The metaverse is an expansive digital universe that encompasses virtual reality, internet connectivity, and networking infrastructure. This includes everything from social media platforms to video games and virtual reality spaces that enable millions of online communities to coalesce and expand at a rapid pace.
Blockchain technologies’ role in influencing the direction of the metaverse over the coming years cannot be understated. The emergence of decentralized networks built on transparent and tamper-proof protocols have enabled the creation and proliferation of digitally scarce assets such as cryptocurrencies, NFTs, virtual lands, and more.
As evidenced by the rise of DeFi, NFT marketplaces, and play-to-earn games, these digital assets are quickly beginning to take hold as the main form of value exchange between participants online.
Blockchain technology will soon transform the metaverse from a social playground for connecting with friends to an economic system where the factors of production (land, labor, capital, entrepreneurship) are able to manifest digitally and in a form that is more transparent and trustless than ever before.
Corporates Adopting the Metaverse
In the past year, we have seen the largest corporations in the world make huge investments in the metaverse, hoping to carve out their territory in this emerging new space.
Facebook kicked off a series of corporate announcements when it revealed that it would be changing its name to ‘Meta’ and was investing $10 billion in building its metaverse.
Since then we have seen other announcements, such as Warner Music Group’s plans to build a concert-focused theme park in the Metaverse and even major banks like HSBC and JPMorgan acquiring virtual real estate in platforms like Decentraland and the Sandbox.
There are several immediate and long-term benefits to corporates joining the metaverse. Some of these include:
- Unrestricted advertising space to display content and increase brand awareness amongst a younger generation of consumers (particularly Gen Z).
- Embedding digital services into rapidly growing online communities to benefit from network effects.
- For banks, the expansion of financial services to individuals and entities in the metaverse (loans, custody, liquidity provisioning, insurance, etc).
- Reimagining the customer/fan experience by providing new perks and benefits that can only be applied to the metaverse (e.g redeeming loyalty points for NFTs or in-game assets, creating live concerts or other types of events where fans can interact directly with their favorite artists or celebrity).
- Streamlining business costs by replacing physical infrastructures with virtual ones (events, consultations and sales can all be done virtually without the need to pay for any physical space and minimal equipment)
- Tokenizing digital or physical company assets to deploy towards financial services within the metaverse, including lending out for income, using tokenized assets as collateral for loans, fractionalizing assets to raise public funding.
What underpins all these benefits is the need for a robust digital identity system to enable anyone to verify an individual or entity based on 3 focus areas:
- What do they own (assets)
- What have they done (transaction history)
- Are they a high value user and can I trust them (reputation)
Decentralized identity enables the consolidation of multiple wallet addresses that a user might hold into one self-custodied identity that tracks assets and transaction history in order to calculate the user’s reputation score.
Reputation can be used to evaluate whether a person is eligible to receive uncollateralized or under collateralized loans or earn rewards based on the accumulated use of a protocol or Dapp.
Even more critical than loans and loyalty rewards, digital identities can provide individuals and businesses with a clear and transparent solution for filing taxes to government entities that could also represent themselves within the metaverse through their digital identity.
The challenge with integrating a decentralized identity system in the metaverse is that the current metaverse is highly fragmented across different blockchains and centralized networks with nascent interoperability solutions.
This has many downstream effects such as the inability to migrate your data (followers, assets, reputation, etc) across different networks, poor access to liquidity when transacting on certain Dapps, which ultimately hinders application scalability and market efficiency, and lastly, more opportunities for bad actors to obfuscate their transaction activities which can increase incidents of fraud.
ADIs Enhancing The Value of The Metaverse
Accumulate attempts to be the first universally recognized identity layer for the entire Web3 space. It aims to achieve this by serving as an aggregator for disparate blockchains and decentralized marketplaces using Accumulate Digital Identifiers (ADIs) as the shared framework for communication, data auditing, and reconciliation.
Accumulate Digital Identifiers (ADIs) are human-readable addresses similar to website URLs that are chosen by individuals or assigned by organizations to represent their presence on the blockchain.
ADIs can enhance the value of the metaverse in the following ways:
Consolidate Current Blockchain Domain Name Holders
As mentioned in a previous article, Accumulate can partner with popular digital identity providers such as ENS, Solana Name Service, Civic, and others in order to consolidate these services under one universal identity layer that can most accurately represent the Web3 space in its entirety.
Accumulate can create solutions to allow for the cross-chain transfer of digital IDs, meaning each uniquely formed identity on Solana, Self-key or any other identity service could be given an ADI wrapper that would enable it to function as a unique ADI within the Accumulate Network. This would enable a seamless onboarding experience for the 300k+ crypto native users who own a domain name across multiple networks.
Consolidate Land Ownership Across Different Virtual Worlds
Once Accumulate can begin consolidating domain name holders, the natural next step is to develop tools to pair these users together based on the other assets that they have stored in their wallets. This can include creating protocols for domain name holders who own specific types of NFTs (e.g virtual lands) to communicate with each other and engage in cross-chain transactions of lands on the Accumulate network.
Create On Demand Liquidity for Any Type of NFT
The aggregation of various DeFi and NFT marketplaces under a single ADI-enabled communication layer creates an opportunity for liquidity to be more easily injected into the system in order to provide buyers and sellers with the best prices to enter and exit their positions within the metaverse.
Large financial institutions such as banks or hedge funds can leverage the Accumulate network to put significant amounts of capital to work that can be used to provide liquidity and facilitate market-making amongst consolidated NFT, cryptocurrency, and gaming assets from various blockchains.
These financial entities could register as ADIs and assume the role of market makers, offering to buy bundles of multi-chain NFT assets at a favorable discount from their average floor price, which they then could turn around to sell to other entities on Accumulate for a marginal profit.
We believe the metaverse will one day become a critical extension of the real-world economy, before eventually taking over as the epicenter of our global economic system.
In order to make this transition viable, we need to envision a world where companies, governments, schools, and other institutions can seamlessly migrate onto the blockchain and carry out their normal business functions within the digital realm in a way that is more transparent and trustless.
In order to make this possible, Accumulate wants to establish a digital identity system that can house everything from a user’s gaming profile to their medical records, employment history, net worth, and footprint throughout various virtual spaces.
Ultimately, Accumulate aims to leverage its cutting-edge identity solution, in addition to technologies provided by recent integrations to transform the metaverse from a virtual playground into a true virtual economy.