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Episode 1117

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#1117: Deconstructing “Voxels (formerly Cryptovoxels)”: Virtual Land Speculation & the Experiential Gap of Crypto-Based Metaverse Neighborhoods

August 5, 2022

Virtual land speculation within cryptocurrency-based Metaverse platforms has gone from boom to bust over the past couple of years. I sat down to do a deep dive with the Voxels platform (formerly Cryptovoxels) founder Ben Nolan to interrogate the premise of idea of buying and selling virtual plots of land. Nolan is not all in for all aspects of cryptocurrencies, including the carbon footprint of proof-of-work chains like Ethereum that Voxels uses, and surprisingly the buying and selling virtual plots of land as a speculative investment. Nolan says that “Voxels isn’t a way to make money. Voxels is a way to build the Metaverse and to capture the value that they create. It’s not an investment vehicle.” He’s increased the supply of virtual plots of land over the last years to keep it affordable, but to also capitalize on the NFT boom and crypto Metaverse hype to the tune of $22 million of 2021 revenue in New Zealand dollars.

Even though Nolan’s intentions are that plots of virtual lands should not be seen as speculative investments, the very nature of Cryptocurrencies and NFTs means that inevitably there are a number of parcel holders who are treating it as a speculative investment. Voxels has sold over 7,300 CVPA ERC-721 tokens since June 6, 2018 with a total supply of 7863 parcels, and they have not been able to escape the preferential attachment Crypto Whale dynamics that have been documented in Ethereum and Bitcoin as over half of the parcels are owned by 10% of the 2380 holders as of July 30, 2022. 22% of Voxels CVPA parcels are owned by the top 1% of holders (excluding unsold plots held by Cryptovoxels), 44% parcels are owned by the top 5%, 56% parcels are owned by the top 10%, 68% parcels are owned by the top 20%. There are similar numbers for Decentraland LAND holders with 20% of virtual land owned by top 1%, 41% owned by top 5%, 52% owned by top 10%, 65% owned by top 20%.

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Nolan said that one of the key differentiating aspects for why you’re buying plots of virtual land is because of the neighbors that you have around you in the Voxels maps. But one of the things that I noticed in my experience of exploring around Voxels is that there are a lot of empty plots of land. After doing a feature analysis of the 7863 parcels, I estimated that there’s around 2530+ plots of land are relatively empty or completely developed. This is a rough approximation based plots of land with only 0-1 features and voxel hashes less than 200-400 characters, listed parks, and about 4 days of spot-checking empty plots of land that I came across.

Doing a comprehensive assessment of empty or undeveloped plots of land would like take a larger crowd-sourced effort of defining the parameters and validation process, but my rough estimate translates to around 1/3 of the parcels of land are empty. On average, for every 2 plots of developed land, there is 1 plot that’s empty and relatively untouched. This translates to a lot of absentee Voxel land owners who have opted to maintain ownership of the virtual Cryptovoxels Parcel (CVPA) token without improving or contributing to the virtual experience of their neighborhood in any meaningful fashion. I think it’s reasonable to assume that a portion of those holders of undeveloped virtual land are treating it as a speculative investment without any regard to the experiential aspect of that investment.

This is where I found my experience of the neighborhood aspect of Voxels to be lacking. When there are so many empty and undeveloped plots of land, it creates a disjointed and fractured experience that reads as Metaverse Blight.

There’s also been a number of critical articles & video essays about cryptocurrencies that have come out in the last year that have tipped me over to being more skeptical than optimistic including Marlinspike (2022), Kondor, et al. (2021), Olson (2022), münecat (2022), White (2021), Zhang (2022), & Bauwens & Pazaitis (2019). [Full references down below]

I also found it difficult to find compelling experiences by just roaming around neighborhoods as there seemed to be a lot more noise than signal, and there were not as many ways to search or filter recommendations built into the website. I was also able to do a more comprehensive analysis of the parcels of land via the Cryptovoxels APIs, and one indicator that seemed to help filter out interesting worlds were ones that had a high number of features or a broad range of different types of features in the parcel. As an example, The Real Vision Headquarters has 2009 features, and this one of the more elaborate worlds with a lot of experiential design considerations. Of all of the available features, the most popular feature was vox models, then images, then cubes, and then NFT images, which speaks to the popularity of NFT art galleries and images within Cryptovoxels.

In doing a survey of all of the parcels of land there were 153033 images and 41187 NFT-images, which averages out to 19.5 images per parcel and 5.2 NFT images per parcel. Many times the images are voxel textures or promotional images that you might see on a marketing brochureware website, and so many parcels of land read like 3D websites aiming to share information. Sometimes the spatial architecture creates a unique volumetric experience to amplify the message, but more often than not the voxel architecture serves as a utilitarian space to maximize how many images can be shown.

Here’s a full accounting of the total number of other types of features with how many on average on each parcel: 184325 vox-models (23.4 per parcel), 153033 images (19.5 per parcel), 92133 cubes (11.7 per parcel), 41187 nft-images (5.2 per parcel), 18503 signs (2.3 per parcel), 12376 lanterns (1.6 per parcel), 9675 groups (1.2 per parcel), 8349 collectible-models (1.1 per parcel), 7104 megavoxs (0.90 per parcel), 5464 polytexts (0.69 per parcel), 4352 videos (0.55 per parcel), 2920 youtube (0.37 per parcel), 2905 richtexts (0.37 per parcel), 1939 particles (0.25 per parcel), 1561 audios (0.20 per parcel), 1031 spawn-points (0.13 per parcel), 919 portals (0.12 per parcel), 853 guest-books (0.11 per parcel), 687 buttons (0.09 per parcel), 399 boomboxes (0.05 per parcel), 266 text-inputs (0.03 per parcel), 135 polytext-v2s (0.02 per parcel), 82 vid-screens (0.01 parcel), 44 poap-dispensers (0.006 per parcel), 23 slider-inputs (0.003 per parcel), 20 screens (0.003 per parcel), 1 discoverables (0.0001 per parcel).

The number of characters in the voxel hash also indicates how much the parcel owner has altered their piece of land. The higher that number, then the more work that they’ve put into it. The largest voxel hashes are the DERAGELAND and then ME Swing Tower. The voxel length is another indicator of how much a parcel of land has been modified. Also looking at whether or the parcel name was and/or description was added is another indicator of how much the land has been modified. 53.8% of parcels modified the name and 24.5% of parcels added a description. One of the more reliable recommendations are probably from the “womps” that are screenshots that are shared on the front page of Voxels.com. It’d be nice to be able to search and filter worlds by the number of womps, or by the number of times someone favorited it (a new feature that was added after my main evaluation period).

Getting personal recommendations of favorite worlds would likely be one of the most reliable methods, or to give more finer grained user tagging and searching. Some of the worlds Nolan recommended checking out where some of the Museum of Crypto Art worlds (searchable via the MoCA user), the Hexeosis Museum, The Rose Nexus in Gangnam in Origin City, Architect Island, Ogar Production [described as a Cannabis Cafe], and 3 Bus Estate [described as a church that’s black in Maker’s District].

Some of the worlds I enjoyed where jin’s 2 Proto Gardens hacker space and 3 Alva Fork, and the VRON Plaza by ross had some great speculative architecture with baked lighting that worked really well with a great payoff at the top. ME Lost Temple is a vast place. One of the most consistently impressive design firms is Metaverse Architecture firm Voxel Architects who built The [Jedi] Temple (Dark Junction), One BC, House of M, $WHALE Pagoda, zonted Gallery, Token Smart [Roman Colosseum], @westcoastbill 21x: glass age, and the @westcoastbill 21x: space age SpaceX installation that you see when you spawn.

One thing that I did enjoy about Voxels is the independent spirit that gives me a Geocities vibe of the early World Wide Web. These are low-fi, virtual worlds with a low barrier of entry to create and modify. Given that nearly a third of plots of land are untouched and undeveloped, it’s not too far of a stretch to say that the majority of the nearly 8000 parcels of land that are not very inspired or have a bare minimum of amount of modifications. But I also found it challenging at times to escape the mass consumerism of the crypto meme culture and trying to market and sell any number of digital goods. I was able to still come across enough weird, indie spatial art, that has some insights for what a spatialized, 3D web and Metaverse may evolve into. I did have a number of times that I spawned into a location and found something beautiful and unexpected next door to my destination, but this didn’t happen as much as I would have preferred in my weeklong deep dive, and I also had more mixed results when I went on a number of extended walks down a number of different suburbs.

I can’t claim to have seen every parcel of land, but I feel like I was able to see enough to get a representative sample where on the whole I didn’t find as many compelling experiences as I regularly do in VRChat or RecRoom. Nolan recognizes that Voxels may never be as compelling as these other higher fidelity social VR worlds, but he says that Voxels is trying to do something different and is an experimentation in data sovereignty where users take ownership of the virtual land. If there wasn’t such a disproportionate number of 10% of crypto whales owning over half of the parcels or 1/3 of the parcel owners being absentee speculative virtual land investors, then I think the idea of virtual land ownership might have more legs. This top of the broader Cryptocurrency and NFTs critiques listed below puts me firmly still in the skeptical camp when it comes to Crypto-based Metaverse platforms.

However, the technical architecture of Voxels is very impressive. There is a beauty in using a completely open web stack to build a vision of the open Metaverse that’s doing a better job of living into the interoperable values of the open web better than most projects. There are WebXR implementations, but I had mixed results of it either crashing out on the Quest 2 or not fully loading in all of the plots of land. So while I’m still not convinced by many of the underlying aspects of cryptocurrencies or NFTs, then I have to give Voxels credit for finding a way to bootstrap millions of dollars of funding without having to be beholden to VC investors. Let’s hope that they can translate more of that revenue into lessons for an open and interoperable metaverse, but also build in-world creation tools that helps democratize the process of virtual worlds and give a sneak peak of how the 2D web might start to be translated into immersive, 3D spaces.

Also, the jury is still out for me on what role cryptocurrencies, web3, and NFTs will play in the future of the open Metaverse. A lot of my more critical takes have been formed by the following articles and video essays that I’ve come across over the past year:

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Episode 1117
#1117: Deconstructing “Voxels (formerly Cryptovoxels)”: Virtual Land Speculation & the Experiential Gap of Crypto-Based Metaverse Neighborhoods