Metaverse Platforms Need To Take Action Right Away To Present Web2 Titans With Alternative Ownership Visions

Metaverse – According to a new Galaxy Digital analysis on non-fungible token (NFT) licensing, if action is not made to solve digital property rights, decentralized metaverses will only be decentralized in name.

Published on Friday, the report authors — head of firmware research Alex Thorn, Galaxy Legal director Michael Marcantinio and Galaxy Research’s Gabe Parker — warned that if the digital property of the metaverse is not owned by its users, the technology could provide the designs for something like an all-encompassing social credit system.

“If these problems are not addressed now, the supposed decentralized metaverses will not materially differ from those being built by Web2 giants like Meta (Facebook)” they said.

The paper examined The Sandbox and Decentraland’s metaverse license agreements to see how real-world copyright and trademarks are viewed in the metaverse environment. The study found that while both businesses make “reasonable efforts” to transfer ownership of user-generated content to their users, they nonetheless hold onto all intellectual property associated with the sales of land parcels in their metaverses, just granting usage rights to NFT buyers.

However, there is no assurance that the administrator of a metaverse will support user-generated content within their virtual environment, even if users hold the rights to it. Regardless of IP rights, they are able to block or remove content thanks to content moderation regulations.

“Simply owning the rights to a custom-made character skin, for example, does not guarantee that Decentraland or Sandbox will allow the skin to be used within the game… absent a third-party alternative world in which to deploy your user-generated content, its effective use relies upon the consent of the metaverse operator” they said.

It also targeted Otherside, a future metaverse project from Yuga Lab

Although Otherdeeds does not grant these, NFT token holders do have commercial rights for other Yuga Labs collections like the Bored Ape Yacht Club.

“The Otherside agreement is explicit that purchasing Otherdeed NFTs conveys no intellectual property rights” noted the report.

In response to the story, Sandbox COO and co-founder informed that because the ecosystem’s tokens are on the blockchain, they may be utilized on other platforms or traded on markets.

“We believe we are still delivering the decentralize metaverse approach that differs from the one built by Web2 giants, where users have no control and no ownership whatsoever of their digital content and data” he added, also noting that, as per the company’s roadmap, the content moderation process itself is set to be decentralized. 

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