As published in VentureBeat:
This is an exciting time in the virtual space. Even before the pandemic we’ve seen the virtual worlds of games like Roblox and Fortnite start to evolve from just gaming to become burgeoning centers for social interaction and live events. While we’re not at the Ready, Player One level yet, we are starting to see the seeds of Metaverses where rich social experiences in shared virtual 3D spaces are the norm, where commerce and peer-to-peer marketplaces thrive, providing incentives for users to shape the communities by creating and selling products and services themselves.
There is real money to be made in the Metaverse, even now, and the outlook is strong for these emerging economies.
A great example is the flourishing economy we’ve built over the last 16 years on IMVU with a creator-driven marketplace at its center. Our high-velocity economy works at scale for 7 million monthly active users who exchange 14 billion Credits via 27.5 million monthly unique transactions and that’s just where we are now. Stocked with 50 million products today, the catalog grows by 400,000 new product submissions every month and just like the real world, shoppers buy the new items to stay current in fashion, trends, and beyond.
Unlike many popular games where users pay the publisher or creator for things like a skin for their avatar, IMVU users exchange proprietary currency (Credits) for digital goods, virtual rooms, gifting, and more. Beyond the virtual marketplace, today there is also a huge amount of peer-to-peer economic activity for services and experiences that users provide to other users. For example, a dance club owner is hired by another user to create a space for others to enter, dance, and meet new friends. What’s missing is the opportunity for users to pay each other for services on the platform and allow them to create real value for it.
Until now, in order to get paid for their services, users have had to use third-party tools like PayPal or Venmo, and it can become quite tricky for them, especially if they’re working with people in different countries.
Introducing VCOIN, the first blockchain-based digital currency to be backed by an established massive user base and thriving economy, soon to be launched in the IMVU platform.
With VCOIN, paying another user for a service is easy. The ability to buy and send VCOIN to anyone on the platform is built directly into the user experience, and earners of VCOIN have a simple path to convert it to real cash for the real world — something no other Metaverse has yet to provide.
Most cryptocurrencies are risky at best with questionable founding premises or business plans. The gold standard for trust in a cryptocurrency is a SEC no-action letter, a document indicating the federal agency has evaluated the currency and given its no-enforcement blessing. The SEC has evaluated VCOIN and, because it deemed the currency as a non-security, it is safe to use and follows the regulatory guidelines. This is a super-high threshold to pass as the agency has issued only its third-ever digital currency no-action letter to VCOIN.
While we may be a virtual economy, the value in the economy is very real. We’ve always wanted a way for our Creators to get paid in a secure, stable, liquid, and universal currency that’s easy to use and convert to fiat, no matter whether their economic activity is on or off our platform. Users on other Metaverses have the same need, and we believe there’s no reason that such a currency should be limited to a single platform: Any virtual world should be able to use it.
Picture a real-world mall and imagine you’re a clothing designer who gets paid there in U.S. dollars by Macy’s, in Pesos by Bloomingdale’s, in Yen by Nordstrom’s, and so on. That would make you think twice about whether working with all of them was worth your time.
This is the exact problem VCOIN solves — uniting these experiences and allowing creators to get paid in the same digital currency, which they can easily convert to fiat, no matter whose platform they’re on.
Daren Tsui is CEO of IMVU.