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Some Very Simple Economics of Web3 and the Metaverse

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  • Paul P. Momtaz

    (House of Finance, Goethe-University Frankfurt, Theodor-W.-Adorno-Platz 3, 60323 Frankfurt, Germany
    Anderson School of Management, University of California, Los Angeles, CA 90095, USA
    The Wharton School, University of Pennsylvania, Philadelphia, PA 19104, USA
    Center for Blockchain Technologies, Computer Science, University College London, London WC1E 6BT, UK)

Abstract

The Metaverse refers to a shared vision among technology entrepreneurs of a three-dimensional virtual world, an embodied internet with humans and the physical world in it. As such, the Metaverse is thought to expand the domain of human activity by overcoming spatial, temporal, and resource-related constraints imposed by nature. The technological infrastructure of the Metaverse, i.e., Web3, consists of blockchain technology, smart contracts, and Non-Fungible Tokens (NFTs), which reduce transaction and agency costs, and enable trustless social and economic interactions thanks to decentralized consensus mechanisms. The emerging Metaverse may give rise to new products and services, new job profiles, and new business models. In this brief note, I assess the promises and challenges of the Metaverse, offer a first empirical glimpse at the emerging Metaverse economy, and discuss some simple Metaverse economics that revolve around building and operating the Metaverse.

Suggested Citation

  • Paul P. Momtaz, 2022. "Some Very Simple Economics of Web3 and the Metaverse," FinTech, MDPI, vol. 1(3), pages 1-10, July.
    • Handle: RePEc:gam:jfinte:v:1:y:2022:i:3:p:18-234:d:853743
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    References listed on IDEAS

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    Cited by:

    1. Weichu Deng & Teng Huang & Haiyang Wang, 2022. "A Review of the Key Technology in a Blockchain Building Decentralized Trust Platform," Mathematics, MDPI, vol. 11(1), pages 1-29, December.
    2. Shekhar Rathor & Mingyu Zhang & Taehoon Im, 2023. "Web 3.0 and Sustainability: Challenges and Research Opportunities," Sustainability, MDPI, vol. 15(20), pages 1-17, October.
    3. Bank for International Settlements, 2024. "The economic implications of services in the metaverse," BIS Papers, Bank for International Settlements, number 144.
    4. Pietro De Giovanni, 2023. "Sustainability of the Metaverse: A Transition to Industry 5.0," Sustainability, MDPI, vol. 15(7), pages 1-29, March.
    5. Maria José Sá & Sandro Serpa, 2023. "Metaverse as a Learning Environment: Some Considerations," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    6. Vidal-Tomás, David, 2023. "The illusion of the metaverse and meta-economy," International Review of Financial Analysis, Elsevier, vol. 86(C).

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