James is the Managing Director of hype, the super agency Web3.

You’d be hard-pressed to name more ubiquitous buzzwords than “Web3” and “the metaverse” in 2022. You’d also be hard-pressed to find one mentioned without the other.

Web3 and the metaverse were combined and grouped into in pretty much every way: in marketing jargon, in advertising, and in news coverage. Although inaccurate, it doesn’t take much to see why the two are often conflated. Both are new technologies with nebulous definitions, both are frequently considered the future of the internet and both are huge hits with venture capitalists.

Paradoxically though, where the link between the two seems weakest is where it counts the most: technology. In fact, Matthew Ball, author of The metaverse: and how it will revolutionize everything, the de facto metaverse bible, noted in July that while Web3 could play an important role in realizing the potential of the metaverse, there is nothing holding them together. They are fundamentally two different technologies that can (and often do) work independently of each other.

Crunching the numbers

The data tells us so too. Take Decentraland, for example. In October, metaverse platform Web3 drew much derision after CoinDesk reported that only 38 “daily active” users roamed its virtual land in a span of 24 hours, a woefully low amount of traction for an ecosystem valued at $1.3K. millions. .

By comparison, Roblox, a Web 2.0 metaverse competitor valued at around $25 billion, had 57.8 million daily active users as of September 2022.

Of course, there is a catch here. The metric of 38 daily active users recorded by DappRadar and reported by CoinDesk refers to Decentraland’s on-chain activity; these are actions from users who actually interacted with the platform’s smart contract. In addition to on-chain activity, which is recorded on the blockchain, Decentraland allows users to explore their metaverse off-chain (or without interacting with the blockchain). In other words, the active user metric in question only covers people who have visited the Decentraland metaverse and leveraged its Web3 layer, not the total number of visitors to the virtual world.

Decentraland were quick to dispute the numbers. in a cheepthe organization claimed that it had amassed 56,697 monthly active users (MAUs), with a total of 1,074 users interacting with its smart contracts.

Setting the record straight, though, Decentraland inadvertently drew attention to how underutilized its Web3 layer is: only about 1.9% of its monthly active users logged activity on the chain.

things weren’t so different with The Sandbox, another alternative to the Web3 metaverse, neither. CoinDesk also noted that The Sandbox had 522 “active users” in the same time period that Decentraland’s 38 signed up. Although The Sandbox refrained from disclosing its total monthly activity on the network, it did share that it attracted 39,000 daily active users and 201,000 monthly active users in a post tweet.

Assuming that the 522 metric accurately represents your average daily on-chain activity, that still means that only about 1.3% of your users interact with your Web3 features. So even in the case of platforms looking to marry Web3 and the metaverse, technologically speaking, the two don’t seem to be that closely intertwined. Or so the numbers suggest.

In the meantime, Standard metaverse platforms continue to dominate the charts. A recent Deloitte metaverse report shows that, at 56,000 and 200,000 MAUs respectively, Decentraland and The Sandbox are light years ahead of competitors like Zepeto, Fortnite, and Roblox, clocking in at 20 million, 80 million, and 202 million MAUs respectively. Ironically, Horizon Worlds, part of Meta’s multi-million dollar investment in the metaverse, sits on the same level as The Sandbox at 200,000 MAU.

beyond numbers

But the numbers only tell one side of the story. When ad week (paywall) asked us for our opinion on advertising in the metaverse, we told them that Decentraland and The Sandbox are not the right platforms for brands looking to reach as many people as possible.

That is still true. However, the part that was not included in the piece is that there could still be value for brands to explore these platforms. If brands are targeting a specific audience, one familiar with NFTs, digital assets, and collectibles, they may find more success in the smaller but dedicated communities that Decentraland and The Sandbox have cultivated.

Netflix, for example, went in that direction with its recent promotion of the gray man Starring Ryan Gosling. So did Gucci with its Vault Land NFT-enabled metaverse experience.

The biggest photograph

The fact that few of the active users of Decentraland and The Sandbox chain record The activity does not ultimately undermine the reasons for the platforms to integrate Web3 into the metaverse. Unlike Roblox and Horizon Worlds, which rely on a closed ecosystem, Apparently, Decentraland and The Sandbox hope to set the standards for an open, interoperable metaverse that gives users and creators the ability to freely move their data, collectibles, and other assets from one platform to another.

Web3 is the layer that makes this vision possible. It ensures that trust and interoperability are built into the DNA of the metaverse. It is a guarantee against monopolistic practices that allow platform operators to impose unreasonable fees and sales cuts, such as Meta’s planned 47.5% tax on sales of virtual assets.

By opting for the road less traveled, Decentraland and The Sandbox they are helping to pave a brighter future for the internet and the metaverse for all of us. That is an admirable undertaking. Whether we will see this vision come to fruition remains to be seen.

Despite all its lofty ambitions, Web3 still has many hurdles to overcome, including slow performance and poor user experience. “We have to be realistic in that it’s a long-term plan,” Robby Yung, chief executive of metaverse investment firm and game publisher Animoca Brands, said recently. “We are building the Internet in 3D, this will probably take 10 years or more.”

But if you can address these shortcomings, Web3 can prove integral to unlocking the full potential of the metaverse, even if the two can exist without each other.

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