However, the "metaverse" trend failed to take off, and Nike is only the latest company to abandon its multi-million dollar investment in the space.
Nike to shut down its RTFKT "virtual sneakers" project
Nike will be shutting down its RTFKT "virtual collectibles" project at the end of January 2025, according to an announcement made in early December. Nike had acquired RTFKT in 2021 as "part of its move into the metaverse", banking on the idea that people would be excited to buy virtual sneakers and other NFT collectibles that their avatars could wear in the metaverse.
State securities regulators settle with GS Partners over pyramid schemes including "tokenized skyscraper"
Five states have settled with the European crypto firm GS Partners over several crypto investment pyramid schemes. These included one in which the firm sold crypto "vouchers", each representing a single square inch of a 36-floor Dubai sksycraper, which they said would allow holders to earn passive income from rental leases. The group reportedly offered a 5% weekly guaranteed return. Other schemes involved selling metaverse land and a token purportedly backed by gold. GS Partners worked with various celebrity spokespeople, including eternal moth-to-the-flame of scammy crypto projects, Floyd Mayweather. The GS Partners firm shut down in the United States as of December 2023.
Terms of the settlement include 100% repayment of investments made by victims in the five states that settled: Texas, Alabama, Arizona, Arkansas, and Georgia.
GS Partners has also faced regulatory scrutiny in other US states, as well as in Canada, Australia, and South Africa.
Wilder World game suffers $1.8 million theft, blames contractor
Wilder World is a blockchain-based racing game that uses all the buzzwords: blockchains, artificial intelligence, and metaverse. On March 16, someone with access to the project deployer's private key upgraded legacy contracts and transfer the project's $WILD and $MEOW tokens to themselves. Altogether, the attacker profited 515 ETH (~$1.8 million), which they then laundered through the Tornado Cash cryptocurrency tumbler.
The project blamed the theft on a previous contractor who had the private key. They also explained that the attacker seemed to be a developer based on the fact that they had "specialized knowledge of ZERO's internal security systems".
Fintoch scammers strike again with $1.6 million FinSoul scam
A metaverse gaming project called FinSoul promised users “sandbox worlds, multiplayer sports, leisure experiences, player socializing, MMORPG,” and other features. However, on October 10, the project team made off with $1.6 million, which they then tumbled through Tornado Cash.
The team behind the FinSoul project was reportedly the same as the group who pulled off the much larger $31 million Fintoch exit scam in May. They used similar strategies, including using paid actors to pose as their executive team, to push the FinSoul scam.
Disney exits the metaverse
Disney has shut off the last light in its metaverse division, parting ways with "metaverse chief" Michael White. In February 2022, Disney's then-CEO described the metaverse as "the next great storytelling frontier". That sentiment appears to have been short-lived, because in March 2023, Disney cut its 50-person metaverse team, leaving only White.
Neopets shuts down its Neopets Metaverse project
After announcing a Neopets Metaverse project — complete with NFT collections and two different crypto tokens — in 2021, Neopets has announced they will be "transition[ing] away from the Neopets Metaverse game and redistribut[ing] those resources to the development of a game that we feel can better reflect our values and vision." The announcement came along with an announcement that the company had raised $4 million, and undergone a major change in leadership. They reassured their community that its new project, "World of Neopets", will not have any NFTs and "is NOT built on a crypto model".
The announcement referred to wanting to "design a game that's more in line with what the community has been asking for", a nod to the backlash from the Neopets community when the company decided to go web3. In September 2021, one of the most popular Neopets fan communities tweeted, "The Neopets community overwhelmingly rejects the new NFT cashgrab project. We're hard pressed finding someone outside of the NFT community that wants this."
Holders of Neopets NFTs seemed somewhat split on the announcement that the NFTs would remain tradable on secondary markets, but would not be incorporated into any game. Some described the project as a "rug", and were disappointed that the NFTs they'd purchased would never be useful in-game. "Once an NFT has no use, the price tends to tank", one person (accurately) remarked. Another commented that they'd always viewed the NFTs as little more than a collectible, and were satisfied with it never going beyond that.
Co-founders of company best known for Bella Hadid NFTs begin $77 million court battle against each other
Krzysztof Gagacki and Edmond Truong are co-founders of Rebase.gg, some sort of augmented reality app where people go hunting for NFTs. They're best known for helping to create a "Cy-B3lla" NFT collection with model Bella Hadid, which launched in mid-2022. Speaking about skepticism of celebrity NFT projects to Vogue in June 2022, Hadid said, "Where that skepticism comes from is the people who just want to have a money grab. To me, it’s so much bigger than that. I want it to be a collective. It’s not a one-stop shop—this is a real passion."
Although the project promised to provide ongoing access to Bella Hadid and various other perks, the project website has already dropped offline, the Twitter account hasn't posted since October 2022, and the Discord is a ghost town save for occasional questions about whether the project is dead. Hadid made $1.5 million for her involvement in the project.
Things at Rebase seem to have devolved, because now Gagacki has filed suit against Truong, alleging that he "has gone rogue". The suit alleges that Truong tried to oust Gagacki from the company, stole around $2 million from a shared wallet, and damaged Gagacki's reputation. In particular, Gagacki is concerned that Truong is attempting to launch the project on the Arbitrum network without Gagacki's involvement, and that tokens minted there "could reach many times over the Rebase app's last round valuation of $150,000,000" without being shared with Gagacki.
Altogether, Gagacki is claiming damages of no less than $77 million, representing the stolen funds, the value of the app, and the profits from the possible Arbitrum deal.
Decentraland adds that one feature we've all been waiting for: landlords
If the idea of dropping thousands of dollars to "own" a plot of "land" in the Decentraland metaverse doesn't do it for you, have I got news for you: Decentraland has just introduced official support to allow its users to become a part of the rentier class. Exciting!
In case you were wondering, I checked, and yes. Someone has already come up with the concept of metaverse mortgages.
Personally, I'm excited to see other horrific parts of the system of homeownership get recreated virtually. Metaverse homeowners associations. Metaverse building permit red tape. Metaverse NIMBYs. Metaverse property liens. Metaverse neighborhood watch.
CoinDesk reports that Decentraland has just 38 daily active users
According to CoinDesk, the metaverse platform Decentraland is entertaining roughly 38 users a day these days. This isn't much for its "valuation" of $1.3 billion — although CoinDesk seems to be estimating this on "market cap". Its competitor, the Sandbox (also "valued" at around $1.3 billion), is doing a bit better — with a whopping 522 daily active users.
Not only that, the most users Decentraland has ever had in one day is only 675; The Sandbox had 4,503 at one point.
CEO of Ragnarok metaverse game admits to treasury mismanagement, including nearly $2 million in trading losses and exorbitant salaries
Ragnarok is a metaverse role-playing game that launched its character NFTs in April 2022. The project received $1.75 million in seed funding, plus another $17.5 million from NFT sales and royalties.
On August 26, CEO Fanfaron published a Substack post providing a breakdown of the project's finances, which he began by saying, "As a previous business owner, and because Ragnarok is a startup and not a DAO, our initial plan was never to operate our finances in public, which is why we have historically been closed and unwilling to share full accounting of our balance sheet." As the post went on, it became clear there might be other reasons they were reticent to publish it.
The post revealed that Fanfaron had lost $1.827 million buying ETH during the crypto downturn: "I made mistakes by buying ETH multiple times when I thought it was an advantageous investment for the project, but then to protect downside risk and with the plan to reinvest at a better time, I sold our position in ETH, multiple times.."
It also revealed that the project is paying its team members apparently enormous salaries: $5.4 million in team compensation, plus another $1.5 million spent to buy out a co-founder. "We're a scrappy startup," he wrote, after also acknowledging that he pays himself $50,000 a month ($600,000 a year) — a number he already reduced by $600,000 from his original salary of $1.2 million per year. He ultimately promised in the post to pay back his trading losses.
As for the game, well, it exists, which means it's already ahead of a lot of crypto games. They launched an alpha version of the game in late July after multiple delays, with Fanfaron explaining, "Our vision was to create something similar to WoW... we were, however, overeager and optimistic with regards to how much time it takes to create such a world." The alpha is a multiplayer pixel art world where characters can walk around and talk to each other, and interact with buildings. Battling, leveling, quests, missions, and breeding are apparently all yet to come.
- "From Fanfaron"
- "Ragnarok: The MetaRPG", This Week in Avalanche