Disclaimer for degens: The odds below are for entertainment purposes only and no such market (currently) exists.
It’s no secret that Meta is all-in on the metaverse. The name change, the acceleration of VR development, the billions in pledged developer funding, the new vision statement – there’s no turning back. While Zucc’s keynote answered some burning questions about the shift, it also raised a few new ones around infrastructure and core values:
- Is Meta’s idea of the metaverse truly “open”?
- Will blockchain tech underpin it all?
- If so, will it be an existing chain or a new proprietary one?
- If it’s not “open”, are we doomed?
This wouldn’t have been a point of discussion had it not been for Meta’s announcement the other day. They want a slice of the NFT pie – although there’s been no explicit mention of crypto or blockchains. Based on this, we can gather that either they haven’t decided on an approach, or they know their decision will outrage maxis & Web3 enthusiasts.
What’s the blockchain trilemma?
Coined by Vitalik, it’s the trade-off between a network’s level of decentralisation, scalability, and security. When we try to solve for one factor, it comes at the expense of another.
For example, Ethereum L1 excels in decentralisation and security, but scales dismally (pending L2 scaling solutions). Solana on the other hand, can handle magnitudes higher throughput than Ethereum but is far less decentralised & secure. All three factors exist on a spectrum, and every network out there has tried to find the perfect balance with varying levels of success.
How does this apply to the metaverse?
We want an open metaverse.
Web3 philosophy is grounded in removing control from centralised entities (like Meta) and putting it in the hands of users & creators. If we want to build a truly open, interoperable and fair metaverse, blockchain technology needs to be the arbiter. This doesn’t mean digital anarchy, but more so that users aren’t forced to participate on one particular platform in order to retain their data.
If Zucc agrees with this philosophy, then he’ll be facing the same trilemma as everyone else.
If he doesn’t, his options are pretty clear.
So what are Zucc’s options?
This isn’t an exhaustive list, but should hopefully cover most possible outcomes.
Option 1: Build on Ethereum L1
Nothing is impossible, but this would be fairly close to it.
High gas fees and low throughput would make for a horrible UX and leave no room for scale.
Option 2: Build on another existing L1
Not completely farfetched.
If Meta partners with or acquires an existing project, they’d be able to skip a lot of the tough R&D groundwork and start building products ASAP. Algorand is probably the most likely option if so, and I wouldn’t be surprised if the previous partnership between Algorand and Novi becomes something more tangible.
Option 3: Create a new L1 blockchain
Slightly more likely.
Options 1 & 2 require Meta to give up an element of control. I find it hard to imagine that Zucc would be happy with that, especially given the entire company’s future is based on this new vision.
With their own L1, it’ll mean full control over the tokenomics. Meta can make sure they can control the distribution of the native token and build an ecosystem the way it wants to. Perhaps Meta users become pseudo node operators and acquire tokens for using Meta products? No doubt that they’re looking to leverage their existing user base to create a brand new wallet experience – something that new web3 startups don’t have the luxury of.
If Meta doesn’t build something from scratch, I feel like the most likely scenario here is probably a fork of Solana. In terms of scalability, this option would allow them to keep things fairly centralised and throughput extremely high.
Option 4: Create a new L2 on Ethereum
If we were in 2023, this would feel like a no-brainer.
Ethereum L2 scaling solutions are still in their early stages and have plenty more room to improve. The main risk here is timing. Either Zucc has been frontrunning the development of ZK proofs and will shock the world with an incredibly polished solution – or Meta runs the risk of rushing to adopt a fledgling technology and build a poor user experience.
ZK Rollups would allow Meta to combine the power of Ethereum’s security with the control over their own L2 token and infrastructure. Easy onboarding processes, and easy integration with existing assets & protocols.
Option 5: No blockchain at all
This is what prompted the idea for this article in the first place.
What if Meta builds a fully centralised, mutable ecosystem that sits purely on their servers as it does currently? No blockchain, no distributed ledger tech.
They have proven they can scale, with billions of daily users of all their products – so slapping on a layer of “digital assets” will provide a massive chunk of the world the experience of digital assets. The trade off is interoperability, but if Meta’s pseudo-NFTs can solve the UX issue we currently have with digital asset trading, then most users won’t care what’s underneath.
Of all the options, this allows Meta to provide the most seamless experience for users – most of which don’t care about decentralisation or interoperability. If artists and influencers can buy, sell and create digital assets for their communities, they will want the easiest way of doing so. Seeing as most time spent on the Internet involves a Meta app of some sort, this will please the crowds in the meantime.
Who actually knows
Either way, the next 1-2 years will be interesting.
Will Meta rush into the market and start building on immature infrastructure? Or maybe focus on building a neutral, social protocol that powers other social networks? Or completely shift to focusing on hardware before anyone else really gets a chance?
Who knows. Let the giga-brains work that out.
The rest of us just want monke pictures.