Facebook’s centralized meta-universe poses a threat to the decentralized ecosystem?
Facebook has been planning to enter the meta-universe for some time-maybe even a few years. But it was only recently that its ambitious expansion plan made this concept a mainstream global headline news. Rename Meta’s parent company may be the biggest and boldest statement of intent the company can make. Suddenly, major news media are flooded with explanatory articles, and financial websites are full of excitement about investment opportunities in this emerging industry.
However, in the field of encryption, it is understandable that the response has been more moderate. After all, the decentralized version of Metaverse has been developed around these parts for several years. To make matters worse, the arrogant attitude of technology giants towards user privacy and data collection has embodied many of the most precious principles in the blockchain and encryption fields.
Nonetheless, Metaverse tokens such as Decentraland (MANA) and Sandbox (SAND) have received a broad rebound with the support of the news, and within a few days after Facebook announced the decentralized Metaverse project Sandbox gets $93 million Funds from investors including SoftBank.
But now that the dust has settled, does the company’s plan, formerly known as Facebook, represent good news for non-fungible tokens (NFT) and Meta Festival projects in the crypto sector? Or is it possible for Meta to put this industry in its infancy into trouble?
What is known so far?
Facebook has yet to announce the expected details of its Metaverse version. The promotional video featuring the company’s co-founder and CEO Mark Zuckerberg himself and his Metaverse avatar looks very shiny. Even so, there is still very little information about how things actually work behind the scenes. However, based on precedents and known circumstances, some distinctions can be made between what Facebook may be planning and established decentralized metaverse projects.
When it comes to whether it will adopt a decentralized infrastructure based on its efforts to launch cryptocurrency, Facebook has some form. Diem, formerly Libra Currency operated by a licensed network Centralized company. The head of Diem, David Marcus, also confirmed that the project and Facebook are also considering integrating NFT with Diem-compatible wallet Novi.
Based on all of these, it is fair to say that Facebook Metaverse will have an economy centered on the Diem currency and issue NFT-based assets on the licensed Diem network.
Announce @Meta — The new name of the Facebook company. Meta is helping to build Metaverse, a place where we will play and connect in 3D. Welcome to the next chapter of social connections. pic.twitter.com/ywSJPLsCoD
-Yuan (@Meta) October 28, 2021
The biggest difference between Facebook’s metaverse and crypto’s metaverse project is that the latter runs on an open, permissionless blockchain architecture. Any developer can build Metaverse applications on the open blockchain, and any user can obtain their own virtual real estate and participate in virtual assets.
Crucially, one of the greatest benefits of a decentralized and open architecture is that users can join and move between different meta-universes without barriers. The interoperability protocol reduces the friction between blockchains, allowing assets, including cryptocurrencies, stablecoins, utility tokens, NFTs, loyalty points, or anything else, to be transferred across chains.
Therefore, the most critical question regarding Facebook’s plan is to what extent the company plans to make its Metaverse interoperable and to what extent Metaverse’s assets are interchangeable with other non-Facebook issued assets.
From the perspective of a decentralized meta-universe, this does not necessarily sound like good news. After all, Meta’s global user base dwarfs cryptocurrencies. However, Robbie Ferguson, co-founder of Immutable, NFT’s second-tier platform, said that there is another way to look at it:
“even though [Meta] The decision to pursue a closed ecosystem is still the basic core recognition of the value provided by digital ownership—and the fact that the most valuable battlefield in the future will be who owns the infrastructure of the digital universe. “
Centralization may be the biggest limiting factor
Based on the fact that Diem is already a closed system, it seems that the Facebook metaverse will also be a closed ecosystem, not necessarily allowing direct or easy interaction with the decentralized metaverse. This “walled garden” approach is suitable for the company’s monopolistic tendencies, but it will limit growth or the potential for NFTs issued by Facebook to obtain any real-world value.
In addition, as Nick Rose Ntertsas, CEO and founder of the NFT market Ethernity Chain pointed out, users are getting tired of Facebook’s centralized dominance. He added in a conversation with Cointelegraph:
“exist [the pandemic-fuelled digital] During the transition period, the adoption rate of cryptocurrencies increased fivefold. At the same time, public opinion surveys around the world show that people’s distrust of centralized technology platforms is becoming stronger and stronger, and they are concerned about the essential nature of encryption and blockchain in protecting privacy, realizing peer-to-peer transactions, and supporting transparency and immutability. The evaluation is getting higher and higher. “
This is even more pertinent considering that Diem’s ??utility was subject to pre-emptive restrictions by regulators even before its launch. Regardless of how Diem is ultimately used in the Facebook meta-world, regulators have made it clear that Diem is unpopular in the established financial system.
Therefore, it is clear that the closed Facebook metaverse will be limited to a completely different value proposition than the decentralized metaverse project is trying to achieve.
At the same time, decentralized digital platforms are already under construction and flourishing. Does this mean that blockchain-based platforms may fall into the same fate as Instagram and WhatsApp, and be swallowed as part of the Meta acquisition frenzy? Sebastien Borget, co-founder and COO of Sandbox, believes that decentralized projects can take different approaches:
“Usually, large technology companies will stand by while new entrants are fighting for relevance and market share-and then suddenly acquire one of the strongest players. But this strategy only works when the startup is sold. So there must be different economic incentives, which is why Web 3.0 is so powerful. It aligns the platform with the users to build an independent platform where the users have ownership of their governance-and ultimately succeed.”
A meta universe operated by a tech giant?
Facebook may not try to dominate, but decided to integrate with established meta-universe, gaming, and crypto-finance protocols-this may be a more destructive scenario. Considering the size of Facebook’s user base, it may have a major change in the encryption field.
Therefore, is there a scenario where someone can transfer NFT assets between Facebook Metaverse and the decentralized Metaverse network? Sell ??NFT assets issued by Facebook on DEX? Import 69 billion US dollars of Beeple into the Facebook Meta Festival to be exhibited in a virtual gallery?
This seems unlikely, because it will cause a major change in Facebook’s mentality. Although it will create more economic opportunities, regulatory issues, risk assessments, and Facebook’s past attitude toward consumer competitors rather than keeping pace with them may become important obstacles.
The most likely result seems to be that Facebook will try to cooperate with mature centralized technology and financial companies to bring value to its meta universe.Microsoft has Announce yourself to enter the meta universe, But perhaps not a direct competitor to what Facebook is trying to achieve. Compared to Facebook’s VR-centric approach, Microsoft’s Metaverse focuses on enhancing the “team” experience.
But it seems more likely that these two companies will provide some kind of integration between their Metaverse platforms, rather than either of them eager to work with decentralized open source competitors. After all, Facebook’s initial attempt to launch Libra involved other large technology and financial companies.
Take advantage of the sun to dry the grass
Just as Libra created a lot of hype and was eventually suppressed by regulators, the development of Facebook Metaverse seems to be able to exert its influence on the cryptocurrency field in the same way.
Regulators will limit Facebook’s ability to participate in currency or finance, and it is unlikely that the company will suddenly have a desire for open source, decentralized solutions.
However, one of the positive pushes Libra brings to encryption is publicity. Ntertsas believes that this alone is enough to promote the decentralized NFT industry, and explained:
“Meta’s plan will greatly increase the utility of NFT issuers and mints. Then, NFT can be used as meta-universal goods-from wearable devices to artworks, to collectibles, and even status symbols-NFT has unlimited use cases And utility, and what they can become in the growing NFT ecosystem.”
In this regard, the decentralized Metaverse project has many opportunities to become the focus of attention through its products and show how decentralized solutions provide solutions that Facebook is still developing. Borget urges the community to seize the opportunity:
“It is time for us to redouble our efforts to build an open, decentralized, and user-driven Metaverse vision. We must also invest time and money to explain the benefits of our vision for the services provided by Facebook in the world so far.”