Digital identity in the Metaverse will be represented by avatars with utility

The Metaverse is poised to become tech’s next trillion-dollar opportunity, as an increasing number of companies are showing interest in immersive virtual spaces that will allow consumers to go beyond what’s possible in real life. This was highlighted in a recent report from CB Insights, which found that the Metaverse will disrupt at least 13 leading industries including fashion, retail, gaming, education and more. 

While notable, various metaverse environments are still underway. For example, tech giant Microsoft announced on May 24 the creation of an “industrial metaverse,” which will allow workers to wear augmented reality headsets to manage supply chains. On the other hand, venture capital firm Andreessen Horowitz (a16z) believes that gaming infrastructure and technologies will be “key building blocks of the Metaverse.”

Utility is key

As such, it remains unclear which type of metaverse ecosystem will resonate the most with consumers. Given recent developments, however, it appears certain that avatars in the form of nonfungible tokens (NFTs) will play a critical role in the Metaverse, serving as a user’s digital identity within virtual spaces.

For instance, Sebastien Borget, co-founder and chief operating officer of The Sandbox — a blockchain-based metaverse project — told Cointelegraph that avatars are the new representation of a user’s identity in the Metaverse:

“By leveraging avatars, anyone can express themselves digitally in ways that weren’t possible before. Moreover, truly owning your identity and being able to carry it through an NFT across multiple decentralized applications and virtual worlds is one very concrete and easily understandable example by mainstream audiences.”

Borget added that avatars in the Metaverse are capable of representing a user’s different moods, tastes and appearances. “Avatars ultimately shape how we interact within the Metaverse,” he said.

To put this in perspective, Borget shared that The Sandbox plans to create Elvis Presley avatars to be used within their metaverse ecosystem, which would allow millions of users to “transform” into Elvis Presley.

Borget mentioned that Elvis avatars will transport fans through a virtual time capsule to complete entertaining tasks. “Users will be able to advance as a Memphis Mafia member in The Sandbox Metaverse,” he said. Borget believes that such a feature could be quite entertaining, as the Memphis Mafia was the nickname given by the media to a group of Elvis Presley’s friends, associates and employees who accompanied and protected Elvis throughout his career.

David Porte, creative director for Run it Wild, further told Cointelegraph that the studio’s collection of 5,000 unique Elvis avatars will be able to interact with all other avatars in The Sandbox.

While entertaining, these features — also known as an avatar’s utility — are one of the most important elements for ensuring digital identity within a metaverse ecosystem. For instance, Porte remarked that Run it Wild’s ultimate goal through this specific project is to establish a virtual meeting place for Elvis fan culture by using Web3 rails, like utility, to transcend boundaries.

Shedding light on this, Aaron McDonald, co-founder of FLUF World — a 3D Metaverse ecosystem — told Cointelegraph that while avatars visually engage a broader community in using Web3 functionalities, utility is what gives purpose to a user’s character. “Utility helps users participate in the economy of the Metaverse, which is important since Web3 is about community ownership and community value creation,” he said.

For example, McDonald pointed out that each character within the FLUF ecosystem has the ability to be its owner’s avatar, serving as their representative in the Metaverse, with a unique purpose and functionality. McDonald explained that FLUFs are the apex avatar. “They are the keys to the ecosystem — not only do they act like a pass for much of the value we create in the ecosystem, but they also have breeding functionality to help create the starting characters in FLUF World.” McDonald added that Party Bears have a focus on music — a feature he believes will be a primary part of the early metaverse — while Seekers are avatars that are keys to the decentralized communications network.

Additionally, McDonald pointed out that “thingies” are avatars within the FLUF ecosystem that are backed by artificial intelligence, or AI, capabilities. “Using the power of our sister company, Altered State Machine’s AI protocol, each avatar can have a ‘brain’ aimed at a specific function or functions,” he explained. Erin Zink, head of strategy at Altered State Machine (ASM), told Cointelegraph that the company is introducing diversity and randomness to the Metaverse through AI-powered avatars. “These avatars have different strengths and weaknesses, are unpredictable and unique,” she said. Zink elaborated that ASM’s AI agents have two components:

“One is a visual representation of the AI, like a Bored Ape Yacht club NFT, or 3D avatars in FLUF World, or even a chatbot on a website. But, this is just the aesthetics. The other half of the agent is the Brain. Brain NFTs are capable of learning and evolving and are interoperable across different forms and worlds.”

In order to demonstrate how Brains work, Zink explained that ASM recently launched Artificial Intelligence Football Association NFTs, which consist of 40,000 3D customizable soccer characters. According to Zink, these avatars will compete in teams of four in ASM’s forthcoming decentralized play-and-earn soccer game called AIFA. “Combine each of your AIFA all-stars with an ASM Brain and create teams of four to play. You can train them and rise the ranks to become the global champion,” she said. Zink added that ASM plans to soon launch a boxing game called “The Next Legends” that will also use AI-powered characters.

The future of digital identity in the Metaverse

While it’s difficult to fully determine how metaverse environments will evolve, industry experts believe that avatars and utility are key elements for social interactions and identity moving forward.

Dorian Johannink, co-founder of Seekers and Sylo — creators of the 3D animated NFT robots that appear in FLUF World — told Cointelegraph that as NFTs move beyond the JPEG phase, it will be essential to provide more ways to allow users to engage with assets in the Metaverse: “Character avatars are a jump off point, but in order to develop long term engagement these assets and environments need to continue to provide deeper unique functionalities that help immerse and provide functional benefits to holders.”

With this in mind, Borget shared that The Sandbox is working actively to enable more collections of avatar NFTs to come to life in its metaverse, like Bored Ape Yacht Club, for instance. The Sandbox’s official Twitter account sent a tweet out on March 27 referencing this. “We would, of course, love to see 3D voxelized versions of every 2D collection. And, there are certain collections such as the upcoming People of Crypto that will build utility in the Avatars themselves right at the drop. In this case, owners will be able to join Metapride, the first Metaverse Pride Parade,” Borget remarked.

While this may soon be the case, there are challenges that may hamper development. For example, Borget touched upon the difficulties of transforming 2D NFT collections into interactive avatars, noting that the aesthetics of voxels requires talent and creativity. Moreover, James Dewhirst, co-founder of Dinodawg Kingdom — an NFT avatar project built on the Solana Network — told Cointelegraph that projects cannot yet build a universal avatar model that can be used across all platforms:

“In order for us to offer different utilities, we need to ensure our Dinodawgs can work equally well on Unreal Engine as they do on Unity, for example. This is a bespoke and highly intricate process, and we need to work closely with each partner to ensure our avatars can operate seamlessly on their platforms.”

Echoing this, Nick Rose, founder of Ethernity and CEO of Ethernal Labs — a creative studio for NFTs — told Cointelegraph that currently, the biggest challenge is that varying metaverses are not interoperable:

“If one takes a 60,000 foot overview of the Metaverse ecosystem today, it certainly doesn’t look like the world’s globe with various continents interconnected via water. Instead, it’s a corrugated patchwork of siloed worlds building up their own communities.”