Collect this post as an NFT.
Web3 is slowly yet steadily gaining its global impact. Ethereum, Solana, Whitechain, NEAR – all these titles stand for decentralized networks while being only the tip of the iceberg among the diversity of protocols and innovations they present.
As this signifies a potential for accelerated Web3 implementation into all walks of life, I asked Eugene Capon to share a bigger picture on the Metaverse, Web3, and asset tokenization.
Below – exclusive insights by XR expert, creator of Metaverse content for Microsoft and High Fidelity, and Metaverse educational advisor for the United Nations.
– Seeing that you are a keen Metaverse expert, I would really love to know what got you into that realm. How did your path in Web3 begin?
– How I got into Web3 and XR (Extended Reality) is a long, drawn-out story with many roadblocks along the way.
I have a BA in Social Media Innovation from Evergreen State College, which I earned after obtaining two associate degrees in Visual Communications. This education equipped me to study the internet's evolution, focusing on social media and technology's impact on people, communities, and governments.
I discovered XR in a big way before major VR headsets were released. A designer showed me a 360-degree experience prototype he had created using Google Cardboard and his smartphone. This was my "Eureka" moment. After seeing this, I saved up for three months while working as a creative director at a YouTube consulting agency, then quit to explore XR full-time. It was the best decision I ever made.
– What is the future of Metaverse? Will it obtain the overall success that is expected from it? Why/why not?
– The question of what the future of the metaverse holds is definitely putting the cart before the horse because the metaverse is not a thing yet.
The metaverse is a byproduct of the third generation of the internet, an era that has not come to be yet. For the crypto community, when they say Web3, they are usually specifically talking about cryptocurrency and blockchain, even though Web3 should be referring to third-generation web technologies, including cryptocurrency and blockchain.
Web 3 should refer to the third generation of the internet, encompassing technologies that will become massively adopted in this era. That generation is at least six years away. I think it will succeed because it’s the natural progression to the next generation of the internet; it’s just waiting for the rest of society to catch up.
– You were a CEO at Studio Capon – a Metaverse creative studio. From an expert point of view, could you assume that media and communication will be fully transferred from the IRL dimension to Metaverse?
– I was the CEO at Studio Capon, which we shut down in November 2023. I believe there is a place for communication in XR, but there is also a time and place for normal communication without using technology in everyday conversations. There will definitely be a point when newer technologies will come along to replace the current technologies we use for communication. It’s hard to believe, but there will be a time when smartphones are replaced by some other technology.
– Can real-life asset tokenization seek its use in Metaverse? How?
– People get too caught up in the use of blockchain because it’s so widely used to facilitate financial transactions, overlooking its broader functionality. The use cases for blockchain are much more extensive. For example, blockchain could be used to keep track of receipts every time you go to the grocery store, which is a much better system than printing out tiny pieces of paper that will get lost in your wallet or purse.
It blows my mind a little that there is such a large community around transactional ledger technology. I’ve always felt that while blockchain is immensely useful, it is also overhyped. Blockchain in the metaverse also has several uses one to facilitate Financial marketplaces that assets might be sold through, keeping track of digital assets from one platform to another, keeping track of the behavior of those digital assets and what they mean in a game engine, keeping a virtual Ledger made to impact persistence in Virtual Worlds which is a requirement for the Metaverse to be a exist and so fourth.
– We’re currently introduced to a wide array of asset tokenization technologies and consensus mechanisms. Is there any chance asset tokenization will be solidified into a single technological stack?
– I don't believe there will ever be a single blockchain used for everything because the use cases for blockchain are so vast. For instance, one chain might be better for moving assets from one virtual world to another, while another chain might be optimized for keeping track of text files or records. Another thing to consider is that the point of a public ledger system is its public aspect, but the things you are keeping track of might be things you don't want to be public. This very fact can create a disconnect for a lot of people.
– How do you see asset tokenization transforming traditional financial markets and institutions?
– Asset tokenization can be powerful for many businesses that are too small to take their companies to the public market. It's a great way to get initial investment for an idea, concept, or working model. It also allows investors to pull out their money at either a loss or a gain if the business does not show promising results. In many cases, when a business doesn't succeed as expected, investors typically lose everything.
– How do current regulatory frameworks impact the adoption and growth of asset tokenization? Are there any notable jurisdictions leading the way? What are the crucial barriers to the widespread adoption of asset tokenization, and how can they be overcome?
– Getting the public to adopt digital currency shouldn't be an issue because much of our society has already digitized money through apps for payments, virtual credit cards, and online banking to track our finances. I believe there will come a time when physical money is phased out in favor of digital money. However, there will always be a small group that believes financial institutions will one day be destroyed, leaving only physical money and minerals like gold or silver as a measure of wealth. These are the people who hide money in walls or under the mattress, so to speak.
There are a number of institutions taking a stance on tokenized assets. The SEC sets the criteria for what is considered an investment, particularly those offered to institutional investors. The CFTC (U.S. Commodities Futures Trading Commission) regulates cryptocurrencies classified as commodities. Then, of course, there is the IRS (U.S. Internal Revenue Service), which regulates cryptocurrencies for tax purposes, viewing them as property.
– How is security and compliance of tokenized assets ensured, especially considering the decentralized nature of Web3?
– Just like fiat currency, security and compliance can be an issue with tokenized assets. However, in the decentralized nature of Web3, decentralized doesn't mean hidden—it means public. It's often easier to track people who have stolen cryptocurrency than those who have stolen virtual money in a centralized system. It has taken a while for governmental institutions to acknowledge the legitimacy of tokenized assets in the same way they do fiat money.
– Are there challenges in getting traditional legal systems to accept digital ownership?
– The biggest challenge I see society facing with the adoption of digital ownership is getting physical locations to accept digital currency as a proper form of payment, especially given the market's volatility. Now that governmental institutions recognize that tokenized assets can be taxed, legal systems have become more accepting of this shift.
– Will digital ownership replace traditional one? Why/why not?
– I don't think digital ownership will replace all aspects of ownership which I feel like that's what you're actually asking. There will be a time and place where digital ownership through blockchain technology will be far superior than not using blockchain but we have to remember it's not the solution all in the world.
