>TheOpen
Metaverse
OS_

Author: Jamie Burke

>Foreword_
Science fiction like Ready Player One have described ‘the Metaverse’ both as a destination and dystopic process of capture and control. In RP One: IOI, a single corporation, wants to
own and control the OASIS’ servers and databases, where they could: delete people, access any
information, change the rules of the world, and print themselves infinite currency.

In RP One: IOI, a single corporation, wants to own and control the
OASIS’ servers and databases, where they could: delete people,
access any information, change the rules of the world, and print
themselves infinite currency.
The parallels in the first virtual worlds we experience in gaming today and The Web moregenerally are striking: centralised, closed, proprietary and extractive, with shareholder supremacy
over user centricity. Where giving away your time and data in return for ‘free’ access to platforms
has become normalised.
This post is a collaborative work from across the Outlier Ventures network which proposes
an antidote, and a thesis, for how we can achieve an alternative Open Metaverse.

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“This Metaverse is going to befarmore pervasive and powerfulthan anything else. If one
central company gains controlof this, they will become more
powerful than any government,
and be a god on Earth”_Tim Sweeney

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>Defining
The Metaverse_
Technically the original vision and definition of the Metaverse was a point in time when theblurring of a distinction between physical and digital happens. This has typically been thought ofin the context of AR (Augmented Reality) and VR (Virtual Reality) otherwise known as Mixed Reality
becoming ubiquitous.

If we think of the metaverse as a far off destination we will almost
definitely sleep walk into not addressing some fundamental design
choices
However, we believe it’s important we think of it not as a destination but a journey or process.
This is because it’s important to acknowledge the beginnings of the Metaverse are already here, ‘’weare just experiencing it in 2D’’. This is critical to understand because if we think of the Metaverse as afar off destination we will almost definitely sleep walk into not addressing some fundamental design
choices about the principles of how we want it to operate, and potentially replicate or deepen whatis broken about the Web today.
As I will outline this process is multi-dimensional and has already begun, through the creationof new virtual worlds both in the context of gaming with MMORPG (Massively Multiplayer Online
Role Playing Games) but also other social venues and experiences. Each exists on a spectrum withseveral conflicting characteristics; where the production of content is both by studios and independent creators, value transfer is bi-directional (from digital to physical and physical to digital), where
value is both transformed entirely or just represented and is both passively or actively consumed.
Much of this process is bottom up and driven by market forces and the general direction of technical innovation but we also believe will increasingly begin to interplay and be informed by top down
government policy around data rights, privacy, antitrust and most importantly financial legislation,
all of which of course vary wildly around the globe.
Furthermore, today people still make a distinction between the physical and digital economy
even though in reality a company like Amazon is a hybrid of the two. On the one hand direct-to-consumer has dematerialized much of the retail supply chain but its still both a virtual mall and networkof physical fulfillment centres moving around physical goods, as well as a business with a growing
number of virtual goods and services like ebooks, music and video streaming which are consumed
entirely on its proprietary devices and platform. So is a company like Amazon part of the Metaverse?

It seems one of the defining characteristics of a metaverse wasthat somehow it was an economic system independent of, andenjoys supremacy to, old fiat based economies controlled bynation states.

4It seems one of the defining characteristics of a metaverse was that somehow it was an
economic system independent of, and enjoys supremacy to, old fiat based economies controlled
by nation states. This is not true for a platform like Amazon which is still primarily a US based company, that uses the local fiat currencies for customers and staff and is increasingly entwined with
the US state and its various agencies but still ultimately at the mercy of central banks and various
governments policies. If we look at Facebook’s efforts to launch its own digital currency with Libra(which presumably would have extended into its VR platform, Oculus), because it is a highly centralised and fiat based company, it has been aggressively constrained and in effect neutered as a
genuine disruptive and sovereign crypto-currency.
t could be considered partially true some games platforms are so big they are closed
micro-economies, with their own currencies which they control centrally and value systems, likeexperience points systems, in-game items (skins) and marketplaces, where significant amounts of
the wealth are held and traded. This is even more substantial when you think of that as a proportion of a person’s wealth, when seen in younger generations. But the reality is only a few even let
you transact in and out of their closed platform using fiat in order to interact with the ‘real’ world
because of limitations imposed by governments around fears of money laundering. But evenmore importantly, wealth is not directly transferable between these microeconomics into a virtual
meta economy with its own sovereign currencies. And you can’t generally borrow against virtual
wealth to buy physical assets, putting digital natives at an economic disadvantage, where 63% ofgamers said they would actually spend more on skins if they had ‘real world value’.
It is because of this I propose perhaps the defining characteristic of a true Metaverse isthat it needs its own economy and currencies native to it, where value can be earnt, spent, lent,borrowed or invested interchangeably in both a physical or virtual sense and most importantly
without the need for a government.

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>Competing
Multiverses_
To put it simply there are at least two versions of the Metaverse
we observe emerging: one dominated by closed platforms and
Big Tech like Facebook / Oculus and the other built on open
protocols like Decentraland
It is also true there are competing visions for the Metaverse and it is not yet clear if they
can and will co-exist or must be in competition. To put it simply there are at least two versions of
the Metaverse we observe emerging: one dominated by closed platforms and Big Tech like Facebook / Oculus and the other built on open protocols leveraging blockchains like Decentraland.
But the distinction of open and closed isn’t just limited to technology choices and theextent to which platforms embrace open source principles with their code and data but importantly
whether they have a closed economy, within or across their own proprietary games, or whether
they allow transferability of value outside their ecosystem, how that interacts with fiat based systems and to what extent they do or don’t control the monetary and fiscal policy of the underlying
economy itself.
Furthermore, there is also another technical and philosophical distinction between visions
and emergent actualities of metaverses which could be described as: low-fi to hi-fi. There are platforms that deliberately push the technical boundaries of the experience through both softwareand the hardware requirements like Oculus and those that design for the lowest possible device
and bandwidth requirements for universal accessibility like Cryptovoxels. Although it must be said
to our knowledge all of these virtual worlds still require at least a smart phone which still currently
excludes 6/10 of the global population.
Hi-Fi

Closed

Open

Lo-Fi

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You can take these as a form of axes which allow for a crude classification of metaverse
platforms and virtual worlds to emerge. We believe these two axes are the most important toconsider because when combined they represent the cost to enter the economic system and theability to off-set that cost by earning value for different demographics.
It could be said there is a third classification about whether the platform allows for user
generated content or not, but we think this difference will fade away with time. Most platforms
to varying degrees will allow for UGC like Roblox or Minecraft, and will fall under the degree towhich the virtual world is generally ‘open’, so UGC is not important as a separate dimension whenlooking to project into the future of the metaverse.

With time an open metaverse built on shared open source
protocols, open infrastructure and a single unifying (yet open)
financial system will erode, or ‘eat’, and potentially eventuallyreplace closed platforms due to powerful network effects
It is our belief, and the thesis of this paper, that with time (the one thing we don’t answer
is how long) an open metaverse built on shared open source protocols, open infrastructure anda single unifying yet open financial system will erode, or ‘eat’, and potentially replace closed platforms due to powerful network effects. Leaving the only remaining distinction between virtualworlds; if they are low-fi or hi-fi. This final point is important and something that we believe we as
an industry should always maintain in order to be as inclusive as possible and onboard as many
people out of the old economy and into The Open Metaverse.

7>Web 3,a stack for
an Open Metaverse_
So why are we so convinced of this eventuality? Well we believe there are several technology trends that are beginning to converge. This started with a trend we outlined back in 2016
which we termed The Convergence Thesis which saw how amongst other things IoT, VR and AR
and AI would begin to interplay and reinforce one another into a new Internet because of blockchain technology and the shared data infrastructure and new open economic systems they enable.
Whilst still nascent, this trend (keeping in mind it was written in the context of decades)
has as predicted begun to play out and formed the basis of our investment thesis as a venture
capital firm and accelerator going through several iterations; the second being The Convergence
Ecosystem in 2018 and then The Convergence Stack in 2019.

Web 3 is a distinct and separate Web paradigm to today’s Web 2,
based on centralised platform monopolies and highly regulated
fiat financial systems, to one that is increasingly decentralised
and based on user centricity and the sovereignty of their data
and wealth.
However this is now more generally thought of as Web 3, a distinct and separate Web
paradigm shift from today’s Web 2 (based on centralised platform monopolies and highly regulated fiat financial systems described earlier), to one that is increasingly decentralised and based onuser centricity and the sovereignty of their data and wealth. In effect where ‘the user is the platform’.
It is a paradigm ultimately based on blockchains and their atomic units of account becoming the means that value is ‘minted’ (created), stored or transferred across other technologies as aform of wealth. But digital wealth that can be programmable and represent an increasingly complex
range of assets from in-game items and virtual land, to loan agreements or futures contracts. In
aggregate representing an entirely new financial system often referred to as DeFi (Decentralised
Finance).

In an evolutionary sense by using the Open Metaverse OS thevirtual world is pregnant with Web 3.
You can think of this confluence of convergent technologies as a common operating system for an Open Metaverse that sits between the hardware, application software and the user andbecause of its open source characteristics, and anything that exists on-chain (on a blockchain) is
transferable and its metadata visible, the DNA of the virtual worlds that build on top of it fully oreven just partly is passed on or inherited. In an evolutionary sense by using the Open Metaverse
OS the virtual world is pregnant with Web 3.

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>The Web 3
Toolbox­_Web 3 consists of several principles, protocols and standards which could be said toform a stack that will inform and can and is being leveraged by the entrepreneurs and architects
in The Metaverse.
In combination these technologies can be seen as a highly composable Web3 Toolbox
for The Open Metaverse, where they are one and the same thing.

The Web 3 Toolbox
Self Custody and Access - Wallets/Front End Applications
AgentsDecentralised
Finance (DeFi)• Aggregators• DeFi Primitives• Oracles• DataMarketplaces• Units of value ‘Internet Money’

NFTs Sovereign
Virtual Goods

Decentralised
Governance

Decentralised
Cloud Services

Self-sovereign
Identity• Minting houses• Marketplaces• Token standards• Metadata
standards• Hybrid NFT+FT• Physicallyredeemable NFTs

• DAO frameworks• Votingmechanisms• Staking & slashing• Multisignature
wallets• Community
Audits• Storage• Compute• Databases• Query & APIs

• DIDs• Veriﬁable claims

Programmability Layer
Transaction Layer
Peer-to-Peer Networks

The Web 3 Toolbox brings a number of core innovations and building blocks, located in
the middle of the diagram:Internet Money: Bitcoin introduced a form of internet money and since then has served
as a hedge to deflation, and increasingly for institutions as a treasury instrument, in fiat based systems due to loose monetary policies after a series of negative economic events and a gateway
for many into a new virtual economy (at the time of writing estimated at 1 trillion USD in market
capitalisation)9

Decentralised Finance (DeFi): Ethereum extended Internet Money through the introduction of smart contracts to allow for stablecoins, that is virtual currencies which unlike Bitcoin are
designed to be stable rather than a speculative asset. The generic programmability has allowed foran explosion in open, decentralised financial instruments often referred to as DeFi. These include
borrowing and lending without the need for banks, as well as more sophisticated instruments suchas options and decentralized exchanges, and some entirely novel structures, such as automatedmarket makers. This has formed a proto-capital-market, at the time of writing estimated at $25
billion in total value locked.
Sovereign Virtual Goods: Bitcoin introduced digital scarcity for a fungible asset (“internetmoney”), where each token is interchangeable for another. Similarly, digital scarcity for uniqueassets has been realised through NFTs (Non Fungible Tokens). Here, unlike with a currency, theunderlying assets are not interchangeable but unique in some way. The innovation in this area
has concentrated on Ethereum, and as the result of a handful of simple standards for NFTs andtheir metadata there has been an explosion of innovation initially in a creator economy context
of; art, music, tickets, virtual land, collectibles and gaming items. Whilst not new, their mainstreaming began late 2020 and have proven to be a powerful mechanism for the world builders andcontent creators of the Open Metaverse. They act as a gateway through digital consumption &play that will suck in the masses of users primarily because any activity in the open metaverse canbe gamified and rewarded with NFTs, which can in turn have value on the open market. Virtual
goods are ultimately easier to sell than physical goods, and will have significant and increasing
value. Core technologies and entities around NFTs include minting houses, which facilitate theinitial creation of the goods, marketplaces, which similar to real-world auction houses enable pricediscovery and trading.
Digital to Physical redemption: beyond purely digital sovereign virtual assets, new specialised protocols like Boson Protocol solve the digital to physical redemption problem, by representing physical items as NFTs which can be redeemed in the real world without the need forintermediaries. Enabling decentralized autonomous commerce across the metaverse blurring thedistinction between virtual and physical.
Decentralized governance: as a result of both the necessity for governing the growing
landscape of decentralized technologies and networks and the ideals of its community, a classof tools and concepts for decentralized governance has emerged. The concept of a Distributed
Autonomous Organization (DAO) enables individuals and entities to form groups, jointly own
assets, make decisions and participate in the economics of the DAO. Several mature building
blocks for DAOs have emerged, including Aragon and DAOStack. They include and extend totools like voting structures, and multisignature wallets for joint custody of assets. On the level of
protocols, mechanisms for staking and slashing have emerged to incentivise participants in these
open networks to behave benevolently. The Open Metaverse can benefit from insights and tools
from decentralized governance both for governing metaverse platforms and their components,and enabling economic participation in each, as well as for people to organize themselves within
it, such as with gamer guilds or clans.
Distributed Compute & Storage aka Cloud 2.0: The idea that The Cloud of distributed
storage and compute could also be decentralised by specialised protocols like Filecoin or CUDOs,
so not reliant on or giving any advantage to any one company for example Amazon, Google
or Microsoft which control 66% of the market. It almost means people that invest in expensive
hardware to access the metaverse and increase performance can offset some of the cost by renting out capacity and in turn earning crypto-currencies and joining the virtual economy. It is also
believed at a certain scale, and density in a given physical locale, it could increase the proximityof physical hardware to The Cloud at any given time as we unlock the bandwidth and compute ofneighbouring connections, and therefore allow greater ‘edge computing’ for Metaverse ubiquity.

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Self Sovereign Identity & Verifiable Claims: For a truly Open Metaverse, it is crucially
important for people to have security of an online identity which they can protect and accumulate
value with. Sovereignty and by consequence self custody of what the user owns are core principles to Web 3. However for what is called a true SSI (Self Sovereign Identity), we need dedicatedprotocols solely for the preservation of privacy of identity itself vs being public and on-chain whenidentity and its data is treated as just another digital asset. Innovations in Self Sovereign Identity
and Verifiable Claims specifically mean we can identify ourselves, transact and prove things about
ourselves (attest) without revealing the underlying or associated data. This is critical to avoid therole of a government or platform as the sole arbiters of our online identities, deplatforming oreven state violence. And being applied to gaming and the metaverse by teams such as Crucible.
People, organizations and machines access these capabilities directly through wallets
and applications, and by delegation through automated agents, always following the principles
of sovereignty and self custody:
Self Custody - Wallets and Applications: The self custody of digital assets and wealththrough user-controlled private keys and open source wallet software (free of any platform formof censorship and control) is foundational to crypto and as a consequence the Open Metaverse.
This is sometimes referred to as sovereign wealth. The infrastructure was initially purely for theadministration of crypto-currencies but is now being used for the management of other digitalassets like data and NFTs (Non Fungible Tokens).
Agent based Web: Computer programs with economic agency or autonomous agentsthat live and transact on blockchains to carry out increasingly complex automatic programs, suchas AEAs (Autonomous Economic Agents) via Fetch.ai.

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>Web 3 is built
upon foundational
elements:
Peer-to-Peer networks: Network structures where nodes find each other and form stablenetwork configurations without the need for a central server. P2P network technology builds on
decades of history, including the likes of Napster and BitTorrent, but also the low-level protocolsof the internet, which is itself a peer-to-peer network.
Transaction layer: Blockchains and other forms of distributed ledger technologies in theirsimplest form allow for transfer of units of value from one network participant to another. Blockchain
technology and the consensus algorithms part of it have enabled secure transactions between
parties which don’t trust each other, in a decentralized manner, under adversarial circumstances.
Bitcoin is an example of a blockchain which is mostly a transaction layer.
Programmability layer: Building on the transactional capabilities, some blockchains offer
rich, generic programmability to enable a wide array of use cases beyond simple transactionality,
while preserving the properties of being decentralized and highly secure. Ethereum was the firstmover in establishing a programmable decentralised ledger, and is still far ahead of its competitors in terms of adoption by developers and users, and is the foundation under many of the core
innovations of Web 3 as we present them here. That said, there are now dozens of competitive andcollaborative ecosystems besides Ethereum, many of which are highly mature, and also enablingsome combination of DeFi, NFTs, Decentralized Governance, Decentralized Cloud Services andSelf Sovereign Identity.

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>Building in
the Metaverse_
Were you to be using this toolbox to build an entirely new instance within the Metaverse(such as a virtual world), or looking to evolve an existing Web 2 platform, you would be presented
with a set of design decisions and trade-offs at several levels of your stack between open / sharedor closed / gated and proprietary. You might reasonably elect for an open solution at one level
and closed at another either permanently or temporarily based both on the immediate needs ofyour business and its stakeholders (like shareholders), users or a philosophical principle. In theend there will always be a tension to be imperfectly resolved.
A way to approach this is to look at the anatomy of any given instance of the Metaverse
as a platform at its various levels of the stack as we have outlined below.

Anatomy of a Virtual World
Platform

End-user Software

User
PersonaEnd-user Hardware

In-world Assets
Physical(Virtual)

Space

Objects

Avatars

Economics

Currency

Financial
Instruments

Marketplaces

Content

Media

Data
AssetsBridges to thedigital world

Bridges to thephysical world

World Primitives & Rules

User identity,
ownership andreputation

Mechanics/
Physics

Programmability

AgentsComputeSoftware Backend

Storage

ComputeHardware Infrastructure

Storage

13

•
•
•
•
•
•
•

•
•
•
•
•

User persona: the identity and properties of end users, including their name, avatar,ownership of assets, reputation.
End-user hardware and software: the hardware devices and software through which end
users experience the world, including VR / AR headsets, PCs, gaming consoles, client
softwareIn-world assets: the assets that exist within the virtual world
Physical (virtual): the space of which the world is composed, such as sections and parcels. The objects that can exist within it, such as buildings, furniture, vehicles, wearables,
collectibles, and avatars as a special case.
Economics: economic elements of the world including in-world currency, financial instruments and marketplaces.
Content: content that can be introduced into the world, including media such as images,
audio and video, and structured data assets.
World primitives and rules: how does the world work? The model for user identity, ownership and reputation. The mechanics and physics of the world. Can users fly? Run? How
fast? Can objects be stacked on top of each other? Attached to buildings? Programmability
and agents - in what ways can elements of the world be automated, and can autonomous
digital agents interact with the world?
Software backend: the backend components that make the world work, including
Hardware infrastructure: the hardware on which the backend components of the world
run. Servers in data center, cloud services, networking.
Bridges: ways in which the world can connect to external systems and environments.
To digital worlds: using shared layers for assets and economics, external programmability
via APIs, teleporting to different virtual environments
To the physical world: including AR based activities such as in Pokemon Go, and digitalelements that have a physical counterpart, such as physical redemption for digital assets.

Each of these elements can exist in any virtual world, in some form or another, open or
closed. Many centralized virtual worlds have in-game currencies, some have forms of in-gamefinancial instruments, for example mortgages in Animal Crossing.

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“The foundational idea of
humanistic computing isthat provenance is valuable.
Information is people indisguise, and people ought
to be paid for value they
contribute that can be sent
or stored on a digital network”_Jaron Lanier, VR Futurist

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>The OpenMetaverse OS_
So how ready is Web 3, and consequently a Open Metaverse OS, for prime time? Well on
the one hand the Web 3 ecosystem is thriving with several nascent technologies that can enable
many aspects of an Open Metaverse, and could and is being deployed in virtual worlds right now,
albeit in an incremental fashion. But on the other it’s still significantly behind on several measures
such as performance and cost when compared to Web 2 which has had decades to mature andwhere the benefits of economies of scale have been achieved by platform monopolys.
Equally, Web 3 technology has instead optimised primarily for high degrees of decentralisation and transaction security rather than and sometimes at the expense of enabling smooth,real-time interactions, and its applications for more 2D web based experiences on desktops andmobiles. As a consequence user experience in Web 3 has to date been poor and requiring ahigh degree of technical literacy due to both the radically different security model of self custodyand the nascency of the industry; with frictionless user experience of web3 technologies within
gaming engines even further away. But this is changing as increasingly the world of Web 3 andcrypto is it’s self converging with new environments like gaming and VR there is a generational
shift away from Web 2 platforms.
Therefore the Open Metaverse OS is best understood as an evolving collection of highly composable technologies that will increasingly, but selectively, be used to make aspects of aOpen Metaverse possible as it seeks to serve a greater global population across several use casesand environments. It is also meant as an invitation and inspiration for teams to build those components that don’t exist yet, or aren’t ready for the needs and sheer scale of ambition we have of
The Open Metaverse.
As it stands The Open Metaverse OS is concentrated on the critical lower layers of the stack,including non negotiable features such as user-sovereign identity and assets, in world economics
and bridges into and out of its economy, and between each themselves leaving the intricacies
of gaming engines, 3D modelling toolchains and rendering stacks to the primarily centralized
world. However, over time we expect The Open Metaverse OS to also eat further downwards todecentralise those aspects as well.

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The Open Metaverse OS

NFTs (sovereign
virtual goods)
Ethereum, otherblockchains like Flow
Minting platforms:
Mintbase, Mintable,
InﬁNFT Storage:
Filecoin, Siacoin,
Storj, Arweave

Tokenization
Ethereum, otherblockchains

Decentralised
Governance
DAOStack, Aragon,
SnapshotPlatform

SSI and veriﬁable
credentials
Crucible, Evernym,
KILT Protocol

NFT marketplaces
Opensea, Rarible,
SuperRare, Cargo,
AtomicAssets

End-user Software

User
Persona

Tokenization
Ethereum, otherblockchains, Haven
Protocol, Stable coinprojects like Terra

Asset management
Self-custody with inworld transactions

Data marketplaces
Stream, Ocean
ProtocolEnd-user Hardware

In-world Assets
Physical(Virtual)

Space

Objects

Avatars

Economics

Currency

Financial
Instruments

Marketplaces

Content

Media

Data
AssetsBridges to thedigital world

NFTs with Physicalredemption
Boson Protocol,
Physical Swag NFTs,
Kred NFTs
Bridges to thephysical world

World Primitives & Rules

Decentralised
ﬁnance (DeFi)
Protocols,
aggregators

Decentralised
query and APIs
The Graph

User identity,
ownership andreputation

Autonomous
Economic Agents
Fetch.ai
Mechanics/
Physics

Programmability

AgentsComputeSoftware Backend

Storage

ComputeHardware Infrastructure

Storage

Decentralised
computeGolem, CUDOS,
DﬁnityDecentralised
storage
Filecoin, Siacoin,
Storj, Arweave,
DﬁnityDecentralised
databases
BigchainDB, GUN,
OrbitDB, and Secure
Scuttlebutt (SSB),
Ties, DB, 3BOX

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>An Openness
Framework_
This way of thinking about an Open Metaverse OS also allows a framework through whichto assess the openness or otherwise, design choices and trade-offs made by a given instance ofthe metaverse including; is the code open source, are the assets portabile, is the data platform
proprietary or user controlled, who can create value, and the degree of UGC vs platform madeand how can it be monetized.
Platform>Open
Metaverse
Framework_
For each box ask thesequestions:

End user

Access control

What’s the ownership model?
What’s the model to control it?
Who controlls it?
What are the financial models?
Who Bears the costs?
Who gets the financial returns?

User persona

Hardware

Software

Where are user persona created and stored?
Who can grant/deny access to the world?
Which part is open and user sovereign vs closed?

Do users own their hardware?
Are there many different options on suppliers?
Is it affordable?

Open Source?
How is client software distributed?
Any gatekeepers?

PhysicalSpace

Objects

Avatars

How is space divided? (Section, parcels...)
How is new space created?
Who can create it?

What types of objects exhist? Buildings, Furniture,
What rules are avatars subject to?
Wearables, collectbles, vehicles...
Who decided these rules?
How are new types of objects created?
How are new objects created?
Can objects be transferred and traded?
Can objects be introduced and taken out of the world?

Currency

Financial instruments

Marketplaces

Which currencies can be used?
Is there a native currency? Who can mint it?
Can someone put the currency out of use “press the pause button”
How does this currency relate to fiat? Is it stable?, is it fluctuating?
Is it tradable on external exchanges?

Which can be used? Royalties, renting, mortgages...
Who can create them?
Can they be used outside of the world?
What regulation and governance applies to them?

Can marketplaces be treated?
Who can create and operate them?
Who can list items on them?

What’s the access model?
Who controls access?
How is ownershipand access control
made transparrent,
if at all?

In-world
assets(Virtual)

Data
Where and how
is the data stored?

Economics

Which standards
are supported?
Can data be accessed
externally?
Can data be imported?

Content

BridgesWorld
primitives
and rules

Data Collection
Which data is collected?
Tracking, biometric,...

Media

Data assets

Which types of media can be used?
Can media be introduced and taken out of the world?

Can data assets be added to the world?
What can be done with them?

DigitalPhysicalWhich connections to the digital world are possible, how?
Which standards are used?

Which connections are possible, how?
Who can create?
Who can use?

User identity,ownershipand reputation
What’s the model for user identity,
ownership and reputation?
Who determines these rules

Software
Backend

What are the main components?
Who operates them?
How are they incentivised?
Which components are peer-to-peer?
Which are distributed ledgers?

Hardware
Backend

What type of Hardware?
Who operates?
How are they incentivised?

Mechanics/Physics

Programmability

AgentsHow are world mechanics established?
How are they governed?

Which mechanisms exhist to program and automate
parts of the world?
Who can use them?

Can digital agencts interact with the world?
Can they have economic agency?
What capabilities can they have?

It is important to stress however it is unlikely openness is absolute and it’s choices binary
but rather on a spectrum. And even within those virtual worlds and platforms we could classify as
the most ‘open’ there will be significant nuance, often driven by technical limitations both of being
an early adopter as well as dependencies on underlying protocols like Ethereum which require
work arounds for improved usability comprising what happens on-chain, impacting ‘openness’.
For example it seems Decentraland is the only metaverse project which has a fully open
source approach but still takes a more restrictive approach to avatars and wearables. E.g. like
Cryptovoxels it doesn’t store avatar files on-chain, nor is their system available to outside avatar
models and wearable minting is curated.
Equally, we presume any given instance will shift over time towards openness basedon pragmatism rather than dogma. And we expect and highly encourage existing closed virtualworlds to gradually adopt components out of the Open Metaverse OS to increasingly open up
and reap its benefits.

18

>So why build in
the Open Metaverse?_
So why build or integrate a virtual world or good with The Open Metaverse OS at all?
Especially, when compared to a more convenient closed and centralised approach, it comes withso many trade-offs and limitations to mass adoption?
Well firstly there is a general direction of travel towards open standards in the Metaverse
even by what you might at first glance regard as it’s closed participants including:Open 3D object media standards: There are a number of now well established standards
around 3D object media including Pixar’s USD (Universal Screen Description) and NVIDIA’s MDL(Material Definition Language), and NVIDIA’s Omniverse (Open Beta) and GLTF.
Metaverse Web Browsers: There are increasing in-browser capabilities being developed
from Google Gaming Browser and Mozilla VR, with WebGL now widely supported and WebXR on
the verge of enabling generic support to VR and AR devices, as well as crypto-currency browser
wallets like Metamask. Although we are not quite there with seamless in-world transactions.
But also as alluded to earlier we believe there will be both top down and bottom up reasons driving a move towards openness. Let’s start with bottom up because we believe this will be
the primary driver for innovation in its early stages. As described the principle of self sovereignty,
sovereignty of identity and associated digital wealth (including assets and increasingly data) arebased on the concept of user centricity: where a user takes precedence over any given platform.
Where some may argue the user in aggregate is the platform. In this context virtual worlds become
the interface to create, trade or experience virtual goods and services which are portable and not
restricted to a single platform. This is a powerful economic driver and a fundamental paradigm
shift away from the Closed Metaverse and its business models we see dominate the Web today.

When creations, wealth and assets can have a life ‘off platform’and be exchanged and become infinitely interchangeablewith one another freely in open markets they grow in liquidity
and consequently value, simply because more value can beexchanged between itself without limitation. You could consider
it a ‘value squared’.
When creations, wealth and assets can have a life ‘off platform’ and be exchanged andbecome infinitely interchangeable with one another, freely in open markets, they grow in liquidity
and consequently value, simply because more value can be exchanged between itself without
limitation. You could consider it a ‘value squared’.
Many creators like artists are experiencing this for the first time where assets with NFTs
(Non Fungible Tokens) are sold for more off-platform in secondary markets than in their primarysale (where they are minted). And this will be extended even further as we develop standards forroyalties and can be to translate memes themselves into forms of social currencies rewarding notjust the creation of a thing, but its value chain of evolution and amplification through sharing insocial channels. This brings powerful network effects not experienced in closed systems and it is19

our belief as creators, and this increasingly includes established popular brand franchises looking
to new mediums to monetise their assets, begin to follow the money the open virtual worlds thatallow for economic interoperability will win out.

Discord is becoming a social bridge between metaverses.
Enabling a form of Open Metaverse 1.0
And we are already seeing early but increasing forms of integrations of The Open Metaverse
OS into established social channels like Discord including crypto wallets and NFT marketplaces
and exchanges. Discord brings with it 250m+ gamers who will most likely first experience Web 3
technologies, and the Open Metaverse economic layer, without ever leaving Discord. Its importantto remember Discord’s rise coincided with the growth of e-sports, through games like League ofLegends, Overwatch and Fortnite which all initially had limited communication tools for streaming, which Discord elegantly solved outside of those closed worlds in an open environment. And
the same is happening with nascent Open Metaverse virtual worlds like Decentraland, which at
the time of writing does not support in world audio requiring in world events to use Discord forthe audio streaming. So cross world social, and increasingly economic layers, will run in parallel
to virtual worlds initially until they become embedded with them.But even once these limitations
are resolved in these new virtual worlds discord is likely to continue being the social layer aroundand between worlds and likely to play host to the convergence of Web 3 & gaming communities.
We can also regard different virtual worlds, open or closed, as slices of a larger whole.
Users can and will by design interact with and be part of one or more of these worlds. And whilst
a single world could outgrow all others and become a significant part of the Multiverse they do
not enjoy the same defensible ‘moats’ seen in Web 2 of locking users and their data into theirplatforms and holding them ransom. The only challenge to this being closed hardware that is so
desirable and performant end users will tolerate a more closed approach as has been seen withApple. That aside this could be a significant break from the cycles of bundling and unbundling wetypically see in internet based technology paradigms. And the only real moat can be the degreeof openness, economic incentive design and verified trust in the rules of the virtual world.
This later point around incentives is critical because one of the powerful things about
blockchains as we have seen with Bitcoin, Ethereum and its various DeFi protocols is you can hardcode economic incentives for early adopters to join a network into the system itself. Bootstrapping
adoption, compute power and storage or even financial capital to develop the network. And weare seeing this with many early virtual worlds both creating their own crypto currency or selling
virtual land, or offering NFTs as rewards all of which is easily tradable off platform with and forother crypto currencies. In effect the Open Metaverse is its own bank and can create any numberof incentives and games to grow adoption.

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Therefore it is more likely virtual worlds in The Open Metaverse are increasingly interoperable and interconnected to the point it will be hard to distinguish them as separate but rather
different instances of a whole.

Open
Closed21

>The Empty
World Problem_
Despite all of this however today it is fair to say The Open Metaverse, especially whencompared to the Closed Metaverse, is one full of empty worlds. The number of daily active users
across all platforms is still estimated to be in the low thousands, and is almost irrelevant when compared with Fortnite alone which has 350m+ monthly users. This is primarily because the former
model predates the later by at least two decades as well as the sheer venture capital and cash piles
these franchises have at their disposal to create great content as an example Epic Games Fortnite
is projected to generate $5 billion in revenue with a profit of $1 billion in 2020 accelerated by ayear of COVID. Rather than the model itself having any kind of long-term superiority and where
its closed nature is a temporary form of moat that frustrates users and creators alike.
If we look at the High Tech end of the closed spectrum the time and cost to develop andlaunch a AAA game on average is between $60-80 million and can take 2-3 years, requiring ateam of 150-250 people although advances in both Unity and Unreal gaming engines, whilst still
a duopoly, are dramatically reducing these numbers down. This makes creating content extremely
expensive and therefore the industry highly concentrated and difficult for new players to enterand challenge the status quo.
However, if we look at the explosive growth in user-generated content (UGC) as a trend
in gaming and virtual worlds generally through platforms like Roblox, which based on our earlier
definition would still be classified as part of the closed metaverse, you can see the power of letting
independent creators build games (a micro virtual world) on a shared technology stack and economic layer (albeit centralised) as a powerful way to bootstrap growth and user stickiness. Today,with 150m monthly users and creators earning $250m in 2020. They do this by making their worldbuilder kit Roblox Studio available for free but, importantly, you can not clone and fork the entire
platform where it still serves as a closed ecosystem. And even then Roblox still has 850 full time
staff to operate and recently needed to raise $530 million of capital at a $30bn valuation to grow.
It seems obvious that the creatively excluded will be more than willing to experimentin open and permissionless economic systems especially when they can derive a greater returnon their time not just in the creation of work but in perpetuity through secondary sales through‘on-chain royalties’.
So how can open virtual worlds first catchup and equal the content and rich experiencesof today’s dominant virtual world and gaming platforms? Well firstly there are a longtail of millionsof creators (in all forms of media production) currently locked out of participating and monetising their work at all in today’s virtual worlds, and they dwarf the industry’s staff working for closed
platforms. Many of them are already contractors who would prefer to be doing their own thing.
It seems obvious that the creatively excluded will be more than willing to at least experiment inopen and permissionless economic systems, especially when they can derive a greater returnon their time not just in the creation of work but in perpetuity through secondary sales throughon-chain royalties.
We have already seen bluechip artists like Beeple, who in and of themselves are almost
complete markets of both supply (with large back-catalogues of work) and demand with audiences in the millions, begin to move into open NFT platforms and convert their body of work into
NFTs for millions of dollars, in the process bringing millions of curious buyers and sellers into thisshared open economy.

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As a new channel this is also beginning to be leveraged by global franchises such as the
NBA and the Top Shot NFTs. And as NFTs become less about things to just passively store in awallet and more about things to experience socially in open virtual worlds. And very quickly they
will onboard ready-made audiences of hundreds of millions of users from the Web 2 social channels such as Twitter, Instagram and Tik Tok. And the rich base of music artists on these platforms
such as DeadMau5 are already experimenting with audio and mixed media NFTs introducing
their millions of followers to this new medium with value they understand. But I would argue evenmore important to mass adoption of The Open Metaverse as a creator economy is the hip hop
industry, which has already shown a keen interest in Bitcoin and represents ⅓ of global streaming
as a genre and culture could be the killer app for NFTs.

But I would argue even more important is the hip hop industry,
which has already shown a keen interest in Bitcoin and represents
⅓ of global streaming as a genre and culture could be the killer
app for NFTs.
Where in the closed virtual worlds of platforms like Fortnite, because of their sheer reachthey have become powerful channels for entertainers like Travis Scott to reach new audiences,very quickly artists, as content creators, will realise rather than just being paid to play in someone
else’s virtual world they can build and monetize their own virtual communities through NFTs where
they retain direct and full creative and financial control. This will only be accelerated by new NFT
platforms that specialise in media types and / or genres of entertainment serving as an onramp
into The Open Metaverse, in the same way crypto-currency exchanges like Coinbase and Binancebrought crypto generally to millions of retail investors through the sale and exchange of ERC20s
and ICOs in 2017 driving media attention and a virtuous hype cycle.
Furthermore, with LiDAR technology now available to anybody with the latest iPhone, thephysical world can be mass rendered, translated into machine readable 3D models and converted into tradable NFTs to be uploaded into open virtual worlds very quickly populating them withavatars, wearables, furniture, and even whole buildings and streets. And because they are machinereadable leveraging open source standards like Pixar’s USD, NVIDIA’s MDL, Khronos Group and
NVIDIA’s Omniverse they can be fed into AI to spit out infinite variations which again can be better
monetised in global and open markets than any one closed platform.
When combined with promising innovations like GPT-3 from Open AI, which currently
allows for an open form of autoregressive language model that uses deep learning to produce
human-like text, such as Fable and DALL-E which uses a 12-billion parameter version of GPT-3
will begin to power virtual beings and stories we can interact with. And when it extends to otherforms of media, virtual worlds and their content will be able to be automatically produced infinitely.
This means we can expect to dramatically reduce the time and cost to produce games
or whole virtual worlds and economies whilst also tapping into a global workforce of millions ofcreators allowing seamless and decentralised collaboration well beyond the capabilities of a single gaming studio, record label or virtual platform.

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>Humanity’s greatest
economic experiment_
One of the most exciting and intellectually interesting things about an Open Metaverse,
pregnant with Web 3 principles, is you can openly and in a permissionless way experiment with
its underlying economics, and the rules of the game that underpin it both at the protocol layer but
also within each virtual world itself. And each experiment can be done in parallel to the other; inconcert and / or direct competition.
For example a project like Axie Infinity by design makes sure you can not derive value inthe system through pure speculation only by buying and holding Axies (playing cards). To earna yield or at the very least not see your investment decay you must put them to use regularly inplay. If you don’t want to or lack the skill to do that yourself you must create jobs by lending your
NFTs to players to put them to work.

Whilst play-to-earn is nothing new it is now going mainstream
where ‘play as work’ and innumerable variations including;hold to play, share or curate to earn and play for keeps, could
become the primary income for hundreds of millions of people
as a form of financial emancipation rather than digital feudalismwith sweatshops.
This means you can participate in the system by productive capital or through the work
itself. The consequence is there are whole villages in south east asian countries like the Philippines doing just that, where the income available is better than many ‘real world’ jobs if they exist
at all. And you can imagine it will be the same for the great unemployed youth from the COVID
economic fallout.
This doesn’t just replace the economy proper, it creates entirely new wealth in a purely
virtual sense but which puts bread on the table and roofs over people’s heads. Whilst play-to-earn
is nothing new it is now going mainstream where ‘play as work’ and innumerable variations including; hold to play, share or curate to earn and play for keeps, could become the primary income for
hundreds of millions of people as a form of financial emancipation rather than digital feudalism.

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“Video games are going tocompletely alter the way
our culture operates. It’s
drastically important toour society in a way that
we need to wake up to”_Heman Narula

25

>Top down_
Finally, there is an increasing top down mandate by governments to limit the power ofsocial platforms like Facebook and other various Web 2 platform monopolies from an antitrust
perspective but also from a Data Trade and abuse motive and a drive to unbundle platforms.
Currently this has been limited to social media but will quickly extend to closed virtual worlds
where the competitive advantage enjoyed by data monopolies, and as a result AI monopolies,
are challenged and then removed.

And whilst regulators are still trying to come to terms with what
crypto currencies mean and what their impact to their fiat based
economies will be, in the end they will realise their success is both
inevitable but also beneficial bringing about a form of open,
permissionless hyper-competition both technically but also in
financial services and inclusion which are undoubtedly in theinterests of consumers.
And whilst regulators are still trying to come to terms with what crypto currencies mean
and the impact to their fiat based economies will be, in the end they will realise their success isboth inevitable but also beneficial bringing about a form of open, permissionless hyper-competition both technically but also in financial services and inclusion which are undoubtedly in theinterests of consumers.

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>Conclusion_
Whilst at first glance many of the conclusions we’ve drawn to the uninitiated may feelfanciful or wishful thinking as we watch the convergence of Web 3 and the Metaverse happen
realtime: first slowly then exponentially many of its conclusions in retrospect will feel both obvious
and inevitable.

We can not assume it is both a panacea for the world’s ills nor
a utopia without its problems. But perhaps its saving grace iseveryone can finally have the ability to directly contribute in thefirst truly universal and permissionless economy humankind has
ever known.
However, as pioneers and active participants in this future we must also not go into thisblind to the fact that, like Web 2’s social media, whilst it benefits likely outweigh its dangers it is aseismic societal shift that will cause immense disruption including, and perhaps most especially,in the context of the nation state and fiat based economies of today. We can not assume it is botha panacea for the world’s ills nor a utopia without its problems. But perhaps its saving grace iseveryone can finally have the ability to directly contribute to it and control their personal destiny
as a user, creator and consumer in the first truly universal and permissionless economy humankind has ever known.

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>Thanks to_
In alphabetical order;
Adrian Biedrzycki
Ana-Maria Yanakieva
Aron van Ammers
Jim McNelis
Lawrence Lundy-Bryan
Mudit Marda
Ryan Gill
Tris Lit

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>5G_
Extends this even further
and promises to allow for
greater levels of bandwidthand ubiquitous network fromour devices, in particularon the move, so not limited(and therefore tethered) to
our home_

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>VR Hardware_
There are several innovations
driven by VR hardware
manufacturers that are
accelerating the ubiquityof the Metaverse. Firstly,
battery powered hardware now
allows untethered access toa media library through Oculus
2, opening up the option torun VR worlds from anywhere
when combined with 5G_

30

>Whilst competitors like Valveare focusing on higher tierpresentation coupled withfacial and body tracking to makeexperiences more immersive andHololens (and possibly Apple
maybe later this year, 2021)
are working on AR passthroughto present these digital items
on physical surfaces in users’
environments. Whilst theseare generally high end devices
companies like HP with theirReverb 2 are attempting to bringa lot of the advanced features
to market at a lower price pointcommodifying VR_

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>This can be combined withadvances in hardware (likeGraphcore and other AI-specificchips_ as well as open source
hardware for BCI and haptics
which accelerate the ubiquity
and performance of virtual
goods, services and worlds andenable a way to better capture
and transform and renderphysical objects into virtual
ones_

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