Defining the Metaverse, examining Web 3.0, and a case study of bringing innovative NFT tech to market

There’s a new guard of agencies, publishers, and brands claiming they understand and represent Web 3.0 and Metaverse. Although headline grabbing, the Metaverse and Web 3.0 persist as vaguely defined, corporate buzzwords of the day. Corporate jargon is our least favorite thing. 

Over the past couple months, we’ve been fortunate to help build and launch a utility NFT project Satoshi’s Index. As part of that launch, we dove head first into the technological forefront promising to recreate the internet and reality as we know it. That campaign gave us the experience to demystify Web 3.0 and make Metaverse just a little less Meta. 

What is the Metaverse? Explaining the origins of the Metaverse to today. Examples of Metaverses.

The Metaverse and Web 3.0 have become shorthand in today’s lexicon to describe futurism. In the fast-moving news cycle, embracing the two terms has become a popular way for companies to demonstrate to the press, investors, and shareholders that they are innovative. Ironically, a Metaverse is not new, nor is there a single Metaverse to rule them all. 

The first origin of the word appeared in science fiction writer Neal Stephenson’s novel Snow Crash, published in 1992. It combines two words. The prefix ‘Meta’ means existing beyond something, a specialized form of something, to transform or transcend. Verse is an abbreviated version of universe, meaning a body of things, systems or phenomena observed or experienced. Taken together, we can form a simple, comprehensive definition for a Metaverse: an interactive system that exists beyond our physical world. 

Using this definition, we can determine that a ‘Metaverse’ can be applied to any number of virtual networks that enable social or commercial interactions from independent parties. In fact, metaverses have existed for a while in a number of forms. 

In 2009, Riot Games launched League of Legends (LoL), a free-to-play multi-player online battle arena game (MOBA) in which two teams of 5 players square off to destroy each other’s base. The innovation set the stage for the ‘freemium’ model of gaming, in which the game was free to play but players paid for cosmetic or in-game bonuses.  

The game boasts over 100 million monthly active players, generating about $1.75 billion in annual revenue mostly from in-game purchases in 2020. These purchases include badges, skins (character costumes), cosmetic map changes, and even in-game training from other players. A virtual marketplace and battle arena. A metaverse cerca 2009. 

Roblox has become the new golden metaverse child, racking up 220 million active monthly players. Unlike League of Legends, Roblox isn’t one game.  It’s an open-source game building platform, in which the players both create and play each other’s games. Roblox takes a percentage of in-game currency that players donate and use in designed experiences. In a similar way YouTube created a platform for people to upload and share video, Roblox doesn’t actually make any of the games. It simply provides a platform for user-generated-content and a network for people to connect. Another modern Metaverse. 

Facebook’s rebranding to Meta is apt if not unsavory. People spending significant time on Facebook, Instagram, and Oculus do occupy a Metaverse in which their peers and themselves craft carefully curated digital personas. These personas are similar but distinct from their real selves. The disconnect from purposely crafted feeds compared to actual life can be jarring. Participants, especially teens, are also more likely to be depressed the more they use it. For example, physical me loves getting high and eating snacks in bed while watching documentaries. Instagram me @producerwes loves to surf, travel, hang on the beach, and party with attractive women. A very meta Metaverse indeed. 

Metaverses are not new. However, the increasing adoption of virtual experiences have brought these created realities, whether they be a video games, community platforms, or social networks, into the mainstream. Innovative executions of Metaverse building will continue to flourish in the coming years, attracting millions of participants and generating large fortunes for investors savvy enough to pick the winners.  

What is Web 3.0? A Brief History of the Web. How We Brought the NFT project Satoshi’s Index to Market. 

The term Web 3.0 derives from what technological historians view as the three stages of the internet. Web 1.0 existed in the early 1990s and 2000s. Web 1.0 marked the creation of hordes websites promising revolutions to all manner of problems and ended with the dotcom bubble of 2001. Despite the bubble bursting, Web 1.0 invented the language for coding on the web (HTML), HTTP, URLs, and GIFs. 

Web 2.0 is our current internet age with social networks, interactive pages, mobile applications, increasing interactivity, and most notably dominant companies like Apple, Amazon, Google, and Meta that control how we access the web. Web 2.0 invented the ‘gig’ economy that moved much of the economy online where we shop and interact. 

Web 3.0 promises to be the next iteration of the internet, built on the principles of decentralization, openness, and greater personal ownership of digital assets. Blockchain technology represents a new type of protocol (sets of computer rules) that distributes data across a network of individual machines rather than storing them on a centralized set of machines. This decentralized innovation is the fundamental catalyst that underpins the Web 3.0 revolution. The Cryptocurrencies and NFTs (non-fungible token) you see in the news all live on top and utilize these new blockchain protocols to function. 

This new internet promises to spawn the next era of the digital age and mint dozens of new wealthy entrepreneurs. However, with any new, unproven technology launch, a rigorous market sizing analysis is required. When we were brought on to launch our first NFT campaign for Satoshi’s Index, that’s exactly what we did. 

Satoshi’s Index is an NFT product that lives on the Ethereum blockchain. It was designed as an index fund for crypto currencies that community members access via the purchase of an NFT. The NFT in this case acts as an SAAS access key to unluck functionality. Unlike art NFTs, the ambition to create real consumer investing utility, coupled with a new NFT tech application as a product key excited us. It remains the first NFT project providing users crypto investment automation by investing in an index. 

Despite the buzz Web 3.0 is getting in the press, consumer participation remains relatively low compared with various forms of Metaverses we described above. Generally, we found the NFT market narrow and oversupplied. 

According to data from OpenSea, 3 billion NFTs went on sale in December of last year with a total addressable marketing of 29 million NFT wallet owners. Since consumers must have a digital wallet to purchase an NFT, wallet owners provide a reliable proxy to market size for an NFT project. Furthermore, 10% or approximately 3 million wallets accounted for 85% of those purchases. The math broadly comes out to every unique wallet holder needing to buy 1000 NFTs a month to meet supply. 

The gross oversupply indicates that pureplay art and collector projects will emerge as a massive bubble. Resale value on secondary markets proves soft. The first tweet from Jack Dorsey initially sold for $2.9 million in March of 2021. The owner listed the NFT on Opensea last week… the top bid was $280. Art NFTs, except for perhaps well-known projects like BAYC, Cryptopunks or Beeple, will go to 0 on mass. If a Web 1.0 bubble is floating to the top of your mind, trust your instincts. 

Whenever a product faces a crowded market, a narrow audience target and clear unique selling proposition are required. We defined the target audience of Satoshi’s Index as current crypto investors or Web 3.0 curious individuals. This audience group indexed heavily on the social platforms Twitter and Discord, read a number of crypto-first investing publications like Cointelegraph, Bitcoinist, and Cryptoslate, and followed several notable investors and crypto thought leaders. 

Our unique selling proposition (USP) was a short description of our brand promise: The first utility NFT offering Crypto investment automation. Combined with targeted paid media, we varied creative, press, and influencer outreach across the platforms listed, leading with our USP. 

Due to the higher price point of our NFT, .125 ETH or around $500, we opted to direct all our marketing efforts into our Discord. This Discord formed our community base where NFT holders and new entrants could discuss our product, roadmap, and crypto investing. Our theory was would-be buyers would want to test-drive our product and community before purchasing. 

In a funny twist, our Discord community for Satoshi’s Index became a type of Metaverse. Although we’ve sold several hundred NFTs to date, the actual place where our community interacts does not exist on any blockchain, but on a Discord channel that represents the project’s memberships. 

In creating our NFT campaign, we coincidently created a mini-Metaverse, a virtual manifestation of our community. Satoshi’s Disciples as we like to call them represent over 1200 crypto-investing enthusiasts from all parts of the world. The community hosts meme and social contests, shares tips and advice on investing, and lends support to individual members.

Whether it be experiences, systems, games or markets that live beyond the physical plain, a Metaverse offers companies the opportunity to own space, even if that space is invented out of thin air. Web 3.0 promises a litany of new technological innovations but remains a smaller market of coders and tech enthusiasts. 

Ultimately, the value derived from a Metaverse and Web 3.0 will be the time, attention, and networks of the participants this new generation of innovators create. The technological creations will be profound, even if a bubble emerges in the short term. What those lasting innovations will be are anyone’s guess.