July 13, 2022

Metaverse Highlights: Week of July 13, 2022

This week, the crypto crash continues to threaten the credibility of the ecosystem – causing various actors to ask for reform. As Miami’s cryptocurrency collapses and the founders of a bankrupt crypto hedge fund go missing, Nobel prize-winning economist Paul Krugman argues that crypto is in urgent need of regulations. Meanwhile, the Metaverse continues to expand its reach: Shanghai announces a $1.5B Metaverse development fund, Samsung doubles down on Metaverse-focused research, and venture capitalist Matthew Ball publishes a new book presenting the Metaverse as the inescapable future of the internet. While the crypto world faces important challenges, the ecosystem as a whole remains on the rise. 

Miami, the city that decided to bet on cryptocurrencies and create its own coin, is struggling amidst crypto crash.

  • Miami has positioned itself as the country’s cryptocurrency paradise. Mayor Francis X. Suarez repeatedly emphasizes his crypto bona fides, from taking his salary in Bitcoin to calling for the United States to incorporate blockchain technology into every level of government at a recent Bitcoin convention in Miami. 
  • The centerpiece of this effort is MiamiCoin, a cryptocurrency that the city has described as—deep breath—“programmable city-based tokens that unlock a new community-driven revenue stream for local governments while bringing collaborative technology to its citizens and ecosystem of stakeholders.”
  • But MiamiCoin has lost nearly 90 percent of its value since launching in early August and was trading for $0.00071 as of this writing. In other words, Miami can be seen as having left crypto fans holding the bag. Damning reporting by Quartz also turned up emails that demonstrate a possible breach of federal regulations; in one missive, a CityCoins representative told Suarez’s chief of staff that the mayor might have tripped “a few regulatory wires.” Third, there are concerns over the anonymity of the users and the possibility that criminals might be laundering money while Miami profits.

Founders of bankrupt crypto hedge fund 3AC go missing as investors try to recoup assets.

  • The co-founders of failed crypto hedge fund Three Arrows Capital appear to be on the run from creditors, according to court documents recently filed in New York.
  • Three Arrows, also known as 3AC, managed about $10 billion in assets as recently as March. On July 1, the firm filed for Chapter 15 bankruptcy protection from U.S. creditors in the Southern District of New York, after a plunge in cryptocurrencies and the collapse of the terraUSD (UST) stablecoin project wiped out its assets.
  • Lawyers representing the creditors say the physical whereabouts of Zhu Su and Kyle Davies, who started Three Arrows in 2012, are “currently unknown,” ahead of a hearing that is scheduled for 9 a.m. ET on Tuesday to discuss next steps in the liquidation process. The documents, filed Friday evening, also allege that the founders have not yet begun to cooperate with the liquidation process “in any meaningful manner.”

In the New York Times, Paul Krugman argues that crypto is in urgent need of regulations.

  • When the Federal Reserve speaks, it speaks in Fedspeak. So dry technical language and euphemisms are usually the way to go. Given this reality, the bluntness of a recent speech on crypto regulation by Lael Brainard, the Fed vice chair, is almost shocking.
  • Brainard didn’t go as far as Jim Chanos, the famous short-seller, who called crypto a “predatory junkyard.” But she came close. The very first heading in her remarks was, “Distinguishing Responsible Innovation From Regulatory Evasion,” and she strongly suggested that much of the crypto universe is driven by the latter. 
  • Traditional banking is regulated for a reason; crypto, in bypassing these regulations, she said, has created an environment subject to bank runs, not to mention “theft, hacks and ransom attacks” — plus “money laundering and financing of terrorism.”
  • One way to read Brainard’s speech is that she was saying that the crypto crash offers an opportunity — a moment in which effective regulation has become politically possible. And she urges us to take advantage of this moment, before crypto stops being a mere casino and becomes a threat to financial stability.

Raghu Ravinutala, CEO and co-founder of conversational AI platform Yellow.ai, argues that the Metaverse represents the future of virtual interactions.

  • After 27 years since the commercialization of the internet, 5 billion people have an online presence today. The first two phases of the Web—Web 1.0 and 2.0—were relatively staid compared to what’s coming. Today, we’re on the threshold of Web3 and the metaverse—internet environments where transactions are logged on the blockchain and powered by AI.
  • By 2026, Web3 technologies—such as digital twins, smart spaces, virtual and augmented reality, and advanced virtual assistants—will transform how people interact with the world. In fact, by then, 30% of the organizations in the world will have products and services ready for the metaverse.
  • Big Tech experts predict the metaverse to become the successor to mobile, making customer service virtual-first. If we consider how mobile messaging apps have developed as a go-to channel for customer care, we can see how conversational AI will only become more important, even when it comes to enhancing employee experiences.

In the Guardian, Alex Hern interviews venture capitalist Matthew Ball’s new book, which presents the Metaverse as the future of the Internet.

  • Matthew Ball first wrote about the metaverse in 2018 and his essays have become essential reading for entrepreneurs and tech watchers who are attempting to understand or profit from the network Mark Zuckerberg and many others are anticipating will supersede the internet. Ball is former head of strategy at Amazon Studios and his first book, The Metaverse: How It Will Revolutionize Everything, is published later in July.
  • Asked about the real world problems that the metaverse solves, Ball said: ““In many cases, if not nearly all, having a 3D immersive environment is a more intuitive and productive way to communicate information and ideas. Humans did not evolve for thousands of years to touch 2D interfaces.”

June Wan published an interview with Samsung CMO Michelle Crossan-Matos about the company's evolution in the metaverse.

  • Since its inception, the Korean electronics company has thrived in the consumer and enterprise spaces, with 72% of U.S. homes having one or more of its products. Interbrand currently ranks Samsung fifth-highest in terms of brand value, right behind Google. That's not too shabby for a company that originated as a grocery store.
  • In its pursuit of greater brand awareness, Samsung has spent the past six months testing the digital waters of the metaverse, virtual platforms that more and more companies are seeing growth opportunities in. For a deep dive into the company's newfound frontier, I spoke with Michelle Crossan-Matos, the Chief Marketing Officer at Samsung Electronics America.
  • Crossan-Matos said: “Our first venture into the metaverse was Samsung 837X, a virtual experience that replicated Samsung's flagship office in New York City. Beyond giving the youth that inspirational feeling of being on the streets of NYC, I wanted to create a place where they could learn about the innovations and goodwill in technology. That was the reason why we pursued the metaverse, to be honest. It gave this building (Samsung 837) a chance to be in every kid's bedroom.”

In Cointelegraph, Shiraz Jagati argues that the Metaverse can revolutionize the fashion industry.

  • As per a recent study, clothing existing solely in the digital world was found to be way more environmentally friendly than its physical counterpart, with the former emitting 97% less CO2 and consuming approximately 3,300 liters of water less per item. Not only that, but there is also data to suggest that by replacing physical samples with digital ones during a company’s design and development phases, it is possible to reduce a brand’s carbon footprint by a whopping 30%.
  • The use of digital clothing can be highly useful during the various steps preceding the actual physical production of a garment. For example, these virtual items can be used for modeling, sampling and marketing before their physical iterations are sent into production, thus greatly minimizing the overall environmental impact of the entire lifecycle of a fashion item.
  • When it comes to the sales side of things, digital models of clothes can help alleviate problems associated with overproduction, something that is widely considered to be a major roadblock within today’s fashion industry.

In Wired, Katherine Cross argues that the Metaverse needs to save itself by enshrining individual rights and rejecting crypto.

  • The metaverse in its current form resembles that early internet in a number of crucial ways: relative freedom, cellular communities devoted to niche interests, the ability to remain anonymous, platforms being multilayered rather than flat and conformity-inducing.
  • Of course, there’s an ugly reality to that time period as well. As early as 1995, media scholar Lisa Nakamura was warning that utopian dreams of the internet erasing all inequalities and prejudice were vastly overhyped, noting that early online games like LambdaMOO evinced ugly racism, orientalism, and harassment. Yet it’s clear that the rationalizing, homogenizing, and imposition of corporate-hegemony over that old internet has not only failed to solve that problem, but allowed it to metastasize into a threat to democracy itself. 
  • We can transition to a more regulated space without losing the beauty, freedom, and creative spirit of this incarnation of virtual reality. It’s an opportunity to get it right this time.

Meta claims ‘breakthrough’ in machine translation for low-resource languages.

  • In a Facebook post, Zuckerberg explained why Meta AI’s recent No Language Left Behind (NLLB) project merits attention.
  • Specifically, Meta AI tweeted, the company built an AI model capable of translating between 200 languages — for a total of 40,000 different translation directions.
  • “To give a sense of the scale, the 200-language model has over 50 billion parameters,” Zuckerberg wrote. “The advances here will enable more than 25 billion translations every day across our apps.”
  • According to a LinkedIn post by Meta AI, the modeling techniques from this work have already been applied to improve translations on Facebook, Instagram, and Wikipedia.
  • A Meta AI blog post implies that the company aims to integrate translation tools developed as part of NLLB into the metaverse, noting that “the ability to build technologies that work well in hundreds or even thousands of languages will truly help to democratize access to new, immersive experiences in virtual worlds.”

Shanghai allocates $1.5B to Metaverse development fund.

  • The city of Shanghai aims to lead China’s economic recovery by backing development in metaverse products and services, low-carbon energy projects and smart terminal technology.
  • The South China Morning Post reported that the Shanghai government planned to establish an industry fund of 10 billion yuan in assets, or nearly $1.5 billion, dedicated to metaverse development. 
  • This financing will go toward creating 10 “leading” companies and 100 small-sized firms that will specialize in “benchmarking products and services,” said Wu Jincheng, head of Shanghai’s Economy and Information Technology Committee, at a press conference on July 8.
  • Wu added that investment in the metaverse “will drive the transformation and upgrading of various industries in the real economy” and that there is “huge market value” in the three aforementioned sectors which are estimated to be worth a combined $224 billion by 2025.  

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