(VRfun18) Metaverse Cities, Crypto States:

Kelsie Nabben
9 May, 2022

This piece presents the concept of “Metaverse Cities”, as an exploration of how “crypto cities” and “crypto states” are melding with the physical infrastructure of cities to offer new potentialities in how people organise, work, rest, and play. It forms a contribution to a broader project by RMIT Blockchain Innovation Hub on “The Digital CBD”.

The Metaverse

The concept of “The Metaverse” refers to the linking of digital and physical spaces (Dionisio, et. al. 2013; Nabben, 2021) that seamlessly integrates the physical world with the virtual world. This allows avatars to carry out rich activities including creation, display, entertainment, social networking, and trading, hybridizing work, rest, and play between physical and virtual reality (Ynag, et. al. 2022). The Metaverse is not a singular place but any virtual reality (digital space) or augmented reality (physical space enhanced by a digital overlay) that is accessed through computer interfaces. This layering over of existing media forms establishes the immersive potential of a mixed media reality. The Metaverse introduces a new era in technology entrepreneurship and digital innovations, introducing new business models, and modes of work and leisure and cultural experience and expression (Momtaz, 2022). It is the next chapter for social, cultural, and economic practice across both digital and physical spaces.

Image courtesy of @cosminsurban via Unsplash

Metaverse Cities

There has been much interest in the concept of “crypto cities” and “crypto states”, occurring across both local government experiments and cryptocurrency community-led projects (Buterin, 2021; Nabben, 2021).

Some cities are already embracing the idea of the Metaverse, with spaces for interaction via VR goggles, cryptocurrency payments, and Internet of Things devices. For example, Santa Monica offers users who download a social gaming application the ability to collect tokens as they move through and a mixed-reality version of the city’s retail district (National League of Cities, 2022). In 2021, Seoul Metropolitan Government announced its intention to invest $3.3 million to become the first city to immerse itself in the metaverse, including hosting cultural events in the Metaverse to attract global tourism, a virtual city hall for citizens to interact with public officials and access services, and community recreation spaces (Seoul Metropolitan Government, 2021).

Enabling Technologies and New Experiences

The Metaverse is facilitated by enabling technologies and overlapping infrastructural components of software and hardware. Physical devices provide the gateway interfaces to the Metaverse, including Augmented Reality (AR) devices such as Ray Ban glasses, Virtual Reality (VR) goggles such as Oculus, mobile phone applications, and computers. Enabling technologies of the Metaverse include Extended Reality, User Interactivity (Human-Computer Interaction), Artificial Intelligence, Blockchain, Computer Vision, IoT and Robotics, Edge and Cloud computing, and Future Mobile Networks (Lee, et. al. 2021). These technologies create overlays of digital experiences on to the physical, or the creation of new physical spaces, through which people can experience and shape virtual worlds. Virtual spaces facilitate the consumption of virtual goods and services, business interactions, gamification, social connections, and cultural experiences.

Growth Opportunities

The Metaverse is undergirded by business interests. For example, economists have found that land valuation in virtual worlds is driven by commercial potential (Goldberg, et. al. 2021). Metaverse investor and writer Matthew Ball estimates the metaverse could be worth up to $30 trillion in the next decade (Knight, 2021). Facebook has staked the future of the company on the concept of the Metaverse, by re-branding the entire company to “Meta” (Meta n.d.). They have also pursued a strategy to acquire hardware interfaces that act as enablers for the Metaverse (such as the headwear Oculus device, and a partnership with Rayban glasses). Similarly, the parent company of the children’s toy brand LEGO have announced they are investing $1 billion into online gaming company Epic Games to help build a child friendly Metaverse that seamlessly integrates digital and physical worlds (Epic Games, 2022). A tension exists here as to whether the Metaverse will be privatised and monopolised, or publicly owned, developed, and operated (Nabben 2021). Alternative visions are being argued for and developed in decentralised technology communities of multiple implementations, openness, cryptography, interoperability, and user-driven curation of experiences (Nabben 2021; Messari 2021).

Policy Approaches to the Metaverse

Creating a vibrant Metaverse is about identifying collective visions and ensuring that we are investing in the pathways towards this now.

Interacting with the mixed media potentialities that the Metaverse affords the requires tools, infrastructure, and resources to do so. Efforts are being made to improve diversity and inclusion in the Metaverse. One example is through the presentation of a discussion paper advocating for start-ups to donate virtual space for cultural “embassies” for historically underrepresented groups (Barba, et. al. 2022). Efforts to facilitate physical and digital spaces that cultivate immersive experiences and cultural vibrancy, and that are commercially viable is a consultative and iterative process. User centric components of the Metaverse that command user determination include virtual avatars, content creation, virtual economies, security, privacy, trust and accountability (Lee, et. al. 2021). The Metaverse needs to become a place of participatory augmentation. Policy makers must advocate for citizens’ interests rather than letting the agenda be set by private companies. The Metaverse is a shared ground for physical cities and crypto projects to have conversations and take action towards ensuring open infrastructure.

The next steps in this process are identifying what infrastructural components are required to enable the Metaverse, what new products and services are made possible in the Metaverse, what business models are viable, how digital overlays and embodied physical-digital experiences enhance people’s cultural engagement with the city, and of course, who will provision these.


Thank you to Alexia Maddox for encouragement and feedback.

If you liked this, check out a full length working paper on “Building the Metaverse: ‘Crypto States’ and Corporates Compete, Down to the Hardware: http://dx.doi.org/10.2139/ssrn.3981345 or let me know @kelsiemvn on Twitter.


Barba, Bibi and Lee-Ah Mat, Vanessa and Gomez, Angelina and Pirovich, Joni. 2022. “Discussion Paper: First Nations’ Culture in the Metaverse”. Available at SSRN: https://ssrn.com/abstract=4058777 or ; http://dx.doi.org/10.2139/ssrn.4058777.

Buterin, V. 2021. “Crypto Cities”. Vitalik.ca (blog). Available online: https://vitalik.ca/general/2021/10/31/cities.html. Accessed May, 2022.

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Knight, R. (2021). Metaverse Economy Could Value up to $30 Trillion Within Next Decade. Available online: https://beincrypto.com/metaverse-economy-could-value-30-trillion-in-a-decade/. Accessed 30 November, 2021.

Lee, Lik-Hang, Tristan Braud, Pengyuan Zhou, Lin Wang, Dianlei Xu, Zijun Lin, Abhishek Kumar, Carlos Bermejo, and Pan Hui. 2021. “All One Needs to Know about Metaverse: A Complete Survey on Technological Singularity, Virtual Ecosystem, and Research Agenda.” ArXiv:2110.05352 [Cs], November. http://arxiv.org/abs/2110.05352.

Meta, n.d. “Connection is evolving and so are we”. Meta. Available online: https://about.facebook.com/meta/. Accessed 29 April, 2022.

Nabben, K. 2021. “Building the Metaverse: ‘Crypto States’ and Corporates Compete, Down to the Hardware”. Available at SSRN: https://ssrn.com/abstract=3981345 or http://dx.doi.org/10.2139/ssrn.3981345.

National League of Cities, 2022. “The Future of Cities. Cities and the Metaverse”. Available online, via: https://www.nlc.org/article/2022/04/18/how-cities-are-engaging-in-the-metaverse/.

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Ynag, Qiinglin, Yetong Zhao, Huawei Huang, and Zibin Zheng. “Fusing Blockchain and AI with Metaverse: A Survey.” arXiv preprint arXiv:2201.03201 (2022).