, making the game a pure entertainment and attribute on a social added earnings, economic systems, such as in FIG. 3 FIG.

How will Metaverse affect our investment, employment and lifestyle?

Figure 3 Roblox P2E economic incentive model

Data source: Roblox.

There is a lot of room for improvement in Roblox’s P2E economic system. For example, users basically cannot directly realize virtual assets, and the right to interpret the virtual assets they create and hold (including the interpretation of ownership and income rights) does not belong to the user, but belongs to the Internet platform that created it. This is also an important reason why Metaverse’s “Great Internet Route” cannot last. The labor cooperation paradigm under this economic model is only a transitional form. “Labor” needs to be redefined under the digital economy paradigm.

Under the digital economy paradigm, many jobs are not done by humans, but by machines based on computing power. This was first seen in the concept of “Proof of Work” (POW) that was formally proposed in 1999. For standardization, the concept of POW was applied to Bitcoin in 2009, and it has become the most classic algorithm consensus in the public chain. The operating mode and distribution system of POW vividly reproduce Marx’s labor theory of value and the distribution system according to work under the digital economy paradigm: commodity value is condensed from undifferentiated general human labor; in the era of digital economy, undifferentiated general human labor To a large extent it is not done by human direct labor, but based on computing power. Standardized electricity is a universal commodity in the world, and computing power and electricity condense undifferentiated human labor. Corresponding to the mode of production, the number of tokens allocated is directly proportional to the computing power contributed by market participants.

Due to disadvantages such as high energy consumption and slow data processing of POW, a proof of stake mechanism (Proof of Stake, POS), a delegated proof of stake (DPOS) mechanism (Delegated Proof of Stake, DPOS), and a directed acyclic graph (DAG) have gradually emerged. Wait for the consensus of the algorithm, but this also gave rise to a sociological question, when a large amount of repetitive work is done by machines, what do humans do? Will there be a large-scale unemployment problem? The meta-universe provides a solution to this problem, that is, people engage in various activities in the meta-universe world, that is, “work” in the meta-universe generates value, that is, the so-called “play to earn money in entertainment” (Play to Earn). , P2E). This is essentially a form of “Proof of Human Work” (POHW), which requires investment of time and energy in units of natural persons, and “mining” with time and energy as the core element. This is in line with one of the main characteristics of the generalized token economy: with the increasing degree of economic development, people only have 24 hours a day, and human attention has become a relatively scarce resource. In fact, GameFi (ie “gamification finance”) represented by Axie Infinity and others is confirming this law of value. With the recurrence of the new crown pneumonia epidemic on a global scale, unemployment rates in some countries and regions remain high. For some residents of these countries and regions, GameFi has become a major source of income. Globally, with the deepening of the digital economy and the recurrence of the new crown pneumonia epidemic, “DAO+Defi” is becoming a new employment and collaboration paradigm.

Under the digital economy paradigm, “labor” can be defined as two paradigms: The first type is general labor that meets the rigid demands of social use value. This labor can be completed by humans or machines. With the deepening of the development of the digital economy, the proportion of machines completed is increasing. The second category is “quasi-individualized” labor that meets the needs of human psychological value. This kind of labor generally needs to be completed by people, and relatively individualized labor is completed under a certain situation setting, with time and energy as the main measurement variables.

(3) Metaverse deepens the development of virtual economy

Before Metaverse, although the virtual economy has made great progress, it is basically relatively fragmented, decentralized, and completely dependent on the real world. The formation of virtual parallel worlds did not have a relatively feasible landing path until the birth of the concept of meta-universe. Although the meta-universe is closely related to the real world, it also maintains a certain degree of independence; at the same time, the meta-universe with digitalization as its basic feature is a relatively decentralized and cohesive system.

There are two main paths for the continuous deepening and development of Metaverse in the asset dimension: First, existing assets are on the chain, which is mainly manifested in the circulation of equity, bonds, notes, gold and other assets on the chain. The asset chaining of this model is greatly affected by the regulatory authorities of various countries. The second is to put digital native assets on the chain. A more mainstream path of this model at this stage is the development of Non-Fungible Token (NFT). The important feature of NFT is that each NFT has a unique and unique identifier. The two are not interchangeable. The smallest unit is “one” and indivisible. Therefore, it is very suitable for marking exclusive and indivisible rights and assets. Can realize free transaction and transfer. In terms of technology, NFT’s token protocol standard is mainly based on ERC721, while the general homogenized token (Fungible Token) protocol standard is based on ERC20.

Through the blockchain, NFT breaks the threshold restrictions on property rights, copyrights, and regulations under the traditional economic paradigm, and gives full play to the potential of data, knowledge and other elements, avoids the monopoly of Internet giants to a certain extent, and achieves a combination of elements and a long tail. Innovation will further release the vitality and vitality of the digital economy. NFT also ushered in a period of vigorous development after going through the proof-of-concept stage.

In June 2021, the world’s largest crypto asset exchange Biance NFT platform officially launched limited edition NFTs of world-class master paintings such as Da Vinci, Van Gogh, and Monet. In addition, GameFi has also moved on a path of rapid development. According to DappRadar data, as of July 2021, the transaction volume of top NFT collectibles such as Axie Infinity, CryptoPunks, and ArtBlocks has increased by more than 300%, and the total sales of NFTs have exceeded 1.2 billion US dollars. At the same time, the transaction volume of NFT issued with elements such as sports, animation, and knowledge payment is also increasing rapidly. NFT has become a hot track in the blockchain industry in 2021.

Four, summary

    In 2021, with the listing of Roblox on the New York Stock Exchange, the concept of Meta Universe was born. “Meta Universe+” has become a new trend sweeping the Internet, blockchain, and finance and other major industries. The new crown pneumonia epidemic is globally affected. Repetition has promoted the process of the meta-universe, and recreating a digital world parallel to the real world seems to be within reach. As a highly developed token economy with the characteristics of sustainability, openness, autonomy, and immersion, Meta Universe is in line with the development trend of modern economy. The main development paths of Metaverse are the “big Internet route” and the “blockchain-based construction route”. In the long run, the “blockchain-based construction route” can truly achieve the goal of a parallel digital world. However, the Internet giants are As an important builder of the meta-universe ecology, the immutability and interoperability provided by the blockchain are essential. The meta universe transmits information to the real world through multiple channels such as sound, image, video, and text, and the real world transmits information to the meta universe mainly through oracles. Global stablecoins and central bank digital currencies are important tools that link the two worlds in the value dimension. As an advanced format of the generalized token economy, Meta Universe can promote the combination of virtual and real, promote the development of related hardware industries, help the establishment of digital labor paradigm, deepen the development of virtual economy, and continue to iterate and improve itself. Although the world of the meta universe is gorgeous and fascinating and has a great future, it still requires the landing and breakthrough of various lines to achieve the expected state. It is foreseeable that this “singularity” is approaching.

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