You might have heard feverish talk over the past few years of a blossoming “metaverse,” apparently encompassing everything from video games to digital assets to this blessed life itself. Few can pin down a concrete definition, perhaps because few know what it really is—and it’s not entirely clear it is any singular, coherent thing. 

Nevertheless, as a concept the “metaverse” has drawn billions of dollars in investment and widespread excitement—plus a not-inconsiderable amount of criticism. It’s worth delving into the broad strokes of what it could be and how it might intertwine with the world of crypto. 

What Are the Origins of the Metaverse?

The “metaverse” is a catchall term to describe a loosely-connected world of virtual experiences, many of which are bolstered by Web3. Brands like Epic Games and Gucci have invested heavily in the space in an attempt to meet the consumer of tomorrow where they’re at—right at home, locked into their computers.

There are countless definitions of the word ‘metaverse’—the term itself comes from Neal Stephenson’s 1992 sci-fi novel “Snow Crash” —but the definition best known today was crafted in an essay by venture capitalist (VC) Matthew Ball in January 2020.

Ball envisioned a type of online world that is so convincing as to be indistinguishable from reality. You could spend your whole life there, strapped into the mainframe with a high-quality VR headset or a powerful gaming rig.

Ball’s metaverse is “persistent,” which in the words of the spherical VC means that it never “resets” or “pauses” or “ends”—it just continues indefinitely. Its servers would be capacious enough to house the whole world without slowing down. 

Crucially—and here is where the Web3 stuff comes in—Ball’s metaverse houses a fully functioning economy from which actual, meaningful living could be undertaken. This virtual world would therefore be filled with digital artifacts. 

And, unlike games like World of Warcraft or Second Life, these digital objects would not be constrained to a single world. Instead, they are interoperable. “Your Counter-Strike gun skin, for example, could also be used to decorate a gun in Fortnite, or be gifted to a friend on/through Facebook,” envisions our hero.

The Metaverse and Crypto

Ball’s definition of the metaverse is useful when understanding its relevance to the crypto world, where innumerable brands and tokens have hitched their digital wagons to the craze. Non-fungible token (NFT) gaming collectives like Gala Games and Axie Infinity have launched highly lucrative virtual worlds that, like regular video games, gesture at the immersion promised by an all-encompassing parallel virtual world. 

But remember that crypto is not crucial to the metaverse; it is just one way of realizing its ambitions. Mark Zuckerberg’s company, Meta, is similarly devoted to the metaverse (much to the disappointment of many of its shareholders) but announced in early 2023 that it would scrap its NFT work for Facebook and Instagram. 

Of relevance to the metaverse is the crypto-friendly concept of decentralization. Cryptocurrencies are digital assets that run on blockchains. Nobody really controls the blockchain; meaningful coordination is too difficult and so the network just…runs, often without any guiding authority. It’s not possible to limit how a token is used or to which protocol it travels (with some minor caveats). 

That feature makes crypto useful for the metaverse. Consider, for a second, a Bored Ape Yacht Club NFT. While it lives alone as a JPEG on Ethereum, another smart contract could grant a holder the right to, for instance, wear an in-game costume that bears resemblance to their ape in one virtual world, and access an exclusive nightclub in another.

The high valuations for these digital-only assets clearly satisfy—at least when the financial winds blow the right way—Ball’s criteria for a fully-functioning virtual economy. 

Examples of Prominent Crypto Metaverses 

The Sandbox

Previously a popular non-crypto game, The Sandbox was purchased by metaverse VC titan Animoca Brands in 2018 and was transformed into one of the biggest crypto metaverse platforms, its market capitalization once valued at over $1 billion. It’s kind of like Minecraft (players can build whatever they fancy), kind of like Second Life (players are encouraged to lead their own virtual lives), and kind of like Garry’s Mod (players can build their own miniature games within the Sandbox ecosystem).

How successful is The Sandbox? One problem is it’s very hard to tell how many users the platform boasts, but some data suggests it has dwindled from a height of about 4,000 users a day to around 500. (The Sandbox itself has disputed this and claims a higher count.)


Decentraland was doing the rounds in 2019, well before the metaverse gained widespread traction as a concept. As with The Sandbox, Decentraland offers vast tracts of “virtual real estate”—rendered in NFT form—that players can purchase and build upon. 

Whereas The Sandbox primarily facilitates gaming, Decentraland emphasizes using purchased land to build a kind of virtual, economically cohesive hub of fashion shows, virtual concert venues, and NFT galleries. The game attracted controversy for artificially limiting the amount of virtual space it offered, with many plots going to big brands like Coca-Cola, Starbucks, Sotheby’s, and Adidas, with prices as high as $2.4 million

As with The Sandbox, Decentraland hemorrhaged users as the crypto mania faded, if it ever even had many in the first place. It is, again, hard to count exactly how many people actually play the game—as opposed to those who have simply registered accounts—but one estimate at the end of 2022 puts it at around 800 daily users. Another estimate, however, suggested a mere 38 daily users.

Teething Pains

As seen with the examples above, a major issue is that many of the metaverses on offer are patchy and scarcely used.

The native token of The Sandbox, one of the most commonly touted metaverses, has a market cap of close to $1 billion as of this writing, and in-game plots of land sell for over $1,000. Clearly, Ball’s financial criteria are satisfied. But one step inside The Sandbox’s glitchy in-game world is enough to conclude that it does not satisfy the criteria for the kind of transcendent hyperreality dreamed about in Ball’s essay, and certainly not sketched by Stephenson in his novel. Nor is the Ethereum blockchain on which it runs capable of supporting the entire world. Player counts in the mere double digits further hammer the nail in the coffin.

Other non-crypto brands that have attempted to make forays into the metaverse have faced fraught opposition from users who don’t want to see their favorite games further commercialized. The Pokemon Company International, for instance, attracted criticism over plans for a Pokemon metaverse. Microsoft, meanwhile, scrapped its own metaverse plans after the idea simply appeared less profitable. 

Who Is Invested?

Mapping out the crypto-metaverse is a difficult task, mostly because the definition is not agreed upon by so many. But Index Coop’s Metaverse Index token (MVI), which tracks the worth of top metaverse tokens, does a good enough job at tackling the impossible. It lists top brands—like Gala, Enjin, Ethereum Name Service, and Decentraland—as pivotal to the metaverse. 

Perhaps more notable is MVI’s price, which has sagged by 98% since its all-time high in November 2021, when Facebook rebranded to Meta and promised to tread fresh ground in this new virtual world. 

Future of the Metaverse 

Evidently, the Metaverse remains a long way off from any semblance of full adoption, but it nevertheless still captures the attention of huge companies like Facebook’s owner Meta (it’s in the name!), which continues to tout its own metaverse, albeit in reduced form. So, if someone asks you what the metaverse is, for now, point them to Matthew Ball’s navel-gazing essay or Neal Stephenson’s fantasy novel. Consider the modern attempts of a metaverse as tech demos, if you’re charitable, but nothing that holds much weight just yet.