Is Your Metaverse Built on Foundations of Sand?
The metaverse is the latest hot topic. A buzzword for investors, and a profit for speculators who got ahead of the news that Facebook will rebrand to Meta.
Peak interest in the metaverse came the day after Facebook’s rebrand announcement, and – without confirmation that Facebook will do anything related to crypto at all – metaverse tokens hit new all-time-high the day after:
SAND and MANA, shown above, are the in-world currencies for Sandbox and Decentraland respectively, and they’re used to buy NFTs.
In metaverses, NFTs are in-world items – swords, potions, characters, land and homes. The utility of the items takes NFTs beyond 2D avatars and proof of art ownership.
Since these items are connected to a global chain used by other metaverses, it’s possible that items, guilds or characters native to one world – or even relics from the pre-metaverse days – could be ported into another realm.
The ephemeral metaverse?
However, when we looked at NFTs on offer by the early few metaverses that have released NFTs, we found that the trend leaned towards closed systems and centralization, not the utopian vision of guaranteed ownership and permanence that crypto makes possible.
Decentraland stores assets and metadata on their centralized servers –
peer.decentraland.org. This gives their metaverse a single point of failure, and makes users trust Decentraland infrastructure. In a possible future where Decentraland didn’t exist, users wouldn’t be able to take their NFTs with them since the attributes or graphics don’t exist without the server.
Sandbox’s metadata for land, which specifies where on the map the land can be found, but both the metadata and graphics are, again, stored on a centralized server.
According to Gemini, Sandbox’s user-generated content listed on the marketplace is required to use IPFS. NFT rating tool Check My NFT rates IPFS as medium security, citing that while it is decentralized, it lacks incentives for nodes, and if someone stops paying the subscription, the asset is lost.
If we say these assets are vulnerable, the exact same can be said about the metaverses too. These are applications being served via Amazon Web Services and Cloudflare – another point of failure, an alternative to which could be deploying the code to Arweave.
Focusing back on the in-game items (NFTs) themselves, how much less would they be worth if the record of you owning them could just end up lost in the ether? We know that with Ethereum as the ownership ledger layer, that part is going to be permanently etched into the blockchain.
But even if the ownership part is permanent, if the object doesn’t exist and its data can’t be loaded into the metaverse, what do you actually own?