One of the fundamental pillars of the Metaverse is interoperability – the seamless connection of various platforms, devices, and content. The goal is for a user to be able to transfer their avatar and digital assets from one virtual world to another. For example, if a user has purchased or created a digital asset in World X, they should be able to access these assets directly in virtual World Y through interoperability. Interoperability allows people to move freely within the Metaverse and interact with other users, regardless of the platform or device they are using. By connecting different virtual environments and social networks, it enables limitless communication and interaction, allowing users to offer boundless services or advance research seamlessly. This opens up new possibilities for creative expression, education, entertainment, and collaboration in the Metaverse.
Interoperability has long been a concept that makes sense, even before the emergence of blockchain, the Metaverse, and Web3. However, most proponents of this idea tend to underestimate the fundamental dynamics required to achieve this ambitious goal. Let’s take a closer look at the multifaceted challenges.
Technical Incompatibility Due to Proprietary Systems and Business Models
Interoperability necessitates technical and organizational adjustments that come with significant complexity in implementation. Different platforms use varying technologies, protocols, and standards, making it difficult to exchange content seamlessly and communicate between different platforms. Providing open Application Programming Interfaces (APIs) and Software Development Kits (SDKs) enables developers to access the functions and data of other platforms. This includes file formats or coding schemes for content – if these differ, it can lead to issues in content playback. Providers must be willing to open up their systems and cooperate with others to enable interoperability, or else we will see more platforms like Meta’s Oculus or HTC Vive that isolate users on specific platforms.
Regulatory Hurdles
Regulating the Metaverse can be challenging, especially when it comes to data exchange and trading digital assets. Therefore, it is essential to establish regulatory frameworks that support interoperability without compromising data privacy, security, and other critical aspects. Initiatives at the EU level, such as the European Commission’s “Virtual Worlds” initiative, are already underway. The goal is to create open, interoperable, and innovative Metaverses that can be safely and confidently used by everyone. The Commission has agreed on measures such as establishing a technical forum as a complement to multi-stakeholder internet governance bodies and adopting a structured approach to monitoring the development of virtual worlds in all industrial ecosystems, in collaboration with member states and stakeholders. [1]
Proprietary Business Models and Protectionism
Many Metaverse platforms are proprietary and pursue their own business models. This can lead to closed ecosystems that hinder interoperability. Most providers aim to quickly gain a critical mass of users and retain them. After all, network effects are nowhere more significant than in the Metaverse. Providers fear user attrition if it becomes easier for users to switch between worlds. It is in the interest of users to urge Metaverse providers to rethink their strategies and focus on differentiating themselves from the competition with unique features. Recent developments suggest that there won’t be just one “true Metaverse,” but rather people will be represented in various worlds.
Topic-Specific Content
As previously explained in earlier blog posts, there is no one true Metaverse. Instead, a multitude of providers have established their own Metaverse offerings. These worlds can differ significantly, not only in terms of graphics, level of detail, or features but also in terms of the fundamental theme of the virtual world. Whether a Metaverse mirrors our Earth, is set in outer space, or even in a fictional underwater world has significant implications for the relevance of interoperability. As mentioned at the beginning, interoperability is not just about transferring one’s own avatar but also all digital assets seamlessly between Metaverses. For example, it is questionable whether a car purchased in Metaverse A should have the same functionality in the universe of Metaverse B.
Is there hope for Interoperability?
YES! To address the above-mentioned challenges, the Swiss association OMA3, which includes leading Web3 Metaverse companies like Decentraland and The Sandbox, has committed itself. [2] True to the principle of interoperability, the consortium aims to create the necessary standards and infrastructure through their Inter-World Portaling System (IWPS) project. It is crucial that financial institutions also engage in and contribute to the realization of this ambitious initiative. Merely having a presence in different Metaverses is not enough; they should support efforts to connect these worlds. Financial institutions could play a significant role as connectors of the Metaverses.
Opportunities for the Financial Industry
Undoubtedly, financial service providers in the Metaverse would benefit from increased interoperability. Interoperability enables seamless transactions between platforms and promotes trade. It also allows institutions to have a broader presence and reach potential customers who are present in these virtual environments. Moreover, regarding digital assets, there is significant potential for financial service providers. Seamless access to digital assets across different Metaverses enhances fields like asset management and risk management. Having an overview of a customer’s entire portfolio is a fundamental requirement for providing effective added value in such services. Additionally, an interoperable environment can help minimize real risks and facilitate regulatory functions, such as money laundering prevention and fraud detection. This opens opportunities for identity verification and verification services. Banks, institutions with the highest level of trust today, are ideally positioned to provide such services and create genuine added value for the entire Metaverse.
ARE YOU CONSIDERING ENTERING THE METAVERSE MARKET?
Our experts at Horn & Company are available to discuss your individual potential and market entry strategy. Contact us today to explore your opportunities in the emerging Metaverse.
Quelle:
