Metaverse faithful see the future after the fall

With crypto in the dumps and the flop of the NFT market, skepticism is running high about the metaverse. Stocks of metaverse companies crashed this year, led down by Meta, formally Facebook.

Sebastien Borget, the co-founder and the chief operating officer of The Sandbox, pose at the company office in Gangnam, southern Seoul, on Sept 20. [PARK SANG-MOON]

With crypto in the dumps and the flop of the NFT market, skepticism is running high about the metaverse. Stocks of metaverse companies crashed this year, led down by Meta, formally Facebook.

Supporters of the technology, in which simulated worlds are generated by computer systems and people live and work in them as avatars, say that the fall is just part of the journey to the next big thing.

And they add that Korea is where it's happening.

It is a "logical step for Korea to jump into the metaverse" because of a strong game market, solid blockchain community and the nation's fast adoption of new technologies, said Sebastien Borget, co-founder and chief operating officer of The Sandbox in an interview with the Korea JoongAng Daily at The Sandbox Seoul office in southern Seoul on Sept. 20.

Borget visited Korea to attend the Upbit Developer Conference, a two-day blockchain conference held in Busan that took place last week.

The Sandbox, a subsidiary of Hong Kong-based Animoca Brands, is a decentralized blockchain game platform running in the metaverse. Users can play and create games in virtual spaces and sell their creations. They are rewarded with a token in return.

The product gained popularity through partnership with high profile artists, including Snoop Dogg and Steve Aoki, an American DJ. Celebrities hold virtual concerts and private parties in The Sandbox's metaverse and avatars inspired by them are traded on a marketplace in the form of NFTs.

The Sandbox hopes to expand the service and include Korean artists in the K-verse, a dedicated space for the Korean content in The Sandbox metaverse.

"What we're preparing for the end of the year is to announce a major neighborhood K-verse, which will bring lots of Korean culture to the metaverse," Borget said.

Virtual concerts, which will be The Sandbox's "next milestone" will be available in the K-verse, "where the importance of music will be very strong."

"Right now, to be a fan, you have to buy products from K-pop artists, like going to concerts. It's always transactional," Borget added. But in the metaverse, fans have a lot more chances "to be closer to the artists. They can visit their virtual space, co-build the space, having more of a voice into what they can do."

SM Entertainment, Cube Entertainment and CJ ENM are some of its local partners.

Borget also pointed out that local regulations and the lack of legal framework in Korea hinders the metaverse.

Below are the edited excerpts from the interview.

Q. The Sandbox partnered with a number of entertainment companies to expand K-pop to its metaverse. What synergies does The Sandbox hope to achieve from the partnership?A. Korean brands and institutions are very open to innovation. I'm not trying to recreate what we're seeing in the real world. Our goal is to create a more diverse experience that is more fun and engaging, including virtual concerts, museums, galleries and dance clubs. Fans can become the artists' virtual neighbors, visit their mansions and studios, which are practically impossible or logistically impossible in the real world. Some of the ideas from the partners are rebuilding exactly the same things that happened in a music video to metaverse, so people can walk around and be part of the music.

We work to make the metaverse become a digital nation with no frontiers, so many regions of the world can make their cultures accessible globally while appealing to locals. To make the experience more immersive, we are exploring more around how avatars can communicate feelings and display body expressions on metaverse.

Play-to-earn games, which are featured on The Sandbox, cannot be distributed in Korea because of concerns for speculation. How has that affected The Sandbox business, and how does it plan to overcome the regulatory hurdles?

First, we'd like to be consulted and work with policymakers to educate better about this case because I think there's already a misunderstanding of the definition. The Sandbox is a creator economy where people can participate by contributing to build the world and the content in the world. It's an actual craft of making 3D objects and animations. I think the options to potentially sell them on a marketplace is a way to derive revenue that is not necessarily speculative because demand for those items will be based on the actual needs.

Imagine you're a player. You're spending a lot of hard work and real money to buy virtual items in the game. You can't own or transfer them. If you stop playing, you lose everything you've earned or paid for. Isn't that unfair? This is an unfair thing that policymakers should worry more about to embrace the opening of the future of the digital economy.

Why do we think true digital ownership of any digital assets shouldn't be the rights in modern society? I believe there's nothing speculative about having the ability to own, transfer, give or sell your content.

What infrastructure or foundation do you think Korea needs to more widely promote metaverse?

I think clarifying the legal framework would encourage more entrepreneurs to position themselves in the space. Not having clear rules is harder than when you know clear rules. If there is a legal framework, you can start building and have a security of what you're building.

Offering financial rewards to users is an important part of The Sandbox in attracting players and creators. But for them to be continuously incentivized to stay on the platform, the price of Sand tokens needs to be stable. It lost around 85 percent of its value from its peak. How does The Sandbox plan to achieve that?

We never designed the Sand token to be stable. It's a currency that will fluctuate based on laws of market — supply and demand — just like any other cryptocurrencies.

When you use Sand as a currency, you don't convert it all the time because you're living in the environment. We never said earning in The Sandbox is a short-term game. What we see is a new asset class. When people hold onto it, revenue can generate over the mid-to-long term more than on a short-term basis.

You said some people quit their job in real life to become creators or players in the metaverse. If they have to wait long-term to convert Sand into fiat currency, how will that motivate them to stay on the platform?

It's definitely not easy to run an open economy. But if you look over a month or days, it's pretty stable unless there's a major crypto crash. It's almost like the euro. Why would I need to change it to the U.S. dollar every day?

We follow the same decrease of a lot of currencies, like Bitcoin that is down 70 percent. The same applies to pretty much any asset. You may have already lost money by holding onto money in the bank due to inflation.

How would you convince critics of the potential of the metaverse? The metaverse is not necessarily for gamers. It's to enlarge the population who can access different experiences. Right now, the way you're consuming media or connecting with brands and people is mostly through social media. We receive feeds of news, which we decide if we want to like or retweet or share or dislike. It's a yes or no decision that is divided into very few choices. All our social connections are basically "I like or I don't like." But it can be more than that.

What the metaverse wants to offer is to give value back to time and experience and creativity. We put the avatar in the 3D world, to be amazed, to explore and take time to see creativity. Building something that's more fun and creative on the internet — that's where the metaverse is going.

You get a chance not necessarily to be the same digital you as you are in the real world. It's also a place where you can escape from reality, like creating and imagining what you want to be in an avatar. You may be able to achieve the dream job you didn't succeed for whatever reasons in society.

What's the ultimate goal of The Sandbox?

The ultimate goal is to create a platform where users can truly own their creation and use those creations anywhere they want — whether on The Sandbox or other places. We use blockchain, so the content is on a blockchain that is not owned by us, but by users.

We want to empower the creativity of everyone and let them earn from that creativity.

BY JIN MIN-JI [jin.minji@joongang.co.kr]