After the Time of Troubles: Today’s Metaverse and the Dream of Digital Ownership
In 2023 I gave a talk on the TED mainstage about the opportunity of Web3, the true meaning of the open metaverse, and why digital property rights are fundamentally important (watch: The dream of digital ownership, powered by the metaverse, TED Talks, 2023). Not too long after that, Web3 and crypto began to suffer some serious setbacks, putting my talk in a somewhat awkward position. As we enter 2025, I’d like to review how some of the open metaverse metrics I discussed back then have evolved in the time since I gave that talk.
2023 was a tumultuous year for Web3, with unprecedented confusion, uncertainty, and the removal of major names, such as TerraUSD, Luna, and FTX, that had up to that point been regarded as deities in the industry. A time of troubles. Much of 2024 was similarly concerning: as late as the past summer, lingering uncertainty affected the Web3 market both economically and politically.
Fortunately, the situation has improved substantially; after weathering a recession, difficult macroeconomic conditions, a crypto winter, major scandals and collapses, and significant political certainty around its future, the Web3 industry emerged from its time of troubles not only stronger and more focused, but also able, for the first time, to attract significant institutional support for digital assets from the likes of Blackrock, VanEck, and others.
What IS the open metaverse?
As I explained in my TED talk, at Animoca Brands we do not subscribe to traditional ideas of the metaverse such as an immersive 3D virtual reality construct with sensory stimulation. Not because these technologies aren’t interesting (they are!) but because we don’t believe that the access interfaces to the metaverse should be confused with the metaverse itself.
We define the open metaverse as the collected decentralized experiences that grant their participants and holders the property rights that are generally unavailable in previous versions of the Internet. The innovation that underlies the open metaverse is digital ownership, and digital ownership is made possible by Web3 and blockchain technologies.
If you hold fungible or non-fungible tokens, then you are already participating in (and own a piece of) the open metaverse — a thriving universe of active capitalist economies composed of virtual worlds, experiences, businesses, and millions of people.
Return of the new economic opportunities
In my talk in 2023 I spoke about how Web3 enables people to take advantage of exciting and unorthodox new economic opportunities such as play-and-earn in online games. Prior to 2023, the concept of ownership-based earning in blockchain games had attained great popularity and exposure in the public sphere around 2021, with the venerable game Axie Infinity leading the charge. But then came the time of troubles.
The idea that people could earn a living by playing video games began to sound far-fetched during the crypto winter that set in over the course of 2023, especially if your exposure to the crypto sphere consisted of news coverage about collapses, scandals, and price drops. But the new economic opportunities I mentioned in my TED Talk remained evident even throughout the time of troubles. This was easier to observe in less affluent markets — for example, a March 2024 New York Times article on play-and-earn in the Philippines noted that in the midst of the downturn:
“The games reward players with cryptocurrency tokens for completing small, daily challenges. Often, players convert their tokens to pesos, the country’s currency, earning around twice the Philippines’ minimum wage of $11 a day.”
And:
“New billboards for crypto companies have now popped up around Manila. People have started harvesting virtual crops from a crypto farming game called Pixels as a fresh source of income. Overseas Filipino workers, known as O.F.W.s, are also returning to the country to earn crypto as M.F.W.s, or metaverse Filipino workers.”
Sky Mavis and Ronin (both of which received investments from Animoca Brands) have been the subject of similar articles (examples here and here). Although down from its vertiginous peak in 2021, Axie Infinity remains the undisputed leader in all-time NFT sales volume, which currently stands at nearly US$4.3 billion (NFTs are part of the play and earn mechanisms in Axie Infinity).
DAO treasuries have grown impressively
One of the points I highlighted in my TED Talk was the total value of decentralized autonomous organization (DAO) treasuries, which are the pools of community-owned funds held and managed by DAOs to finance their projects and goals. At the beginning of 2023, DAO treasuries represented the equivalent of around US$12 billion in value, and then trended generally upward in seeming defiance of the time of troubles.
At the time of writing, the total treasury value of DAOs is around US$32 billion. It is particularly noteworthy that this (combined) treasury is greater than the value of many global companies, and is governed by just 11.4 million holders of governance tokens.
Fungible tokens: currencies of the metaverse
Another point I made was that the aggregate economic activity of the open metaverse can be thought of as the economy of a new country — an online virtual nation with its own culture, systems, citizens, and markets.
In the open metaverse, fungible tokens serve as the store of value and medium of exchange that keep the economy growing. Although the sum total of cryptocurrency and other fungible tokens exclude NFTs and equity-based market capitalizations, we can use cryptocurrencies as a back-of-the-envelope indicator for the economic activity of the open metaverse (the Internet of ownership).
When I spoke at TED in 2023, the total market value of the circulating supply of all cryptocurrencies was around US$1.1 trillion; as of 14 January 2025, that number stands at around US$3.3 trillion with a 24-hour trade volume of around US$152 billion.
To illustrate the significance of this (still young) metaverse economy, we can draw a rough comparison with a traditional financial market in a highly modern economy.
Animoca Brands is headquartered in Hong Kong. The Hong Kong Stock Exchange is one of the world’s major financial hubs and one of the world’s largest exchanges by activity, market cap, and liquidity, with a mean average trade value of around US$18.2 billion per trading day for the month of December 2024 (data from HKEX-Market Data). The total market cap of the HKEX was around US$4.5 trillion at the end of December 2024 (data from HKEX-Market Data).
The currencies of the open metaverse at the time of writing have a daily trade volume well over eight times higher than the average daily trade value of the Hong Kong Stock Exchange for December 2024, despite having only around 70% of its total market capitalization and a small fraction of its history.
NFTs: culture in the metaverse
If cryptocurrencies are the money of the metaverse, then NFTs are the property and culture of this new world. NFTs can represent anything unique in the metaverse: identity such as digital identifiers (DIDs), avatars, personal profile pics (PFPs) or personal records of any kind; virtual real estate; artwork; collectibles; game or world assets; music; domain names; and so on.
As with the rest of the open metaverse, the common denominator of NFTs is digital property rights: by owning an NFT you genuinely own what is stipulated in the NFT’s smart contract, whether it is an image, a game item, commercial rights to an asset, or any number of other things. This ownership represents an important paradigm shift for the online world, where goods and services have traditionally been provided on a licensing basis rather than via outright ownership.
Although it may sometimes feel like we’ve been hearing about them forever, it’s important to remember that NFTs are a comparatively recent development. The first NFT was created around ten years ago, but this technology only began to gain popular awareness starting in late November 2017, after the ERC-721 standard was introduced on Ethereum.
Effectively, we are only about seven years into the era of true digital ownership of virtual items.
Let’s view this in the context of another major paradigm shift. Apple began selling the iPhone In June 2007, forever changing the world of personal communication and computing. Smartphones existed before the iPhone, but it was this product that marked the turning point for the entire tech industry and beyond (Android, which was purchased by Google, later brought the smartphone fully into the mainstream via a huge range of popular, varied, and usually affordable devices).
Apple distributes content and software for iOS devices entirely through its App Store closed ecosystem, for which it provides sales data in its financial reports. Making it relatively easy to make a (rough) comparison. Furthermore, iPhones are considered luxury items and even status symbols, which is relevant in the context of popular perceptions about pricey NFTs (in fact, most NFTs are not actually that expensive — at time of writing the 30-day average sale price is US$157).
In 2013, roughly six and a half years after the iPhone first went on sale, Apple generated about US$10 billion in sales on the App Store, with over US$1 billion recorded for the month of December.
In 2024, about seven years after NFT technology began entering the mainstream, NFT sales volume for the year was around US$8.9 billion, with NFT sales of around US$892 million for the month of December.
The value of true digital ownership
NFTs strongly favour creators and owners, allowing them (rather than platforms) to be the primary beneficiaries of their work. This is true for initial sales as well as in perpetuity, thanks to the continuing creator fees/royalties provided by NFTs.
All creators who sell their work as NFTs receive nearly all of the proceeds from the sale, minus a marketplace platform commission fee (usually 2.5%) and any gas fees. Additionally, the creator of an NFT is entitled to receive royalty or creator fees every time their NFT is sold.
Beyond the digital ownership benefits of NFTs, the end users of a Web3 network (typically meaning holders of a network’s fungible tokens) also receive rewards for contributing value to their networks: in 2024, these users received the equivalent of US$14.91 billion in the form of airdrops.
Source: DropsTab.com
This is all in stark contrast to how dominant and well-established Web2 platforms reward creators, contributors, and end users. For example, in its latest available Loud and Clear report, music streaming titan Spotify revealed that it paid over US$9 billion to artists in 2023, with 1,250 artists receiving at least US$1 million, 11,600 artists receiving at least US$100,000, and 66,000 artists receiving at least US$10,000.
This means that up to 78,850 artists received a meaningful yearly sum (US$10,000 or higher) for streaming their work on Spotify in 2023. Around that time Spotify was estimated to have around 11 million artists and creators, which suggests that only around 0.7% of them generated a meaningful income through the platform — and of course end users (listeners) of Spotify received no payments at all.
Given this disparity in how a traditional IP industry such as music and the rather more novel Web3 industry reward their creators, it’s not surprising that the popular musician Grimes revealed that she made more money from NFTs than her entire music career.
AI and the metaverse
One of the topics I touched upon during my TED Talk is how blockchain technology will better safeguard intellectual property rights in the rising age of AI, because (as I have noted on other occasions) AI and blockchain are firmly intertwined. As AI agents become more autonomous, they will rely increasingly on blockchain for verification and on crypto as the medium of exchange. This effect was observable for the second half of 2024 and I believe that it will be a significant growth driver for the open metaverse in the coming years.
The dream of the metaverse
Despite enduring a series of disasters in 2023 and then languishing in a long downturn, the open metaverse is still here, still growing, and in good shape.
At Animoca Brands, our exposure to and involvement with the Web3 industry afford us a fairly advantageous view of the landscape of this new world, and what we have been seeing over the past year and a half is certainly encouraging. Web3 companies worked hard on building during the downturn and are now well positioned for growth. As we reported at the close of 2024, Animoca Brands’ own recent investor update indicated a strong financial position.
Across the Web3 market there are abundant examples of successful launches and innovations; just within our company group and portfolio, I note Pixels, Xai, The Sandbox, Anichess, and Pudgy Penguins (PENGU token) in gaming, Open Campus and the EDU Foundation in education and edtech, and Mocaverse and the Moca Network for the broader ecosystem.
I expect 2025 to be a year of pivotal growth for Web3 and the open metaverse, with an acceleration in the paradigm shift toward property rights for our online lives. The growth of the open metaverse since I gave my TED Talk over one and a half years ago has been impressive, despite the intervening time of troubles.
Once merely a dream, digital ownership today is steadily becoming a reality.
NOTE: A shorter version was originally published by Cointelegraph on 13 January 2025.
