Digital Currency in the Web3 Metaverse with Orion

Ever since Facebook’s rebranding to Meta and focus on augmented reality (AR) and virtual reality (VR), the metaverse and digital currencies in Web3 have become hot topics. Since October 2021, companies and venture capitalists (VCs) have been flocking into the space, racing against each other to become a leader in what is forecasted to become a multi-trillion-dollar industry. 

With the likes of Google, Epic Games, and Samsung; Big Tech, as well as startups, have invested billions in research and development to build a viable metaverse encompassing a plethora of digital currencies.

Massive growth vs regulations

Enabled by blockchain technology, the metaverse has seen massive growth within the Web3 and digital currency space, allowing digital asset tokenization, ownership, and interoperability.

However, the blockchain has also opened the possibilities for central bank digital currency (CBDC). Central banks, in association with their respective country’s fiat currency, will have their own digital currency injected into the metaverse.

In order to better understand the implications of Orion within the metaverse, let’s look at the different technologies and factors enabling (and complicating) this new concept.

What is the metaverse in simple terms?

There are many definitions of the metaverse. A simple way to describe it would be a collection of experiences enhanced by mixed realities. Not satisfied enough? Let’s explore Matthew Ball’s definition in his book, The Metaverse and How It Will Revolutionize Everything.

“A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited amount of users with an individual sense of presence and continuity of data”.

The metaverse and Web3

While the metaverse itself is not technologically dependent on Web3, blockchain technology gives a new dimension for creators to leverage and for users to explore.

Through the novel concepts of Non-Fungible Tokens (NFTs), digital currency, and digital identities, the metaverse allows for a new iteration of the Internet to take place.

The Sandbox and NFTs

The Sandbox, for instance, is a great example of a Web3 company building a metaverse app that leverages NFTs and their own native digital money. In this game, players can create experiences and 3d-rendered assets that players can own, sell, and trade through the platform’s native token, SAND.

While tokenizing in-game assets and NFTs are great outlets for creating digital economies, liquidity can become an issue. Because NFTs are non-fungible, they tend to experience scarcity.

The importance of tokenizing virtual items with digital currency

Tokenized digital assets are a core principle of the driving force behind the metaverse’s popularity. Imagine a digital world in which the value you create is rewarded by digital currencies that you can hold, like a bank account, and use on other platforms.

The Web2 era

Until now, digital worlds were monopolized by web2 companies. If you were to play in a game, and earn rewards or even special gear due to your prowess, you would not be able to sell your achievements or in-game items for other electronic currency or physical currency, nor could you transfer them to another game.

Web2 virtual worlds tend to be siloed ecosystems. Individuals and their goods in electronic form are typically trapped, only giving meaning to in-game assets inside that specific game.

GameFi

GameFi, for instance, is a popular example of how games meet finance in digital form (explaining the term “GameFi”). In the virtual world of Decentraland, individuals can enjoy playing games, earning NFTs, moving from one digital experience to another, and even buying pieces of the world in the form of “land.”

The implications of central bank digital currencies on the metaverse

The power of Web3 relies on enabling community ownership without the control of a single authority. A central bank digital currency is a type of blockchain-based digital representation of fiat currency enforced by a central bank/governmental authority issued on a permissioned blockchain.

Against the Web3 ethos

While central bank digital currencies can allow for regulations and quick mass adoption of a common digital ledger system, the ethos of Web3 and its sense of community ownership can be at stake. For that matter, central banks and their digital versions of money will need to approach the metaverse very carefully in order for the technology to grow adequately.

Orion allows seamless integrations as well as state-of-the-art technology to enable viable connectivity to offer digital assets from any metaverse platform on one single interface.

Creating a unified metaverse experience with central bank digital currency?

In order for the metaverse to succeed, a unified virtual reality experience must be facilitated. A couple of issues plague the metaverse industry, some of which Orion can help solve.

Scattered NFTs

Firstly, in-game assets in the form of NFTs are scattered throughout different platforms as well as different NFT exchanges. This makes it hard for metaverse users to enjoy discovery and transparency over NFT trading, value, and demand.

NFTs aren’t liquid

Secondly, as each NFT is unique and non-fungible, there is a lack of liquidity in the market, making the selling of NFTs even more difficult. Unlike cryptocurrencies, where one ETH can be exchanged for another ETH interchangeably, NFTs cannot be traded that way. 

Each NFT must be listed as its own entity, and buyers must be interested in that specific NFT in order to buy it. Therefore, it can be long and tedious for sellers to even find a buyer for their NFTs.

Impending regulations

Thirdly, each metaverse usually has a coin related to its platform and respective blockchain, which can cause regulation issues with the SEC, CFTC, and other security regulation bodies.

Cross-chain bridges and central bank digital currencies make for complex infrastructures to build payment services on top of. Financial institutions need to continue to innovate to allow for electronic payments using emerging virtual currencies.

A complicated infrastructure

As an example, in order to partake in Decentraland, one must have $LAND, which is used to purchase and sell items in the game. For users to handle multiple different currencies, it can be like managing multiple bank accounts.

The different types of virtual currency, digital wallets to own, and the potential benefits one can enjoy can be tedious. It is inevitable that authorities will play a role in regulating the financial activities of the emerging financial institutions that the metaverse enables.

How Orion contributes to a better metaverse

Keeping the three issues above in mind, Orion contributes to a better metaverse by unifying fragmented marketplaces and platforms to provide seamless integration of digital currencies and assets. With aggregated liquidity, NFT and virtual currency trading become a frictionless experience.

For example, any website or platform can integrate the Orion Swap Widget to give instant access to most digital currencies, from one metaverse to the next, by tapping into the market’s deepest liquidity source via Orion’s cross-exchange liquidity aggregator.

Orion and digital currencies in the Web3 metaverse

While living in the metaverse is far from our current reality, Orion helps the ecosystem build a stronger, more unified space. By integrating platforms under a single interface, enthusiasts can enjoy deep liquidity in a more transparent metaverse that encompasses centralized and decentralized exchanges.

As the metaverse reaches mass adoption, the experience of buying, selling, and trading digital assets and blockchain-based tokens must be optimized. Orion Protocol is part of the answer to contribute to a better metaverse by consolidating assets for users to enjoy.