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What is the Metaverse?

Today, the term Metaverse is known to so many people that it can be claimed to have reached mass public awareness. This was contributed to by the recent NFT (non-fungible tokens) boom and of course by Facebook’s rebranding to ‘Meta’.

Even though it may seem brand new, the concept has been around for a while. Science fiction is known to anticipate real-life technical and scientific development, and the Metaverse concept was no exception. The term was first introduced 30 years ago is a sci-fi novel Snow Crash by Neal Stephenson. The novel features a virtual 3D world closely intertwined with the physical reality, simulating, augmenting, and even enhancing it. Following that, the idea has repeatedly appeared in pop culture, being most vividly represented in Tron, The Matrix and Ready Player One, not to mention many others. Let’s have a closer look at what the metaverse is.

Metaverse in a nutshell

Basically, the metaverse is a digital parallel universe that exists outside (‘meta’ means ‘beyond’ ) our physical world. Just like our real universe, the metaverse encompasses (or at least is aimed to) all aspects of our lives, only in a virtual manner. This definition is what brings together all versions of the metaverse — from the most daring and idealistic, where the metaverse replicates the real world in all aspects and even has the capacity for enhanced capabilities, to more realistic that require certain equipment for bridging the physical and virtual worlds, such as motion sensors, VR (virtual reality) headsets, etc.

Some may claim that the metaverse is already here, at least in the form of human interactions and relationships, referencing games like The Sims and social media that transferred a good chunk of our lives online. Some may even argue that the existing manifestation of the metaverse extends much further, referring to certain user-owned goods (in the form of NFT’s) that despite being digital possess traditionally real-world qualities of rarity, uniqueness and therefore value, and history is referred to as evidence of the metaverse existence.

Despite these arguments and discrepancies, the fundamental idea behind the metaverse is simple — the metaverse experience is achieved by an immersive state of presence (a.k.a. telepresence), allowing a user feel existent or present in the virtual space, whether through a mix of AR and VR technologies, involvement with blockchain-based user-owned digital goods, or even getting engaged in a captivating massively multiplayer online role-playing game (MMORPG).

Getting into the Metaverse

And then one day I got in, “Tron: Legacy”.
You don’t have to literally give up your physical self to enter the metaverse as it is today. In fact, many of us are there a number of times during a day, only by using some of the everyday technologies. It can be social media offering virtualization through avatars and ‘masks’ (Twitter Spaces hangout, or Zoom virtual backgrounds and filters) or simply a MMORPG like Second Life or World of Warcraft. The latter two have demonstrated how a virtual space can be linked to the physical world through the use of digital assets like in-game weapons and clothing available for purchase for the real money. All that can make a user feel strongly immersed into the virtual world.

However, subjective perception is only a part of what makes up the virtual experience. In many ways the metaverse experience depends on our ability to replicate the human experience as closely as possible. Today, we are witnessing emerging technologies that can potentially take the digital world to a whole new level. VR headsets and motion-tracking mechanisms can help achieve an increasingly realistic state of total sensory immersion. Some innovations include VR Chat, a social platform allowing users interact in virtual rooms using 3D avatars, and a Matrix-like game SuperHot with time moving only as fast as the player.

Another interesting area of virtual experience is Augmented Reality (AR) which aims to seamlessly blend virtual and physical worlds together superimposing virtual images onto the real world picture (unlike virtual reality with a complete separation from the real world). AR lets a user go on with their real life but with element from the digital reality.

Just picture a world where you can see someone wearing virtual jacket or walking a virtual pet, yet you’d be looking at a real person. An example of innovations in this is Microsoft’s Hololens. It is an AR headset that can track our body movements along with where we’re looking and to project virtual images, allowing users to interact with the physical world through the virtual layer — all in real time.

Both AR and VR are truly exciting technologies equally important in gaining the experience necessary to form the future image of the metaverse. Nevertheless, these are only the first steps towards what the metaverse will eventually become, and it cannot be done without a full-fledged technological layer supported and maintained by decentralized infrastructure like a blockchain. This will provide both users and developers with the ability to take part in building up the metaverse. Eventually, users will be able to define the image of the metaverse, adding more social weight it and making the metaverse a more attractive place.

What’s wrong with the Metaverse today?

As we can see, the metaverse is a long way from what it will eventually become. However, the current state of the metaverse bears other aspects that slow down the development of immersive experience. The metaverse today remains in the form of centralized ownership and does not offer enough control for users nor does it offer seamless data transfer between separate instances of the metaverse. For example, if you want to sell an item from Warcraft to buy a house on Second Life, you’ll inevitably have to do that in the real physical world, which will ultimately harm the entire virtual experience.

Every existing platform is owned and governed by a separate company with their own restrictions. Simply put, the metaverse today is represented by separate instances, or meta-rooms, not connected to each other.

Meta-rooms are isolated virtual experiences; blockchains and oracles provide interconnection

In a perfect scenario, further developments of the metaverse would provide a bridging foundation for all isolated ecosystems bringing them into a single integral virtual environment, allowing for seamless interoperation of all individual parts. Such shared virtual network will eventually eliminate the discrepancies associated with different hardware and proprietary software, various geo-locations, and boundaries forced by competing parties.

Such system is going to be what we can confidently call the true metaverse, where users can have virtual identities represented by unique recognizable avatars, move through the virtual space, own things, and do all other things inherent to the real world. Currently, the work on the implementation of this idea has already begun — with the use of blockchain technology and decentralized oracles.

User-controlled Metaverse and meta-economy

In order to build a user-owned metaverse, the foundation for the virtual shared environment must provide the ability for creation of a decentralized system, and blockchain technology has two significant advantages over traditional networks — composability and transparency. The foundational infrastructure of any blockchain project, whether it is a game, decentralized finance (DeFi) or NFT art, allows for organic data transfer utilizing proven economic models to realize two most crucial metaverse properties: true ownership and interconnectivity.

True digital ownership

Currently, the use of digital goods is mostly governed by rent-based economic models. Users pay subscription fees to get access to digital goods but they never own these products, or their copies. These include online music stream services, movies, TV shows. Even the virtual identities of users belong to the governing party of a service and not to users themselves.

This is related to the lack of proper mechanisms of ownership verification of digital products, such as music or software, which can be easily replicated and distributed. However, this problem can be solved with the use of blockchain technology and NFT’s that can provide such mechanisms, ultimately enabling users perform all kinds of operations with digital goods they can do in real life — buy, sell and exchange them the same way it can be done with a physical product like a DVD.

This is a huge advantage for building feasible metaverse economy mechanisms. Digital products will no longer be attached to the service they were created in and can exist independently, even in the event of the service failure. Similarly to the real world, such product will not seize to exist if something goes wrong with the project that created it.

This marks the key difference between rented goods and owned goods and takes immersive metaverse experience to a level comparable to the real life experiences, building strong parallel between digital and physical worlds and thus embodying the vision of the true metaverse as the true independent digital reality.


While true ownership is an important property of the desired metaverse, it would be hard to achieve without interconnectivity, or interoperability. With various digital ecosystems, the metaverse needs a shared common infrastructure to interconnect these ecosystems and provide reliable and clear mechanisms for their communication.

Blockchain networks, like Ethereum, play essential role in facilitating the realization of this property. Think of a comprehensive platform where a user can take a loan using one of the DeFi projects, use these funds to generate revenue in a play-to-earn game, and finally use the revenue to acquire a digital product in the form of NFT — all under the same roof. Blockchain networks can provide the consistency that is critically required for creating unifying experiences within a coherent metaverse.

User-owned metaverse case study: Decentraland

Let’s have a look at an example of how a blockchain-based metaverse can function — Decentraland. Based on Ethereum, Decentraland represents virtual reality and can be accessed from mobile devices and computers. Decentraland lets users buy virtual land plots and interact with each other through all kinds of user-built social activities in the virtual world. This is one of the first attempts of creating blockchain-based metaverse experience, offering both true ownership and social functionality in a gamified manner powered by blockchain interoperability.

Decentraland users can create and partake in various social activities

At the moment, the functionality of Decentraland lets players own land and use it for hosting virtual events — concerts, performances, and more, taking early experiments by Second Life and VR Chat to the next level. What distinguishes Decentraland from the latter is that they are not limited to Decentraland itself when it comes to making operations with their land plots. Instead, users are able to sell their land plots to all members of Ethereum network. This brings the metaverse closer to the real life, only in a digital manner. Additionally, this makes Decentraland a part of a larger metaverse experience, extending to all Ethereum-based applications such as Axie Infinity’s play-to-earn game, Aave’s loan platform and MakerDAO, a decentralized platform featuring the DAI stablecoin.

Blockchains provide better interoperability compared to existing meta-room model, as well as higher degree of security. However, individual blockchain networks remain disconnected. This takes us further to the need for connecting individual blockchains together on our way to creating a cohesive metaverse, as well as connecting them with existing centralized platforms.

Decentralized oracle networks in the Metaverse

Blockchains help bridge the gap of interoperability and digital ownership problems, eliminating fragmentation within a single blockchain. The problem of interoperability, however, remains between different blockchains as there is no unified formal way to facilitate communication between them. This gap can be overcome with the use of secure decentralized oracles.

Decentralized oracles, like the Chainlink network, provide functionality for the oracle-powered blockchains and smart contracts to reach outside the blockchain networks and securely communicate with off-chain services and data. Basically, such oracles act as a common shared foundational layer enabling off-chain data feed and off-chain computation. With these decentralized oracle networks, major blockchains can take advantage of such metaverse-important functionality as:

  • Off-Chain Computation — off-chain transactions take place in the crypto network, but outside the blockchain. The growing popularity of the off-chain transactions comes from their simplicity, compared to blockchain transactions and lower costs. A blockchain transaction is considered valid after the change, reflecting this operation, has been recorded in the blockchain. First, the transaction must be checked and verified by the required number of participants, after which information about it is recorded in the next block and transmitted to all network participants, which makes it almost irreversible. In fact, each step associated with the transaction is recorded in the blockchain — it changes, reflecting all stages of the transaction.
  • Decentralized Data Stream — In order to fully facilitate various operations as part of the meta-economy such as lending, borrowing, buying, selling, etc., all sorts of data needs to be transferred from different networks and servers that are not directly connected to each other.
  • Cross-Chain Interoperability Protocol (CCIP) is a globally accepted standard enabling communication between different blockchain-powered projects. CCIP enables the metaverse to function as a secure multi-chain environment easily accessible by any user.

Imagine a potential future metaverse that requires Meta’s VR headset or Microsoft’s HoloLens to get in, with blockchains acting as the secure decentralized underlying infrastructure. In such a scenario, oracles can bridge the gap and provide a single secure connection point for the three technologies, facilitating value and data transfers between blockchain networks, IoT devices, and centralized applications in a secure and reliable manner. This shows how oracles can act as a trust-minimized infrastructure for blending real-world and virtual experiences, which ultimately increases the immersive metaverse experience.

The Metaverse might be closer than you think

In our fast-paced world today, it is no surprise to witness, within a span of a single human life, such a daring idea like the metaverse taking a more tangible shape and becoming a reality, even if at the early development stages.

It is hard to say how the virtual universe will eventually come to be — a Matrix-like dystopian world, a more fun gamified reality, or something we’re only yet to imagine — no one can tell. But there is definitely one huge difference between yesterday and today. We are no longer limited to just fantasizing over a sci-fi book or in front of a movie screen but we have now the opportunity to take action and start shaping our future virtual reality using actual existing technologies, aiming to create a truly user-owned decentralized and all-encompassing digital universe we like to be in.