The global metaverse market has the potential to generate up to US$5 Trillion in value by 2030. The recent rebranding of Facebook to Meta and growing involvement by fashion houses like Gucci and Balenciaga has led to “Metaverse” becoming a buzzword and dominating the news over the past year.
The Metaverse is generally defined as a network of immersive virtual worlds where people can work, interact socially and enjoy various experiences in digital environments that resemble the real world. Think of it as a giant video game or social platform where you can create an avatar, explore virtual spaces, socialize with other people, play games, attend events, and even buy and sell virtual goods and services.
Currently, the metaverse is quite siloed, with different virtual worlds or platforms operating independently of each other. For example, if you create an avatar in one metaverse platform, you may not be able to use that same avatar in another platform, and you may have to start over from scratch. As the metaverse continues to expand, there will be a greater need for more interoperability between these virtual worlds so that users can seamlessly transfer their virtual assets from one world to another.
In the panel below, our speakers share their views on how oracles will eventually be the bridge between all virtual worlds.
Before diving into the panel discussion, here are some significant concepts to note.
Oracles And The Metaverse
The term ‘Metaverse’ was coined by Neal Stephenson in 1992 to describe a virtual world that closely simulated reality. Since then, the Metaverse has been associated with gaming and entertainment. However, recent advancements in virtual and augmented reality have changed this notion, and now the concept of the metaverse has the potential to impact several other real-world sectors, including:
Education: Virtual classrooms and online learning tools could become more interactive and engaging within the metaverse, offering students new ways to learn and collaborate with each other.
Commerce: The metaverse could enable new forms of e-commerce, such as virtual storefronts or virtual marketplaces for buying and selling digital goods and services.
Real estate: Virtual real estate could become a new asset class, with people buying and selling virtual land, buildings, and other digital properties within the metaverse.
Social interactions: The metaverse could provide new ways for people to connect and socialize with each other, from virtual parties to online dating. These are just a few examples of how the metaverse could impact different sectors in the real world. As the metaverse continues to evolve, we are likely to see new use cases emerge as well.
Undoubtedly, the Metaverse has immense potential, but there’s still something missing. With the rise of decentralised technologies and oracle networks, a metaverse economy that’s trustless and fully interoperable isn’t far behind. Oracles are third-party services that verify real-world data on the blockchain. They also allow different blockchain networks to communicate with each other by exchanging data. In the context of the metaverse, oracles can help facilitate interoperability between different virtual worlds or platforms.
With the integration of oracles, users in the Metaverse will enjoy greater connectivity between previously siloed virtual worlds. Virtual assets may be migrated from one world to another and traded in various ways. Avatar identities can be integrated across several different platforms. Oracles can also help enable cross-platform transactions, such as buying and selling virtual assets or currency.
By connecting different blockchain networks, oracles can ensure that transactions are secure, transparent, and consistent across different platforms. Overall, oracles can play a critical role in enabling interoperability in the metaverse, helping to create a more seamless and connected virtual world.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine is a piece of software which executes all smart contracts and transactions on the Ethereum blockchain. It is often described as a virtual computer that sits on top of Ethereum’s hardware and node network layer.
The EVM is Turing-complete, allowing developers to easily create custom smart contracts and decentralised applications in the Solidity programming language. In addition, smart contracts deployed on EVM-compatible chains like Polygon or Avalanche are recognised by Ethereum nodes, and developers can seamlessly transfer their dApps or tokens from Ethereum to these chains.
Primitives are also referred to as cryptographic primitives, and they are the basic building blocks for securing data. Primitives are essential building blocks for creating secure cryptographic systems and protocols.
Primitives can include:
Hash functions: Algorithms that take input data of any size and produce a fixed-size output called a hash. Hash functions are commonly used in blockchain technology to ensure data integrity and to provide a way to securely store passwords.
Symmetric key encryption: This is a type of encryption where the same key is used for both encryption and decryption. Symmetric key encryption is often used for securing data in transit, such as when sending data over the internet.
Public key encryption: This is a type of encryption where two keys are used: one for encryption and one for decryption. The public key can be shared with anyone, while the private key is kept secret. Public key encryption is commonly used in digital signatures and secure communication protocols.
Digital signatures: These are cryptographic protocols used to verify the authenticity and integrity of digital documents or transactions. Digital signatures use a combination of public key encryption and hash functions to ensure that a document or transaction has not been tampered with.
Scaling Solutions And Rollups
Scaling solutions refer to the methods implemented on Layer 1 blockchains, like Ethereum and Bitcoin, to improve transaction processing speed. These methods include on-chain scaling, such as sharding or layer 2 scaling, such as rollups and state channels.
Rollups are layer 2 protocols which process transactions separately from the main network and then batch them to Layer 1, where consensus is reached. There are two types, namely optimistic and Zero-Knowledge rollups, which help improve speed and lower cost. The ultimate goal of these solutions is to improve network scalability without sacrificing security or decentralisation. This article gives a detailed explanation of the different scaling solutions.
Consensus mechanisms refer to the protocols or algorithms which allow a network of nodes to agree on the state of a blockchain. These algorithms ensure the integrity of the network and protect it against Sybil attacks. The most popular consensus mechanisms are Proof-of-Work (PoW), based on computational power exhausted and Proof-of-Stake (PoS), which depends on the amount of cryptocurrency held. Other examples of consensus mechanisms include Delegated Proof-of-Stake and Proof of Authority.
Permissionless Bridges VS Oracles
Permissionless bridges are also referred to as trustless or cross-chain bridges. They connect two separate blockchain networks, allowing them to communicate and exchange data and assets. Bridges create interoperability between otherwise siloed networks without affecting their unique protocols or security models.
The main difference between blockchain bridges and oracle networks is that bridges connect different chains while oracles connect on-chain networks to real-world data. Both bridges increase functionalities for users on the blockchain by providing access to off-chain or non-native data and assets.
Connor Martin, Protocol Lead, Medallion (Ex-Uniswap)
Connor Martin has over six years of experience in the blockchain industry. In 2020, he began working at Uniswap Labs as an Integrations, Partnerships & Research lead. His work included the development of Uniswap’s V3 oracle library. He also worked at Zerion as a Smart Contract Developer. Connor is now Protocol Lead at Medallion, a music-focused crypto startup.
Connor Martin Twitter
Rikard Hjort, Sr Formal Verification Engineer, Runtime Verification
Rikard Hjort is researching formal methods for developing high-assurance smart contracts for blockchains. He worked on formalizing WebAssembly in K, and now uses KWasm to verify smart contracts written in WebAssembly. He has an M.Sc. in Computer Science from the Chalmers University of Technology, Sweden. He was an intern at Google in 2016 and 2017, and studied at the University of Tokyo in 2017-2018 where he combined his research on blockchains with studying coercion-resistant voting protocols.
Runtime Verification Website
Rikard Hjort Twitter
Alexandra Dinh, Head of Marketing, Blockrocket
At the time of recording, Alexandra was Head of Marketing at Blockrocket. As the Head of Marketing, Alexandra’s job was to spread the word about Blockrocket and their portfolio companies in the Blockchain community. She is now a Startup Mentor at Techstars and EY Startup Academy.
Alexandra Dinh Twitter
Paul Claudius, Co-founder, DIA
Paul is a serial entrepreneur and crypto investor. Previously, he was Director Europe of the nu3 group based in Berlin, transforming the multi-million e-commerce business into a vertically integrated brand. Paul started his professional career as part of BNP Paribas Corporate Development in New York City and AXA Private Equity in Frankfurt am Main. Paul has advised and invested in multiple start-ups in health tech, IOT and e-commerce. At DIA, he manages the business development and the strategic partnerships.
Paul Claudius Twitter