Turning Concepts into Reality: How Will the Metaverse Grow in the Future?

Unlike DeFi, the metaverse has garnered significant attention both within and outside the crypto industry, with traditional sectors increasingly entering this space. The previous article introduced mainstream metaverse projects in the blockchain industry; in this article, we will focus more on the future of the metaverse in a broader sense.

Layers of the metaverse industry

According to a research report by CITIC Securities, the metaverse industry is divided into five layers: infrastructure (computing power, cloud, etc.), digital foundations, development tools, foundational ecosystem, and user end.

Infrastructure: Computing power, cloud, etc. For instance, in decentralized rendering networks like Caduceus, rendering nodes donate idle GPU computing power to complete rendering tasks, meeting the metaverse's demand for 3D rendering.

Digital foundations: Blockchain and the internet. All decentralized metaverse projects are built upon blockchain technology.

Development tools: 3D engines and VR/AR. For example, Caduceus provides tools for creating 3D game assets/models as well as for minting, trading, and splitting NFTs. Klaytn offers open-source suites for metaverse developers.

Foundational ecosystem: Developers and applications. Metaverse public chains provide development suites to help developers build metaverse applications based on smart contract platforms. Some of these chains introduce EVM compatibility, making it easier for developers to migrate metaverse projects' smart contracts from other EVM-compatible chains.

User end: Projects built on metaverse public chains, spanning NFTs, blockchain games, entertainment, and social interaction, among others.

Use cases of the metaverse

As mentioned above, the metaverse industry covers a wide range of areas. With its transition from conceptual hype to practical application, let's explore some specific use cases of the metaverse.

The first thing worth mentioning is the garment sector. Global banking giant UBS has added the metaverse to its long-term investments. In the introduction to the "Metaverse Vision", UBS considers the metaverse a deeply immersive virtual experience that will have a widespread impact on business. They particularly mentioned media, entertainment, and garment among the industries that could use the metaverse. In recent years, sales of digital accessories in games like Fortnite have outperformed traditional clothing, prompting fashion giants to expand their presence into the metaverse. Nike sold over $185 million worth of digital sports shoes and similar products to more than 26 million visitors in Roblox's virtual world, Nikeland. The sportswear giant's digital revenue has tripled to exceed $10 billion, accounting for nearly a quarter of its total.

Another crucial area is the industrial metaverse. For example, Budweiser built a digital twin for its supply chain and manufacturing, enabling adjustments to brewing processes based on active conditions and helping avoid production bottlenecks. Similarly, Siemens created a digital twin of its factory in Nanjing before construction began, preventing costly mistakes and raising productivity by 20%. In its Industrial Metaverse program, Microsoft collaborated with Kawasaki Heavy Industries to create an AR-powered digital workspace that replicates the real world for faster maintenance and launching of new production lines. Fierce competition is also seen in automotive manufacturing. Chinese automaker Geely has notably shortened the new car development cycle by using cyber-physical systems in processes from design to development and trial production and validation. General Motors has applied for metaverse-related trademarks. Leading carmakers like BMW, Mercedes-Benz, Kia, and BYD have launched virtual showrooms and smart cabins.

Future challenges facing the metaverse

As the metaverse is still in its infancy, the industry will face two prominent challenges: technological hurdles and regulations.

From a technological perspective, the metaverse heavily relies on VR devices. This means integrating a supercomputer within a headset, which poses a significant challenge for the entire computing industry, as this novel form of computer requires extremely high image processing speed and quality. Therefore, it takes some time for the metaverse industry to achieve technological breakthroughs.

Another noteworthy challenge is regulation. For novel concepts like the metaverse, a catchy term that has gained popularity in recent years, there is substantial uncertainty about whether they should be regulated and how they should be regulated. Excessive government control risks stifling the vitality of virtual spaces, but the dangers of online violence cannot be overlooked, making regulations indispensable.

So far, most countries have yet to express their stance on metaverse regulation, despite introducing a range of encouraging policies. Particularly, the EU is likely to define the metaverse and set its boundaries under laws such as the Artificial Intelligence Act, Digital Services Act, and Digital Markets Act. According to Stephen Parkinson, a member of the UK Parliament, the Online Safety Bill applies to "anything communicated by means of an internet service," including objects or virtual avatars created by users and interactions among users within the metaverse.