Web3 AI 2024 vs Web3 Metaverse 2022: Another hype narrative?

In this article, we'll look at the parallels and differences between the AI hype of 2024 and the metaverse hype in 2022. Are we on for another drop off the cliff with AI in the next bear?

It is October 2021, one of the largest companies in the world - Facebook rebranded itself as Meta. Mark Zuckerberg, the guy who brought us the greatest social network in the world being so bullish about metaverse was the biggest push we could have, isn’t it?

You buy Decentraland, one of the most promising Metaverse projects in the web3 space valued at $1.4B at that point of time.

Fast forward a month, your $MANA has pumped 8x ( yes, from already a MC of over a Billion ) and you think Metaverse is the future. We are all going to meet in the metaverse and no one will ever have to come out of their homes.

This didn’t happen. $MANA is at $588M today and I still don’t own anything in the metaverse.

NOTE: NOTHING EVER MENTIONED IN ANY OF OUR CRYPTO TALK’s POSTS/NEWSLETTERS/CONTENT IS FINANCIAL ADVICE. ALWAYS DO YOUR OWN RESEARCH

What happened to the metaverse?

Virtual worlds, digital real estate, avatars running around with VR headsets—what could go wrong? Well, as it turns out, quite a lot. Despite all the hype, the metaverse hasn’t exactly taken off like a rocket ship. Instead, it’s more like someone trying to fly a kite in a windless desert.

The following is info. curated from various VR users across the internet:

First, let’s talk hardware. While the idea of slipping into a digital universe sounds cool, strapping on bulky VR headsets that make you look like a confused astronaut doesn’t scream “everyday convenience.” The technology is still a bit, well, clunky. And don't even get me started on the motion sickness. Turns out, not everyone can handle a virtual rollercoaster without needing a real-world nap.

Second, there’s the little issue of "Who’s paying for this?" Sure, companies bought up digital land in the metaverse like it was prime real estate, but most of us can’t justify spending on a virtual mansion when we’re still paying off the real one. Besides, who really wants to hang out at a virtual concert when YouTube exists for free?

Lastly, the metaverse promised a revolutionary social experience, but it mostly turned into awkward encounters with legless avatars and glitchy interactions. Turns out, people prefer chatting face-to-face—or at least, in 2D. I’m still waiting to get hands on with the tech Mark and Lex used themselves though.

In short, the metaverse may not be dead, but it’s definitely taking a long coffee break. There’s still potential, but for now, the virtual dream hasn’t quite hit reality.

What about metaverse projects in crypto?

The metaverse hype in crypto, once a booming trend in 2022, has seen a significant dip in recent years. Projects that promised immersive virtual worlds backed by blockchain technology have struggled to maintain momentum. While platforms like Decentraland and The Sandbox initially attracted large investments and partnerships, user engagement has failed to meet expectations.

One key issue has been the slow adoption of the necessary hardware, like VR headsets, along with limited practical use cases for digital real estate and metaverse tokens. Additionally, as attention shifted toward AI advancements and real-world blockchain applications, the speculative appeal of metaverse tokens diminished.

The crypto market’s volatility has also played a role, with investors becoming more cautious. In a space where trends move fast, the metaverse buzz has been overshadowed by newer innovations. Though still a developing concept, the metaverse hasn’t yet achieved the widespread success it once promised.

At the peak of the metaverse hype, the total market cap of metaverse-related crypto projects reached its all-time high at around $35 billion in late 2021. Projects like The Sandbox (SAND), Decentraland (MANA), and Axie Infinity (AXS) were major drivers, each boasting multi-billion dollar market caps during the frenzy surrounding the metaverse.

Fast forward to August 2024, and the market cap of the top metaverse tokens has taken a significant hit. The combined market cap of leading projects like The Sandbox and Decentraland has dropped to approximately $661 million and $590 million, respectively, reflecting a steep decline compared to their peak values.

Why the AI hype today is different?

AI has definitely been one of the biggest narratives of this crypto cycle and many people are comparing it to Meta hype in 2022 but I think that is very unfair on AI. We all have already used AI products, have we not? How many of us have used a VR to log into a metaverse?

AI has already reached retail. In fact it reached retail through Dall-E, ChatGPT and midjourney before booming in the web3 space. Metaverse still hasn’t, even after 3 years.

While the metaverse concept faced challenges in adoption, infrastructure, and usability, AI technologies like natural language processing (NLP), machine learning (ML), and generative AI are delivering tangible results today. AI’s ability to enhance decision-making, optimize operations, and automate tasks makes it invaluable in sectors like healthcare, finance, and logistics.

Unlike the metaverse, which required a significant shift in user behavior and extensive hardware investments, AI is seamlessly integrating into existing systems.

Moreover, AI is backed by growing demand for innovation, while the metaverse is still grappling with unclear utility. Ultimately, AI’s adaptability and current value proposition give it a much stronger foundation than the metaverse for future growth.

AI projects making a difference

I just want to talk a bit on the front runners of web3 AI.

1. Bittensor TAO
   Bittensor is a decentralized, blockchain-based protocol that creates an open, permissionless marketplace for AI models. It allows AI developers to monetize their work by sharing their models and contributing to a global neural network. TAO tokens fuel the system, providing incentives for model creators and validators.

2. Render Network
   The Render Network is a decentralized platform that connects creators needing GPU power with GPU owners. It enables AI and 3D rendering tasks, allowing complex visual projects to be processed in a cost-effective and scalable way. This network supports industries like gaming, movies, and metaverse projects.

3. Artificial Superintelligence Network (ASI)
   ASI is focused on building decentralized AI agents capable of reaching advanced intelligence. It aims to create a global AI network that evolves autonomously, leveraging blockchain's decentralized nature to enhance learning and improve decision-making processes in various sectors, from finance to healthcare.

That’s it from me in this mid-week edition of the OCT newsletter, if you have any comments on the article, please comment and we will catch up with you on Saturday with the “Hodl Up! Week in review”. Stay SAFU.