Abstract: Metaverse: A virtual reality space where users can interact with computer-generated environments and other users.
What is Metaverse?
At a basic level, the concept of “Metaverse” is a digital world where players can participate in and create social and economic activities with other individuals in a shared virtual environment. These computer-generated environments range from popular detail-oriented destinations (such as Hawaii or outback Australia) to the dystopian future worlds in movies that we all love; the possibilities are endless. Games like Runescape, Minecraft/Roblox, Counterstrike, Club Penguin and even Pokemon Go show the younger generation how to communicate with each other in the virtual world and teach key economic principles that will inspire many people’s entrepreneurial spirit.
Although many of these games provide storylines or goals, due to the nature of the open world and the introduction of the economy, players begin to develop their own motivations and goals. Players begin to work outside the boundaries of established gameplay, and begin to speculate on assets in the game and develop peer-to-peer market spaces. For example, players can trade on the “big exchange” in the Runescape game and play multiple roles in a lively market. As a market maker, players can facilitate transactions and provide liquidity for buyers and sellers. As laborers, players can use their time, skills and knowledge to cultivate resources in the game and sell goods on the market. As collectors, players can hype and buy rare items that they think are valuable. Finally, as a hardcore player, players can buy the best items to get a better status for their characters.
The beginning of the peer-to-peer virtual economy was a breakthrough. For the first time, players have other options besides the choices provided to them by game designers; economic benefits, entertainment, and social interaction are all intertwined in a pseudo-decentralized way .
With the popularity of these games, the problems of centralization and closed-loop are quickly exposed. Although players pay for the game, they do not own the assets collected and purchased in the game, nor can they transfer items from one game or “world” to another (even if it is a direct sequel or upgrade). Many companies have even implemented strict terms of service regarding the exchange of in-game assets for fiat currency. Enter the concept of Metaverse.
When most people hear the concept of Metaverse, they think of a utopian society in “Ready Player One”. Although this is entirely possible, I think the first popular iteration will be a more realistic social environment that mimics the experience we currently enjoy. We all know how much life has changed in the past year, so let’s paint a picture of Metaverse. You have finished your work this week and are going to hang out on Friday night with some friends who live on opposite ends of the world. Due to the distance between you, you choose to see your favorite DJ’s first performance in Decentraland. Due to the time difference, you have a few hours before the concert, and who will go to a concert without a preview? You all went to the local ZED Run (a virtual NFT horse racing game) racecourse, watched some horse races and drank a few cold drinks. Your friend mentioned that a horse he owns will race in 10 minutes. If he wins, he will treat him to the next round.
When you and your friends cheered for Strawberry Diesel, she pulled the distance and crossed the finish line in first place. What a beautiful day! You guys went on with excitement and all went to the pub on the spot. Your friend ordered the round of wine he promised. You all continued to talk about how exciting this game was. Ten to fifteen minutes have passed and you hear the doorbell ring. The local food/alcohol delivery service just delivered the 6 packs of beer that your friend ordered at the ZED Run bar. Now back to Metaverse, with a cold drink in your hand, you all clinked your glasses and continued to tease. The day is still going on. You drank a few more glasses in the bar and watched some games. It’s finally time for the main event…..
What are non-homogeneous tokens and how do they make this possible?
Non-homogeneous tokens, usually called NFTs, are defined as “data units stored on the blockchain after a quick search on Google, which proves that assets are unique and therefore not interchangeable. NFTs can usually be used to represent Items such as photos, videos, audios and other types of digital files”. Although we now see that NFTs mainly represent digital items, it is a popular misunderstanding that NFTs are only numbers and cannot represent physical objects. The original ERC-721 standard was launched in January 2018 with the purpose of creating and implementing a unified API in smart contracts to make it possible to track and transfer these tokens.
Based on the popular ERC-20 token standard, ERC-721 token adds a further identifying element when distinguishing tokens. The original proposal stated that the new standard was inspired by the ERC-20 standard, but “not enough to track NFT, because each asset is different (irreplaceable), and a certain number of tokens are the same (fungible) “. ERC-721’s unique properties make identifying new usage to develop; virtual collectibles, real estate, works of art, debt co- about and other “negative value” co- about . Simply put, “Generally speaking, all houses are different, and no two kittens are the same. Negative value contracts are distinguishable, and you have to track the ownership of each separately.”
Now that we understand what NFT is from a technical point of view, and why we should create NFT, let’s explore in depth why this technology is the core of Metaverse. Many of the issues we discussed earlier are the result of a single centralized studio or company controlling all aspects of the game/economy. Since traditional development studios receive all the rewards of these digital economies, they have no incentive to share these revenues with players. Now, visionary studios are beginning to see that a small portion of the residual income (in the form of royalties or market fees) from valuable assets can be equated to bringing a longer-term revenue stream to the studio and increasing the value of the end user . Games like Axie Infinity, F1 Delta Time and ZED Run are pushing the boundaries of these experiences, digital assets and ecosystems for users to develop. This leads us to the following problem-interoperability. Currently, game companies have no incentive to let you use assets in later iterations of the same game or in cross-ecosystem games, because they will lose potential revenue by letting players do so. However, if you can’t use your item the way you want and where you want it, this leads to some of the biggest problems in NFT, do you really own that item? If you can’t sell the item, is it really yours?
Owning your items, being able to keep them outside the game, being able to trade your items freely and use them on multiple games or platforms are all very novel concepts, but before NFTs, such a framework did not exist at all. Let’s look at the main advantages of blockchain and the main reasons Metaverses use them.
I) Immutability of assets
- Projects and assets are tokenized using ERC-721 and 1155 standards.
- Ownership, scarcity, and other information are stored in the metadata of the token.
- This helps maintain public records of transactions, supplies, activities, etc., and limits fraud/counterfeit items, as they can be verified with the original coin contract.
- Users who create or purchase items on the platform have full ownership.
- Players can choose to maintain full custody or hand over custody to the platform (depending on the capabilities of the platform), which means you are responsible for your own assets.
- By keeping users in custody of their own assets, they can remove a centralized party or middleman, which can greatly reduce costs and security risks.
- Regardless of whether the game developer still supports the game, because you have custody of your items, you can continue to use these items, or sell them as you wish.
- This provides players with the ability to use assets, avatars, and other items in multiple games and/or ecosystems.
- This can be achieved by using the same item in different games or different interpretations of the same asset on different platforms. The possibilities are endless.
IV) Publicly accessible primary and secondary markets for digital assets
- Rather than saying that a closed ecosystem only has a primary distribution market to provide income for large companies, it is better to say that developers can return the income earned to content creators.
- Users have the final decision on their assets, they can be sold, gifted, traded, etc.
- Providing secondary market infrastructure helps reduce fraud and evil activities and ensures that creators receive royalties on secondary market sales.
- Users who create value for the ecosystem will be able to obtain these benefits in monetary terms.
Why is content creation such a powerful tool?
One of the most important value-added and transformations in an enterprise’s business model is the realization that income can be derived from the content created by users on the platform. Companies can create infrastructure for content creators and capture most, if not all, of the income generated by that individual, rather than paying for participating in community events or paying for viewing content published by the company itself. We have seen a huge shift in the generation of content in society, triggered by companies such as Myspace and Facebook. But at the end of the day, very little of the revenue earned from user-generated content actually falls into the user’s pocket.
Using NFTs and cryptocurrencies, many projects aim to break this parasitic chain. Often referred to as rewards from play to earn or ecosystem rewards, Dapps and protocols have developed various unique ways to reward community/ecosystem participants. A few examples of how the protocol chooses to attract participants are: issuing currency as a reward for ecosystem participants, enabling creators to build and sell content/works as a framework for NFTs in local currency, and allowing creators to directly generate Income from content. This provides an opportunity for content creators to make a living by exchanging native currency for any preferred currency or asset without worrying that a centralized company will suddenly limit their sources of income for no reason.
What is Decentraland/Summary
“Decentraland is a decentralized virtual reality platform powered by the Ethereum blockchain. Within the Decentraland platform, users can create, experience and monetize their content and applications.” -decentraland.org/whitepaper.pdf
The platform uses NFTs to make LAND a scarce asset, which is the basis for developers to build on this basis. By creating the Decentraland SDK and tools for users to make money, users can develop their LAND and provide various forms of entertainment, including interactive experiences on traditional goods and services. The goal of Decentraland is to build an open economy, managed by the community in the form of a Decentralized Autonomous Organization (DAO), and it also controls the creator fund used to guide the development of the Decentraland meta-universe.
The Decentraland ecosystem has two core parts: land parcels, an irreplaceable asset (ERC721) and MANA (ERC20), a fungible currency used to purchase land parcels and other in-game transactions. The Decentraland project originally started in 2015 as a proof of concept using the Ethereum network. The first iteration of the proof-of-concept is called the “Decentraland Stone Age” by the team; it consists of a 2D pixel grid, with the owner and color of each plot encoded in metadata. Then, it developed into a simulation of a 3D virtual world at the end of 2016, as the team explored the option of hosting data on the chain and making each plot accessible to testers. Since this was before Ethereum, the team chose to use a modified version of the Bitcoin blockchain to host a “distributed hash table” or a similar directory. Users can look up the package they want in the hash table, and it will guide them to find the file that contains the content of the package. The user can then load files and interact and roam around the package, all of which is done in a fairly decentralized way. This proof of concept is in many ways the foundation of Decentraland today.
Fast forward a few years, and the technology stack has grown to a more sophisticated level. In today’s iteration, Decentraland is built on the Ethereum network and consists of several components to achieve the existence of the ownership and open economy we mentioned earlier. In terms of technology, the protocol consists of three layers.
1) Consensus layer: Who owns LAND and what is displayed in it?
This layer uses smart contracts to store information about unforgeable land parcels in the correct format, and then stores it in a ledger. The key indicators that are stored are: the owner, the coordinates of the plot and the content within the plot (“content description file”).
2) Land content layer/content distribution layer: Where are the files of the land parcels stored and how to access these files?
This layer communicates with the consensus layer through smart contracts and obtains content files from a decentralized database. Then, when the user passes through different lands, the file will be presented for viewing. This is very important because Decentraland does not rely on centralized servers, which means that as long as users continue to host/create content and pay for the decentralized servers, the world can continue to exist. In Decentraland’s words, it “provides [them] with strong censorship resistance, eliminating the power of central authorities to change rules or prevent users from participating.”
3) Real-time layer: How do users interact, communicate and perform tasks in the same virtual environment?
Since there is no centralized server to host the world that players can interact with, players must do it themselves in a peer-to-peer manner. The initial guidance meant that the supporters of the project had to host the servers themselves and figure out ways to coordinate in the community to curb bad actors, but now the DAO can review the hosts to ensure that reputable members in the community host the servers. Essentially, this layer is where all players integrate other users, voice and text communications, and interact with the environment on a global scale, making it an important part of the “metaspace” experience. Although the other two layers ensure the ownership, tracking and rendering of the environment, the real-time layer is where the players of Decentraland are connected in the same space.
What makes Decentraland different?
The foundation of DAO/creator
One of the reasons that make Decentraland the number one mover is that they are very fast at establishing and implementing technology in the blockchain field. Decentraland not only built and implemented the DAO to manage the protocol, at the time of writing, the protocol itself is also completely decentralized. So what exactly is Decentraland DAO?
DAO is represented by the community and also owns the main smart contracts and assets that manage and control Decentraland. In addition, DAO also controls a large number of MANAs for community activities and other operational tasks to keep Metaverse running. The community can propose and vote on policy updates and various other projects, such as partnerships and NFT projects, through the DAO portal supported by the Aragon Agreement to allow them to be carried out in Metaverse. DAO is supported by the Security Advisory Board (SAB) to solve the technical defects of smart contracts and the contracts required for upgrades. The committee consists of 5 members appointed by the Decentraland team and the community.
The following is an estimated annual inflation (at the time of the public sale of MANA) based on the release of foundation funds to creators to promote growth, all of which will be changed based on DAO’s recommendations and amendments.
SDK and game builder
Decentraland provides a drag-and-drop game builder, users can use a series of projects to build an experience, and a command line SDK, allowing developers to have more control over the generated environment.
Tokenomics and scarcity
MANA use cases:
The initial use was to purchase land in primary land sales. Burn 1000 MANA -> 1LAND
Buy LAND on the secondary market
Purchase goods in the game (wearables, name, NFT, etc.).
Payment of service fees (such as land development or entertainment).
MANA is also reserved as a “creator fund” to incentivize content creators to continue to build and contribute to the community.
Holding MANA tokens can participate in the management of Decentraland’s Decentralized Autonomous Organization (DAO).
Maximum supply of LAND: 90,000 LAND
What is Sandbox?
Sandbox is a unique Metaverse designed to create a sustainable game and content creation ecosystem. Using the 3D Voxel style shown in popular games such as Roblox and Minecraft, the sandbox aims to provide tools that not only build experiences related to specific locations, but also provide assets that can be used and sold throughout the ecosystem. One of the key points of the platform is to enable creators in a decentralized way, that is, along with their LAND NFT and ERC20 SAND tokens, they adopt the ERC1155 standard (we will explore in more depth later) to create assets . ASSETS is the second type of NFT in the Sandbox ecosystem; the team uses this unique NFT standard to solve the problem of content creators not receiving their direct revenue share. Rather than pouring hours and energy into the game to find indirect benefits, the Sandbox team provides a framework for creating these assets, as well as a market that directly provides currency to consumers.
The ecosystem consists of three core parts, revolving around the belief in composability between game/metro and reward content creators.
Voxel Editor (“VoxEdit”)-as described by Sandbox, “This easy-to-use but powerful free 3D voxel modeling package allows users to create and animate 3D objects such as people, animals, leaves and tools, and add They are exported to the Sandbox market and become game assets.
Market-is a web-based market that allows users to publish their works in ERC 721 and 1155 formats, and sell/trade the ASSETS they created with VoxEditor.
Games/Metaverse-This part of the ecosystem is the meeting point for everything. Using assets created in VoxEdit or purchased on the open market, users can build their own experience and games in the land parcels. The “assets” of each plot can be filled with complex game mechanisms through the game editor to create more static visual experience. These plots and the unique gaming experience created in them together form the Sandbox Metaverse.
Sandbox was originally a mobile game developed by its parent company Animoca Brands on Android and iOS in 2012. This app is widely used and accumulated 40 million downloads in the early days of mobile games, reaching nearly 2.6 million monthly active users at the peak. In 2015, Sandbox games were available for download on the PC through the popular gaming platform Steam. Users created 70 million unique worlds and environments for other users to interact with. This early user-generated content experience led Animoca Brands to leap into blockchain gaming in 2019 and bring their flagship product “Sandbox” to the market.
With lofty innovative steps, the team stated that their mission is to “build a system that allows creators to produce, play, share, and trade without central control, enjoy secure copyright rights, and earn SAND “. Although there is already a huge market for free-form games based on Voxel, the team believes that by building a sandbox ecosystem with blockchain technology and incorporating NFTs, they can solve many problems that currently plague the gaming industry, such as:
Sandbox white paper
What is the ERC-1155 token standard?
Similar to the ERC-20 and ERC-721 token standards we discussed earlier, the 1155 standard can be used to create replaceable, irreplaceable and even semi-replaceable tokens. In order to understand why the 1155 standard was created, let us first look at the limitations of the existing two standards on user and professional-generated content.
For ERC-20 tokens, they cannot be uniquely identified, and a new contract needs to be issued for each type of ERC-20 token. When each project needs to be completely unique and each minted token is different from the other tokens in the collection, it is important to use ERC-721 token, but if there are duplicate NFTs in the collection as part of the contract, then It will be expensive and troublesome. In this case, we will seek to use the ERC-1155 token standard, which will allow us to create multiple tokens from a single contract, each with specified metadata, supply, and other details.
For example, if we use ERC-721 contract to mint Pokemon cards, we will need to create a new contract for each card type to take into account different rarity and supply, etc. This will incur huge costs because deploying each The gas fee for contract and minting each card will be a unique token. In addition, using the ERC-1155 contract to perform the same task is much easier and much cheaper. Using the feature of semi-homogenization, we can create multiple card types as separate token IDs, not only specifying the source data, but also specifying the supply of each card in the same contract.
Extension of Layer 2
The details have not yet been fully announced, but on June 28, 2021, the Sandbox team stated that they will work with Polygon (Matic)’s layer 2 scaling solution and hope to implement it in the future to cope with the limitations and high costs of the Ethereum main chain .
VoxEdit & Game Builder
The sandbox VoxEdit is a very powerful tool that allows users and developers to build environments and assets in great detail. The picture below is a game generator, which allows users to build on LAND and add advanced game mechanics to the experience they create.
Partnership and main IP
Sandbox’s collaboration with real-world and cryptocurrency-native IPs and brands is second to none. At the time of writing this report, the team has more than 50 IP partnerships, highlighting some of the main family names below. The parent company Animoca Brands is well-known for its portfolio, including names such as Binance, Flow, Dapper Labs, Atari and Polygon. In addition to an impressive portfolio, Animoca not only owns a large amount of real-world intellectual property rights and invests in some of the largest infrastructures in the NFT field, but is also responsible for some of the largest blockchain games to date, such as F1 Delta Time.
Tokenomics and scarcity
SAND use cases:
-Users/players use SAND tokens to purchase assets and land in the game.
-Artists/creators use SAND to upload assets to the market and purchase “crystals” to define the rarity of assets.
-Players can hold SAND to participate in management/DAO.
-SAND can be used to buy shares and obtain passive income paid by SANDB, catalysts and gems. The latter two are used to create assets.
-Lay a foundation for stimulating the continuous growth of the Sandbox ecosystem and high-quality content creation.
***Charging model = 5% of the transaction fee will be evenly distributed to the foundation and betting rewards. Use SAND to purchase any items in the ecosystem.
Largest land offered through primary sales: 166,646 plots
We can see that the price and transaction volume of MANA and SAND are closely related to the early price and transaction volume of MANA. However, the recent surge in SAND’s trading volume has also narrowed the price gap between MANA and itself.
From the sentiment data and the average number of tweets in the previous three months, we can see that MANA has maintained a very stable number of tweets in the community. Although the average number of tweets declined from May to June, SAND also stagnated during the same period, and only recently did we really see an increase in mentions. The emotions surrounding these projects have remained highly stable and highly correlated with each other.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/metaverse-boom-decentraland-and-sandbox-in-depth/
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