Avatars: Shaping Digital Identity in the Metaverse

Avatars are a building block of the metaverse. This report explores the central role avatars play in digital identity, providing users with infinite possibilities for expression, communication and representation.  It explores  how users can create and control their digital  identities through avatars, enabling them to use the metaverse across different platforms and applications. The report also examines avatar markets and their size, including the use of 3D avatars in virtual worlds  and the emergence of digital asset  emotes  as  new forms  of expression.  Finally,  it considers the important role that avatars and digital identities will play in the development of an open, inclusive and interoperable metaverse of the future.

Avatars are one of the essential building blocks of the metaverse and are the theme of this report. While this is by no means an entirely new topic—avatars having been used in virtual worlds as early as the 1970s—the emergence of Web 3.0 and blockchain- based   digital   economies   enables   new  ways   of creating and using avatars and enjoying the economic benefits of digital creations.

This report investigates avatars and their role for the digital identities of metaverse users. Following a  brief  exposition  of  the  thematic  pillars  of  the metaverse, we introduce avatars, their history and their different types. Next, we provide an overview of the meaning   and   relevance   of   avatars,   discussing motivational patterns of avatar creation, how avatars influence user behavior and how avatars in Web 2.0 compare to those in Web 3.0.

We provide an overview of Web 2.0 avatar markets to   gain  an   impression   of  the   phenomenon’s current economic significance. Avatar markets exist on a variety of online platforms, including social media sites, online games, and virtual worlds. These markets allow users to purchase virtual items such as clothing, accessories,  and  other  assets  to  customize  and personalize their avatars. Examples of avatar markets include online games like Fortnite and Roblox, which offer virtual items for purchase to customize avatars and enhance gameplay. These markets have proven to be highly lucrative, with Fortnite alone generating billions  in  revenue  from  in-game  purchases.2   The entire avatar market is predicted to exceed $500 billion by 2030.1

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About The Sandbox
The Sandbox, a subsidiary of Animoca Brands, is one of the decentralized virtual worlds that has been fueling the recent growth of virtual real estate demand, having partnered with major IPs and brands including Warner Music Group, Ubisoft, The Rabbids, Gucci Vault, The Walking Dead, Snoop Dogg, Adidas, Deadmau5, Steve Aoki, Richie Hawtin, The Smurfs, Care Bears, Atari, ZEPETO, CryptoKitties, and more. Building on existing The Sandbox IP has more than 40 million global installs on mobile, The Sandbox metaverse offers players and creators a decentralized and intuitive platform to create immersive 3D worlds and game experiences and to safely store, trade, and monetize their creations.