Grayscale Metaverse Report | Lifestyle Changes Drive Development, Potential Market Size in Trillions, Advertising and Social Commerce Markets are Key

The cryptocurrency asset management company Grayscale recently released a metaverse data analysis report, which analyzes changes in network patterns from various perspectives and highly evaluates the future integration of the metaverse with blockchain technology.

Grayscale Metaverse Report

Evolution of Internet Models

Everything began with the transformation of the internet era. The report starts with a simple description of the differences between Web 1.0 to 3.0.

• Web 1.0: People started to connect to the internet.
• Web 2.0: People started to connect to internet communities.
• Web 3.0: People started to connect to a virtual world owned by the community.

When further categorized, Web 3.0 introduces the concept of ownership ("Own") and shifts from the interactive article mode constructed by platforms in Web 2.0 to a virtual economy within the internet world. The most crucial point is that through blockchain technology, everything is once again decentralized.

Changes in Lifestyle Driving Metaverse Development

Technological advancements and changes in lifestyle habits are also contributing factors to the development of the metaverse. On average, American children spend at least 8 hours a day on television, video games, and social media, with social media consuming about 5 hours of their time.

The more time spent, the more people are willing to invest money in the digital space to establish social status within online communities.

With the changing internet landscape, the report suggests that revenue from virtual gaming worlds will significantly increase, reaching a value of $400 billion in 2025. Additionally, revenue from premium spend games will decrease significantly, replaced by more in-game virtual item transactions to enhance the gaming experience and social status within the virtual world.

The reason for such a change is mainly due to the fact that game developers in Web 2.0 typically prohibit players from monetizing their efforts in the game and ban item trading between players to ensure game closure. However, entering the world of Web 3.0, transforming in-game items or characters into NFT tokens resolves these issues, making player-to-player transactions commonplace, and enabling the monetization of a native online free market economy in the physical world. This evolution of the "creator economy" is what we commonly hear as "Play-to-Earn."

Grayscale believes that the potential market size of the future metaverse will reach $1.3 trillion, with advertising and community commerce markets dominating.

Metaverse Web 3.0 Economy

Early metaverses are typically built on Layer 1, with many participants contributing to games and in-game items. Users can engage in new forms of commercial activities within the metaverse after purchasing these items. It could include art galleries, office buildings, casinos, amusement parks, advertising billboards, sponsored content, music concerts, and more.

Behind the virtual economy of the metaverse is supported by various decentralized protocol technologies on the blockchain.

• Payment Networks: Transactions on the metaverse are based on cryptocurrencies.
• DeFi: Decentralized exchanges allow users to trade in-game items; lending platforms enable users to use virtual land for collateralized loans.
• NFT Identity Items: Players can purchase NFTs from other creators and showcase or sell them in the virtual world.
• Decentralized Governance: Web 3.0 metaverse users collectively determine the guidelines for the virtual spaces they own.
• Decentralized Cloud: Solutions like Filecoin provide a decentralized data storage infrastructure for the Web 3.0 metaverse.
• Self-Sovereign Identity: Reputation token data from other platforms can be transferred to the metaverse to identify identities or credit scores.

Web 3.0 Data Indicators

All these technological and behavioral evolutions are constructing a more complete metaverse world, attracting an increasing number of users. The number of active wallets in the metaverse has significantly increased compared to previous years, reaching approximately 43,000.

However, there is still a considerable user gap compared to Web 2.0 and earlier blockchain applications.

Although the development of the metaverse is still in its early stages based on various data, the number of users and commercial value are not yet mature. However, the open virtual world encrypted network of Web 3.0 allows us to glimpse into the future of the online world. The vast potential economy is driving old Web 2.0 platforms and companies to transform. With more and more industry giants entering this market, the maturity of the new era will only accelerate.