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As Meta Platforms CEO Mark Zuckerberg ha said, the metaverse is “the next generation of the internet,” a virtual environment you can enter – instead of just observing on a screen – where you can (or soon will be able to) work, play, socialize, shop designer brands, buy virtual land, and a lot more. Part of what makes the metaverse special now – as compared to existing videogame universes or social media platforms – is the ability to buy, own, and resell digital assets, a feature that has been enabled by the development of the blockchain technology. More than that, the metaverse allows people to escape the individual, geographic and social limitations that bind them. 

Although it still is at an early developmental stage, the global metaverse market is expected to reach $758 billion by 2026, and as with any groundbreaking technological development, the metaverse will give rise to complex legal issues. In fact, legal disputes are already surfacing in the courts, particularly when it comes to the right to create and sell non-fungible tokens (“NFTs”), i.e., digital assets stored on a blockchain that represent digital – or real-world – objects like art, music, or videos. In January 2022, Hermès filed a trademark lawsuit against digital artist Mason Rothschild for creating and selling 100 MetaBirkins NFTs that depict the company’s iconic Birkin bag. 

In response to Hermès’ trademark infringement and dilution complaint, counsel for Rothschild has comparing his use of the Birkin trademark to Andy Warhol’s famed use of the Campbell’s soup cans in the early 1960s, arguing that he is selling art that is shielded from trademark liability by the First Amendment. 

Another one of the high-profile intellectual property battles related to the metaverse involves Nike, which filed a trademark infringement lawsuit against StockX in early February 2022, claiming that the reseller was offering up NFTs that display Nike’s trademarks without authorization.

Several lawsuits will also arise in relation to contracts entered into before the metaverse era. For all intellectual property contracts drafted before the metaverse was even contemplated, a major source of contention will be to determine who owns the said rights in the metaverse and whether they include the right to mint a corresponding NFT. This issue was at the core of the lawsuit that production company Miramax filed against director Quentin Tarantino following the announcement of his plans to auction off NFTs of seven exclusive scenes from his handwritten Pulp Fiction script. Miramax argues that Tarantino’s NFT project violates their contract – although the contract was entered into long before the invention of NFTs. 

The Hermès, Nike and Miramax-Tarantino lawsuits are far from being the only type of Web 3.0 disputes. There will inevitably be numerous claims lodged by users against metaverse platforms or among metaverse users, themselves. Although there will certainly be new types of disputes, the rise of metaverse will also give rise to disputes of the same nature we encounter today in the “real” world. 

Disputes Against Metaverse Platforms

One of the most obvious and predictable types of disputes that will arise between users and metaverse platforms will concern the use of personal data, as it is virtually impossible for metaverse platforms to guarantee the absence of hacking attacks indefinitely. A growing number of disputes relating to virtual real estate in the metaverse is also likely given that the virtual real estate market is booming. Prices have recently reached unprecedented levels, with a total volume of $500 million last year (including a single transaction of $2.43 million in Decentraland) and are expected to double in 2022. What increases the value of a specific plot of land is not only its location but also its scarcity, since most metaverses guarantee a limited number of available plots. But what if the value of your waterfront parcel in a very trendy Saint-Tropez-like village suddenly falls, as the metaverse platform decides to build an airport instead of the virtual sea in front of your house, or to remove the sea altogether? Would you have a legal claim? Should you (and can you) ask for more guarantees than those provided by default, when buying your plot of land? 

And what if, despite its current commitment, a metaverse platform unilaterally decides one day to increase the number of plots? The value of your real estate investment would undoubtedly decrease, but would you have a claim against the platform for breach of its commitment to limit virtual land? Lastly, what if a metaverse platform goes bankrupt altogether or shuts down its servers? What claim would you have against it? Which bankruptcy law would be applicable?

There may also be disputes concerning the interference of metaverse platforms in users’ personal investments in the metaverse, where they are allowed to offer services to users or to create digital assets and sell them to other users. But what if, after having invested a fortune in building a state-of-the-art virtual flagship store, exhibition center, concert hall or gaming experience, the metaverse platform unilaterally decides to shut it down, or even delete your account altogether, because it finds your activity to be against its policy (which always contains a degree of subjectivity)?

With the foregoing in mind, companies that are eyeing ventures in the metaverse should assess the guarantees offered by the metaverse platforms – and their rights in case of violation, which vary from platform to platform. This includes carefully considering the terms of use, with a particular focus on: (1) the type of activities that are prohibited; (2) the scope of the metaverse platform’s limitation of liability: some platforms (The Sandbox and Decentraland) limit their liability for example in case of a bug or virus in the metaverse software, which may impact the services a user is offering or its digital assets; (3) the existence of an overall limitation of liability cap (e.g. $100 for The Sandbox and Decentraland); (4) the governing law and its impact on the users’ rights and obligations. Currently, Decentraland provides for the laws of Panama, The Sandbox for the laws of Hong Kong, and Cryptovexel for the laws of New Zealand; and (5) the dispute resolution method: currently, arbitration under the ICC rules for Decentraland and jurisdiction of the courts of Hong Kong for The Sandbox.

Disputes Among Users

As for disputes among metaverse users, in addition to the trademark disputes already underway, and any potential criminal and tort disputes that inevitably carry over to the metaverse from the physical world (such as theft of digital assets, sexual harassment practiced by one avatar against another, housing disputes between neighbors, etc.), a large part of disputes will arise from transactions between users.

In the metaverse, users can: offer services to other users (e.g. gaming experience, concert, real estate agency services, coaching); create digital assets (e.g. wearable, accessories, art) and sell them to other users; and rent or resell parcels of virtual land to other users. Against this background, there are questions over what terms and conditions apply to these transactions? 

When it comes to NFTs, for instance, transactions are completed through smart contracts, which automatically transfer (permanently or temporarily) the ownership of the digital asset (i.e.  virtual land, virtual objects, or virtual vouchers giving access to a virtual service) from one user to another upon reception of crypto payment. However, these smart contracts are currently limited to monetary obligations and term limitations; they do not allow users to provide for more complex rights and obligations to govern these transactions. In some specific circumstances, it might therefore be advisable to also enter into a “classic” contract specifying in particular the real identity of the avatars and the applicable law and dispute resolution mechanism chosen by them. The applicable law would address all the issues that could not be anticipated upon coding of the smart contract or drafting the “classic” contract.

Alternatively, NFT and/or metaverse platforms could also start providing fair, transparent, and impartial dispute resolution mechanisms for disputes between users. They could, for example, allow disputes between users to be decided by a third party through a decentralized justice system, similar to the one used by eBay in the early 2000s. They could also provide for automatic enforcement of these decisions, which would be particularly important given the avatars’ anonymity. The success of metaverse platforms will undoubtedly depend on their ability to address these dispute resolution issues.

The dispute resolution framework will likely have to be reinvented to account for the technological settings of the new environment we are moving into. Our legal system is based on geography because it is the world we currently live in, but in the metaverse – where anonymous avatars from all around the world are interacting and transacting with each other – time, location and identity are fluid perceptions. The legal concepts of habitual residence, place of business of the parties or real estate property location, which are traditionally at the core of private international law rules, become meaningless. Therefore, before investing on NFT ventures or the metaverse market, more generally, companies and investors, alike, would be well advised to carefully check the applicable terms of use, if any, and in certain circumstances, enter into a contract better suited to the particular needs of the transaction.

In case of disputes, contracts should allow for arbitration (after a potential mandatory mediation) rather than court litigation. These alternative dispute resolution mechanisms offer valuable advantages for digital transactions, provided they adapt to meet the challenges of technology and time-sensitivity: ability to agree in advance on the applicable law or the language of the proceedings, flexibility of the process, arbitrators’ expertise in the technologies at hand, ease of enforcement of arbitral awards under the New York Convention, etc.

Juliette Asso is counsel at LALIVE, where she specializes in international arbitration, including both commercial and investment treaty arbitration.

Laura Azaria is counsel at LALIVE, where she specializes in international arbitration and litigation.

Several companies, including Apple and Microsoft, are betting that the world of tomorrow will, at least in part, be carried out in the metaverse. To this end, Microsoft recently acquired the video game giant Activision Blizzard for $68.7 billion. As more of our daily activities take place online, we believe it’s time to consider how this may eventually play out; if tomorrow’s city dwellers prefer the metaverse to brick-and-mortar stores and other urban amenities, what will it mean for cities and what purposes will cities ultimately serve?

As professors in the departments of urban environment and digital culture we delve into this question and examine how the metaverse could profoundly change our relationships with urban spaces. This vision of the future may seem quite dystopian, but let us take this opportunity to imagine what the cities of tomorrow might look like. 

From science fiction to reality

The term metaverse does not come from the fields of science and technology, but rather from science fiction. Neal Stephenson coined the term in 1992, in his novel Snow Crash to designate a dystopian virtual urban environment. Stephenson’s metaverse is depicted as a very long boulevard generated by powerful computers. It is controlled by the Global Multimedia Protocol Group, which manages building permits, regulates zoning and delimits the boundaries of businesses, parks and advertising spaces. These spaces, rented or bought by large corporations, make the metaverse a virtual urban environment entirely controlled by private interests, those of the digital technology giants.

Virtual urban environments

Thirty years after the publication of Stephenson’s novel, elements of science fiction are now giving us a preview of the new realities and new urban challenges to come. We are currently spending astronomical amounts of money to make our cities more livable, equitable and sustainable, but what good are these investments if the citizens of tomorrow will only experience the city virtually?

Let us start by tackling social activities. Many urban attractions, such as cinemasrestaurants, museums, retail outlets, and historical monuments will see a drop in the number of customers passing through their doors. It is already possible to visit several museums virtually. As the metaverse grows, it will need more money, land, and infrastructure to house the computer servers it runs on. Although the experiences are virtual, their costs — in terms of moneyenergy and environment — are real and increasing. 

Will funding come from budgets previously allocated to urban spaces and infrastructures? Will our governments follow Saudi Arabia’s or South Korea’s example and start investing in infrastructure and plots of land within these novel virtual cities? In the coming years, other social activities – such as enjoying a coffee or a beer with friends – may also take place online. Not only will these virtual meetings eliminate the constraints of distance, reducing our use of urban transport, but they will also allow us to choose a location for a meeting anywhere on the “planet.” For example, a morning coffee with colleagues in the virtual garden of the Eiffel Tower could give way, in the evening, to festivities at a Super Bowl game in augmented reality. It would be like having sideline seats, but with the ability to choose different camera angles with a wave of the hand. 

Microsoft already offers a vision of this futuristic sporting experience with an augmented reality helmet called the HoloLens. Not only does the helmet give viewers the impression they are sitting in the stadium, it also allows them to interact with the screen using hand gestures.

Urban outings in virtual mode

Will the sociability of strolling through shopping malls, already virtualized by online sales, be reincarnated in the metaverse? Several companies believe so, including Samsung and Nike, which have launched retail spaces in the metaverse. At the same time, the likes of Gucci and Ralph Lauren, for example, launched a digital collections in the Roblox immersive world last year. 

Imagining a future where social activities take place in the metaverse may seem hasty and even a bit far-fetched, but the transition is already underway. Several major events have already transitioned to virtual venues, including the Sundance Film Festival, and artists like Ariana Grande, J. Balvin and Travis Scott are performing virtual concerts. Scott’s concert, shown on the video game platform Fortnite in 2020, attracted more than 12.3 million guests.

Physical activities are also increasingly being carried out virtually. Companies like Peloton now offer Tour de France and Giro-caliber bike rides, without the hassle of having to travel to Europe. Their popularity has soared to 5.9 million users in 2021 from 1.9 million users in 2019. Another example would be the company Tempo, which uses artificial intelligence to offer in-home workouts with a virtual personal trainer.

A new urban exodus

While practical, this transition to the metaverse changes the ways we interact with the urban environment and forces us to reconsider our urban priorities. Even today, many cities focus their attention on improving the quality and quantity of their parks and green spaces. But what will be the use of these parks and green spaces — places to meet, socialize and exercise — if tomorrow’s city dwellers carry out these activities online?

Without the need for urban spaces and the businesses that surround them, the benefits of living in the city may also diminish. Many Canadian households became used to telecommuting during the pandemic, and have since chosen to move out of the city and take advantage of more affordable rents. If, in addition to working from home, many people are able to carry out their social and physical activities remotely from the metaverse, we could very well see a new urban exodus.

Reinventing urban planning

Apple, Meta and Microsoft are not the only companies convinced that we will occupy the virtual worlds they are investing in, and cities must start taking this into consideration. Many urban spaces, infrastructures and developments will have to be reviewed and even reimagined. This process can take many forms. For example, one response to the corporate promises of virtual happiness associated with the metaverse could come in the form of new urban projects, such as the creation of community gardens and the redevelopment of coastal areas into urban beaches. Initiatives such as these, coupled with a renewed supply of affordable housing, could very well partially counteract the expected urban exodus.

Regardless of the chosen solution, it must stem from concerted and collective efforts from both the public and private sectors. Such efforts will have to involve current citizens to establish what roles we wish the metaverse to play in the cities of tomorrow.

If we do not start asking these questions soon, Silicon Valley will be happy to provide the answers. There is little to prevent Stephenson’s dystopian metaverse world from becoming reality. In any case, it is clear that the more private companies invest in virtual urban environments, the less we as a society are paying attention to the urban spaces we live in.

Mischa Young is an Assistant Professor at Université de l’Ontario français. Sarah Choukah is an Assistant Professor at the Center for Studies and Research in Digital Cultures at Université de l’Ontario français. (This article was initially published by The Conversation.)

In the six months since Facebook, Inc. rebranded to Meta Platforms, Inc., the idea of the “metaverse” has catapulted from a little-known science fiction fantasy to the forefront of popular culture. Despite this surge of interest, there is still limited consensus on what the term means and what its implications will be for consumers, various industries, and the economy as a whole. At least one area of the economy has already become a focal point of the metaverse: real estate. 

The concept of the metaverse can be traced back to science fiction author Neal Stephenson whose 1992 novel “Snow Crash” depicted an immersive, virtual reality-based successor to the Internet. And while this may still seem like little more than science fiction, the metaverse is much closer to reality than many realize. For almost two decades, digital platforms like SecondLife and Entropia Universe have allowed users to immerse themselves in digital worlds where they can socialize and build durable communities. More recently, popular games like Roblox, Fortnite, and World of Warcraft have further blurred the line between virtual and physical worlds, showing that consumers are ready to spend big on virtual goods and even attend events, like live concerts, in a purely virtual environment. 

The metaverse of today (or the near future) represents the next step in this evolution. It is a persistent and immersive digital ecosystem that allows individuals to seamlessly transition between their physical and virtual worlds, and it will likely rely on next-generation consumer electronics with augmented or mixed reality capabilities that can serve as a “gateway” into these virtual environments. It will feature advanced avatars. It will be built on blockchain technology, allowing for decentralized infrastructure and autonomous governance. And its full potential will likely require interoperability between virtual environments. 

The Real Estate Boom

Much of the metaverse remains aspirational. However, many companies and investors are already betting big on metaverse real estate, with sales of real estate in the metaverse topping $500 million in 2021 and are projected to top $1 billion in 2022. Already in January 2022, real estate sales exceeded $85 million.

One big reason for this interest in metaverse real estate is that blockchain technology, which serves as the foundation for many metaverse virtual worlds, allows for “true” ownership of virtual property. For example, in a traditional video game, the video game developer (or its licensors) generally owns the content and associated intellectual property rights in the game. While a brand might enter into a sponsorship agreement with the video game developer to display its trademarks or content within the game, the brand generally would not be able to buy or own any portion of the game. Moreover, the video game code is hosted on the developers’ servers, allowing it to modify, suspend, or terminate access to the game at any time. 

In contrast, metaverse virtual worlds are generally subdivided into a limited number of plots or parcels. Ownership of each plot is generally recorded in a non-fungible token (“NFT”) that is coded onto a public blockchain. Essentially, these NFTs are equivalent to a deed in the real world. Once the land is purchased, the landowner can construct houses, shopping centers, museums, art galleries or any other structure, limited only by the individual parcel’s height, width, and depth restrictions. Buyers can purchase individual parcels or buy adjacent parcels to create virtual estates. By virtue of the underlying blockchain technology, ownership of each virtual plot is permanently affixed to a blockchain network. Thus, once a plot is acquired, it cannot be controlled or altered by a third party; essentially, plot ownership is absolute and owners can develop, lease, sell, or otherwise use their virtual real estate as they wish.

A number of large investors and companies are already staking their claim in the metaverse, and the retail industry is one of the most active industries. For example, an investment firm recently purchased 116 parcels in Decentraland’s Fashion District for $2.4 million. In March 2022, Decentraland’s Fashion District hosted a Metaverse Fashion Week and big brands, including Forever 21, Philipp Plein, and Estée Lauder, took this opportunity to debut their flagship stores in the metaverse. These big brands, and others, are hoping that these virtual stores will give customers an experience similar to in-person shopping without the customer having to leave their home.  

Potential Risks 

Although opportunities in the metaverse may appear limitless, there are still a number of risks for buyers to consider, including … 

Scarcity: Property value in the real world is driven by scarcity, or a finite quantity of available land. Currently, there are a set number of parcels on the major platforms, but as demand in the metaverse grows, platforms could elect to create more virtual land, devaluing each parcel. 

Governance: In the physical world, government agencies set zoning ordinances that control land use and building codes. If there are no restrictions on the use of each parcel, then investors need to be aware that a neighboring parcel can either create the exact same structure next door or use the adjacent property in some disruptive way. Presently, there is no way to file a complaint against an adjacent property owner that is creating a virtual nuisance. 

Security: Although landowners and investors in the metaverse will never physically set foot on their property, many of the same risks associated with landownership apply. Real world landowners are charged with protecting guests that come onto their property and protecting their property from encroachments, trespassers, and adverse possessors. It remains to be seen whether – and how – landowners will need to address such risks. 

Insurance: Landowners in the physical world purchase insurance to protect their property, as well as insure against claims by visitors to the property. In the metaverse, insurance could be needed to not only protect the virtual property but other rights like intellectual property, as well as to protect against cybercrime like phishing and ransomware attacks. Additionally, buyers in the real world can buy title insurance to provide protection on their chain of ownership of a particular parcel of land. Currently, there is no way to insure ownership of an NFT or other virtual asset.  

Tax Consequences: The IRS has issued little guidance on how to treat the sale of an NFT. The majority of tax experts believe that profits derived from the sale of NFTs should be classified as ordinary income (subject to a tax rate as high as 37 percent). However, some argue that NFTs should be taxed more similarly to art “collectibles,” which come with a different long-term capital gains rate. Additionally, determining an NFT’s estimated worth depends on a combination of factors: floor price (which means the lowest price a buyer would pay for a particular token), overall demand for the NFT and the scarcity or limited availability of such NFT. In short, until the IRS provides clearer guidance, owners will struggle with understanding the tax ramifications of buying and selling NFTs. 

There is a lot of excitement surrounding the metaverse, including from a real estate perspective. However, like all new technologies, there are both financial and legal risks for early investors. Although there is still a lot of work that needs to be done to create the true framework of the metaverse, there is tremendous potential for companies and investors, alike. 

Robert Koonin is a Partner at ArentFox Schiff who focuses on a wide array of real estate and finance transactions across all property classes. 

Dan Jasnow is a regulatory attorney at ArentFox Schiff who helps clients protect and promote their brands. 

Kinnon McDonald is an Associate in ArentFox Schiff’s Washington, DC office.

Valentino has settled a legal battle over the lease for its sweeping store on Fifth Avenue in New York. In a joint statement on Monday, the Italian fashion brand and its former landlord 693 Fifth Owner LLC confirmed that they reach an “amicable settlement” in connection with their respective lawsuits, that both parties are “satisfied,” and that Valentino’s lease for the Fifth Avenue store “will be terminated.” The statement comes almost two years after Valentino filed a lawsuit against its then-landlord in a New York state court, alleging that its business in the four-story midtown Manhattan boutique “has been substantially hindered and rendered impractical, unfeasible and no longer workable.” 

Filing suit against 693 Fifth Owner LLC in June 2020, Valentino argued that “the current social and economic climate, filled with COVID-19-related restrictions, social distancing measures, a lack of consumer confidence and a prevailing fear of patronizing, in-person, ‘non-essential’ luxury retail boutiques,” has prevented it from operating its store as usual, something that it does not see changing in the near future. As such, the complaint pointed to a provision in the parties’ lease, which started in August 2013, that mandated that it use the retail space in a manner that is “consistent with the luxury, prestigious, high-quality reputation of the immediate Fifth Avenue neighborhood.”

This was made impossible as a result of the global health pandemic, according to the Valentino lawsuit, which set out claims of impossibility of performance, rescission based on failure of consideration, constrictive eviction, and declaratory judgment for frustration of purpose, and argued that it was unable “to offer in-boutique retail sales, or associated services such as fittings.”

In a loss for the fashion brand, Justice Andrew Borrok of the New York Supreme Court granted 693 Fifth Owner LLC’s motion to dismiss the complaint in February 2021, holding that the parties had “expressly allocated the risk that Valentino would not be able to operate its business” in their May 2013 lease agreement, making it so that Valentino is “not forgiven from its performance, including its obligation to pay rent by virtue of a state law,” and prompting an appeal from the fashion brand. At the same time, 693 Fifth Owner initiated a separate – but related – lawsuit of its own against Valentino, in which it accused the brand of breaching the terms of the lease by abandoning the space in December 2020 and failing to pay rent even before that, while also allegedly failing to repair damage to the property. 

Despite Valentino’s claims that it was damaged significantly as a result of the pandemic and resulting lockdowns and marked drops in luxury goods sales, 693 Fifth Owner argued that the brand blamed the pandemic in order to get out of the lease, when in reality, the brand “had been suffering since well before the COVID-19 pandemic,” and has opted for a smaller – and less expensive – lease at 135 Spring Street. 

With the foregoing in mind and given the property damage that was allegedly caused by the brand, including “sizable holes” in and paint on the Venetian Terrazzo marble panels within the store space, 693 Fifth Owner sought more than $200 million in damages – $15.3 million for the damages and rent lost during the time that repairs were being made, $6.6 million for unpaid rent between September 2020 to February 2021, and $184 million in rent for the rest of the 16-year lease’s duration. 

The terms of the parties’ settlement have not been disclosed. 

As for a Valentino lawsuit that is still very much underway, that would the high-stakes case it initiated against Mario Valentino back in July 2019. In a status report filed with Judge John Kronstadt of the U.S. District Court for the Central District of California in January, lawyers for both of the Italian brands revealed that proceedings are currently underway in federal court in the U.S., as well as in Italy – and in one instance, will require at least two more years to resolve. The latest update from the like-named but unaffiliated brands comes two and a half years after Valentino filed suit against Mario Valentino in the U.S., accusing it of breaching a co-existence agreement they signed more than 40 years ago in an attempt to avoid legal complications stemming from their nearly-identical monikers.

The case is Valentino USA, Inc. v. 693 Fifth Owner LLC, 652605/2020 (N.Y. Sup).

Virtual real estate is booming. In December 2021, one buyer spent $450,000 on a plot of land in rapper Snoop Dogg’s virtual world. Which begs the question of what will be built there. In the physical world, cities are shaped by innumerable forces. Some are desirable, designed in conversation with local communities. Others are not, subverting building regulations for financial gain. By contrast, space (and real estate) in the metaverse – the version of the internet comprising immersive games and other virtual reality environments – has so far been smooth, clean and very ordinary. This is despite its links to emerging, “disruptive” technologies such as cryptocurrencies.

While designing virtual worlds gives people a creative voice, it can also reveal the infinitely more complex social, societal and historical ways by which physical places are formed. Against this background, it is worth considering how architects can use virtual environments to enhance understanding about real-world cities, and how metaverse designers need to be similarly mindful of the social effect their designs will have.

People have always imagined cyberspace to look like a version of real urban space. In his 1992 novel, Snow Crash, American sci-fi writer Neal Stevenson was the first to imagine the metaverse, built along what he called the Street. In his world, this grand boulevard wrapped around the globe, but was nonetheless presented as a typical urban thoroughfare, lined with buildings and electric signs. Recent ads from Facebook’s parent company Meta suggest Mark Zuckerberg’s vision for the metaverse is not much different.

As a visitor, you stand in front of an impossible landscape where snowy woodlands meet tropical islands, but the built structures are minimalist villas and wipe-clean space stations. It looks more like a spatial mood board of random “cool-looking” imagery. Zuckerberg’s metaverse world acts more like a desktop background rather than as a considered, spatial environment.

Meta’s Horizon Worlds is a social platform where users have a set of tools with which to create and share virtual worlds. Ads here feature users’ avatars walking through food halls or seated in train dining cars, all designed to look like their real-world counterparts, but rendered in a simplistic graphic style, like a children’s TV show. 

Practical (yet unnecessary) design elements including streetlights, plug sockets and window frames underline the urban nature of these sterile, virtual spaces. This chimes with the generic global minimalism that American journalist Kyle Chayka has termed “airspace,” that ubiquitous aesthetic (wooden benches, exposed brick, industrial light fittings) found in coffee shops, offices, and AirBnB apartments across the globe.

Urban Planning in the Metaverse

While Meta’s promotional vision for metaverse worlds is a series of distinct snapshots, other metaverse platforms such as DecentralandThe Sandbox and Cryptovoxels feature some level of urban planning. Like in many real-world cities, they use a grid system with plots of land distributed on a horizontal plane. This allows for property to be easily parceled and sold. However, many of these plots have remained empty, demonstrating that they are primarily traded speculatively.

In some instances, content – namely, buildings, and things to do, see and buy within them – has been added to plots of land, in an effort to create value. Virtual property developer the Metaverse Group is leasing Decentraland parcels and offering in-house architectural services to tenants. Its parent company, Tokens.com, has virtual headquarters there, too – a blocky sci-fi-style tower, in an area called Crypto Valley. Like many other metaverse buildings, it serves as a giant spatial symbol, designed to draw people towards it.

Other Decentraland structures include a dive-bar recreation by Miller Lite and a neon shrine promoting Japanese virtual diva Edo Lena. There are also countless white-cube art galleries selling NFTs (digital certificates linked to artworks), such as that by mlo.art. These structures look just like real-world galleries, but simplified and de-contextualized. 

Referential Architecture

In his 2012 book, Building Imaginary Worlds, media theorist Mark JP Wolf says that fictional worlds often “use Primary World [i.e., real world] defaults for many things, despite all the defaults they may reset.” In other words, because everything in the metaverse is built from scratch, technically you do not actually have to reference the real world in your designs. But many people choose to do so anyway. They plump for familiar architectural characteristics in their virtual buildings, because it makes it easier for participants to feel immersed. 

Research shows how this is also how artificial worlds have been created in real life. Art historian Karal Ann Marlin describes the built environment of Disney’s theme parks as “an architecture of reassurance” where reality is “plussed,” that is, elevated in ways that makes it feel both new and comfortably familiar. Another place to find such “plussed” architecture is Las Vegas. The Nevada city has been described by urban historians Hal Rothman and Mike Davis as a vast laboratory. Corporations there have created urban spaces as collages of other cities, such as Paris and New York, in a bid to test “every possible combination of entertainment, gaming, mass media and leisure.”

Real cities are now choosing to emulate themselves in the metaverse. South Korea’s Metaverse 120 Centre will provide both recreational and administrative public services. The project is one of the few metaverse initiatives primarily led by a government, as part of the nation’s digital new deal for public digital infrastructure. The aim is to nurture smart city technology, preserve and showcase heritage and host cultural festivals.

Research shows that the design of public urban spaces has evolved alongside the way people behave within them. Likewise, the success of the metaverse – whether people use it or not – will rely heavily on the environments that are created. Virtual spaces need to be convenient for people to access and engaging enough for them to return to. They also need to harness and extend what makes them different from physical spaces. Simply transplanting real-world logics of property development and trading into the metaverse might recreate the social and economic stratification we find in real-world cities, which undermines the metaverse’s emancipatory potential. 

Luke Pearson is an Associate Professor at Bartlett School of Architecture and Faculty of the Built Environment at UCL. Sandra Youkhana is a Lecturer and PhD student at The Bartlett School of Architecture and Faculty of the Built Environment at UCL. (This article was initially published by The Conversation.)