‘We’re already living in the Metaverse’: Yat Siu — Big Ideas – Cointelegraph Magazine

Magazine: Animoca was a successful mobile gaming company, with 10 million downloads and various apps in the top 10 on Apple’s App Store. Then you were suddenly thrown off the store in 2012. How did that change your views on Big Tech?

Yat Siu, Animoca co-founder: The fact that platforms could become as powerful as they became — the App Store, Google Play, Facebook, you name it — caught many of us by surprise. Open source had become the predominant form in which code was written, and it was kind of a wake-up call when Apple basically just decided to push the button and get rid of us.

We didn’t fully know the exact reasons, but there was no discussion, negotiation or process. Hundreds of people were potentially out of work, and millions of customers lost access to the apps they loved because of the decision of some person or some small group of people who can never be held accountable. And that, to us, was basically a shock. It’s not that we saw blockchain and decentralization as the solution back then — it’s just that we knew there was a problem.

Deplatforming users with no explanation seems very authoritarian, like having rulers but not courts and no solid laws.

Exactly. Blockchain is not only a technological solution but also, in many ways, a political-socioeconomic movement. That’s when people get into it. They don’t get into it because “Oh, look, it’s a decentralized ledger. I can have copies of everything!” No, they get into it because it means freedom. It means a kind of digital sovereignty they yearn for because they lost it during the transition to the digital world.

It took us a year and a half, or maybe even two years, to get back into the App Store. We were leading the space when we got kicked out, and then it was impossible to claw back our market standing because by then, the competition, by the grace of Apple, ended up basically dominating the space. 

But you’re not a Bitcoiner?

I had a hobby mining rig and experimented with Dogecoin just because it was fun and silly. But because it was so financial in nature, it didn’t click for me. We weren’t from Wall Street, we didn’t have that lens. But when NFTs came about with CryptoKitties, that’s when we understood, oh, this is culture. 

It was 2017, so we were pretty late. We didn’t see the light because of Bitcoin, we saw the light because of NFTs and what that could mean for ownership over virtual assets. By early to mid-2018, we were all-in on blockchain. That’s when we acquired The Sandbox and when we invested in OpenSea, Dapper Labs, WAX, Sky Mavis (Axie Infinity), and others.

So, you just invested in any project involved with NFTs or the Metaverse?

Well, there weren’t that many at the time. And you could say, this is like some crazy bet we took. But it wasn’t a bet to us. It just felt right, that this was the path to go.

I bought my very first “virtual good” in a multi-user dungeon in 1990 or 1989. So, this idea of paying money for virtual goods has been normal to me for decades. But now that you have the ability to own it and have composability on top of that, it all sort of blew our minds. 

Social media brings together people from radically different backgrounds and perspectives who would never meet in real life, and they clash. Do you think that in the Metaverse, communities will coalesce around shared values and outlooks in separate virtual geographic regions?

Coalescing around our own values is what humans do all the time, and I think the same will happen with the Metaverse. The problem with social media companies is that they’ve weaponized this effect because they put these groups together.

It wasn’t so much a problem with the communities as much as the platforms themselves. They created algorithms that, in order to maximize engagement, ultimately brought out the worst in us because they would reinforce our existing ideas and prevent new or different ideas from coming through.

And we also lost the ability to have civil discourse because we have nothing to lose and no accountability — I’m behind a platform, and I could be anonymous and free of all consequences. Now, what’s encouraging is that these detriments of social media are not necessarily true in the open Metaverse. If I own a parcel of land in The Sandbox, as an owner in that space and a stakeholder in its success, I don’t want to spoil it. 

Do you think Metaverse users will also be manipulated into engagement by an algorithm serving up outrage bait?

In the future, particularly when experimenting with DAOs and a coin for governance, those algorithms could actually be driven by the community’s goals instead of a centralized platform chasing the maximum possible engagement regardless of the social costs.

You could argue that the original construction of Facebook was as a platform to serve everyone on it. But it just ended up serving a very small group of people while everyone else was milked for data, attention, outrage, etc. What would Facebook look like if it actually served its more than 2 billion members?

The algorithms were devoid of morality or ethics because the people involved in them had one motivation: profits. That’s shareholder capitalism. With Web3, through token ownership and NFT ownership, you automatically participate in stakeholder capitalism, which is much more inclusive and representative. 

The open Metaverse requires some level of interoperability — being able to take your NFT assets from one game or website to the next, even if it’s owned by a different group. Are there any current examples where you can do that?

There are some initial case examples.

But the key thing is that the paradigm of ownership doesn’t mean that you are forced to create an API or framework that another party has to adopt. It’s up to the other party to adopt your assets in ways that make sense to them.

The fact that we own cars makes it possible to have everything from Uber or Grab to companies making baby car seats. They didn’t go to Ford and say, “Can you please adjust your car design so that my baby seat will fit?”

The baby-car-seat companies just built baby seats based on how cars were designed, not the other way around. And that’s how we see permission in the decentralized world as well.

One example is the YGG [Yield Guild Games] gaming guild.

The one where they rent out expensive Axie creatures so new players can use them to make money in the Axie Infinity game?

That is a result of the network effect in action. YGG created a business model that is almost Uber-like, based on the ownership of Axies and which adds value to the NFTs and to the gaming system in a manner that none of us imagined was feasible at the time.

I suppose another example is Bored Apes. What do you think of BAYC’s idea of handing over the intellectual property with the token? There are now platforms where you can hire out your Bored Ape for an ad or to attend a party.

Indeed, that’s why my Bored Ape #9730 was on the runway at New York Fashion Week with Vivienne Tam! Packaging commercial IP rights within an individual NFT is a more powerful way to prove ownership (and therefore enforce it) than the traditional approach of “Oh, you infringed on my rights, so please show me the contract that you signed and I’ll take you to court.”

Will the games that stick around and evolve economies eventually all join up and become “the Metaverse?”

They have the potential to do so, and in some ways, that’s already happening. That’s why we refer to the open Metaverse based on genuine digital ownership. The ownership paradigm is a bit like why monarchies inevitably transform into democracies: If they don’t, then there’s a revolution, or they simply collapse under their own weight. 

When you look at markets in Asia, especially South Korea and Japan, the most prominent Web2 game companies are already planning, have announced or are implementing Web3 strategies. This is the shape of the future, and it’s not a distant one — it’s near-term.

I was talking about the Metaverse with someone, and they asked if we’re just going to recreate the existing world there and have rich areas and poor areas. And I thought, “Yeah, probably.”

Digital slums? I don’t think that we can entirely remove inequity from our lives. Unfortunately, if you believe in capitalism, then there is going to be some degree of inequality. The critical consideration is: What’s the opportunity for someone who is on the bottom end of the spectrum to advance upward? And I think the Metaverse provides one of the best paradigms for solving this thanks to things like tokenization and play-and-earn, NFTs as a form of ownership, IP, and commercial rights management, data as equity, and so on. There are multiple pathways and opportunities for participation.

Also read: Billions and billions: How brands take blockchain from niche to normal

Our time is valuable in the sense that someone will pay us for it. And so I think the idea of universal basic equity that is derived from our time is a more sustainable concept than universal basic income, which leans heavily toward an ultra-socialist approach where it becomes an entitlement you get for doing little or nothing. But in the Metaverse, you need to actually do something for that equity, since the more you contribute and participate, the more valuable your data becomes.

The people currently working on the Metaverse appear to be mostly be Asian developers and white developers. Is there a possibility that this could lead to structural or systemic problems?

One of the things I really love about decentralization is that if a community doesn’t speak for you, you can just make your own community. The cost of making a token isn’t expensive, nor is the cost of building a community. So, if you have a community that doesn’t speak to you — because it’s very Asian, male, Caucasian or whatever — then you’re totally free to set up your own community spaces in an entirely decentralized fashion, at a relatively low cost.

If I want to build a community just for Filipinos, or for just four people in Nigeria, I can do that relatively easily.

What do you think is the time frame for the open Metaverse? What are the big events that we’re likely to see in, say, two to five years’ time, or 10 years’ time?

I think in two or three years, we will get to hundreds of millions of users playing blockchain games, largely thanks to the arrival of “AAA” quality games to blockchain, which better appeal to traditional gamers. 

Adoption and usage won’t be as dependent on initial sales, NFT drops and the financial structures that we see today in blockchain games. Instead, they will be games very much like traditional AAA games, and the blockchain layer will be there to provide ownership and other important utilities but will not be the main feature.

It’ll be where people are enjoying the game for free but owning the NFT. And then they can trade it afterward. I think we’ll hit several hundred million users in the next two or three years. We’re going to see mass adoption happening through games, but also education is an area that we’re betting on as well.

When do we get to the actual Metaverse? Do we wake up one day and all the games are interoperable and we’re all living in it?

I don’t know that all the games will be interoperable, and probably not quite in the sense that we imagine today.

I also think that the mass genesis of interoperability will probably emerge from indie game developers. The big game companies have less incentive to push interoperability because they have established monopolies and are quite happy with the status quo.

What I think we will see emerge is various different games with modest user bases in the thousands or tens of thousands of users with reasonably good economies. They won’t be billion-dollar businesses, but they will grow and thrive because their assets will also be adopted and used in other games.

Are we going to see standards developed for interoperability? 

I think there will be standards. In fact, that’s what we’re already working on, for example, through the Open Metaverse Alliance, which also includes The Sandbox, Upland, Alien Worlds, Dapper Labs and many others.

However, as I said earlier, I think the greatest way to mainstream adoption won’t come because we’ve created a standard — it will come because of ownership and freedom of composability. Someone else out there in the world is going to come up with use cases for NFTs in a manner that we couldn’t have imagined. 

Someday soon, someone is going to say, “I can do this really cool thing with your gaming assets that you never thought of,” and suddenly, it’s going to blow up.

Also read: Blockchain is as revolutionary as electricity: Big Ideas with Jason Potts

 This hour-long interview has been edited for clarity and length.