Metaverse 101: Founder Explains the Success of The Sandbox Metaverse. Interview with Sebastien Borget, Co-founder & COO, The Sandbox (Metaverse Platform)

Transcript

Nick Abrahams:
Hello everyone. Welcome to what is the Metaverse and why should I care? Now the Metaverse is an essential element of what is known as web three or the embodied internet. For those of you that have seen the movie Ready Player One, you’ll have a bit of a sense as to what the Metaverse is all about, but it’s more than just fiction. In fact, it’s so important that Facebook changed the name of its parent company from Facebook to Meta, and they have over 10,000 developers building out Facebook’s version of the Metaverse. Fortune magazine said just recently that the Metaverse was the most important tech trend since the iPhone. I’m delighted to have our guest here today to explain the Metaverse to us. It’s Sebastien Borget, who is the co-founder and chief operating officer of The Sandbox. The Sandbox is one of the leading Metaverse platforms. With that, Sebastien, thank you very much for joining us here in the real world.

Sebastien Borget:
Thank you Nick for having me. It’s a pleasure.

Nick Abrahams:
What would be great to start off with is we hear a lot about the Metaverse today. Could you give us a sense of what is your interpretation of that term? What does it mean when we talk about the Metaverse?

Sebastien Borget:
In simple terms for us, the Metaverse is this myriad of digital world, digital part of universes where us human beings can get to enjoy, participate, engage through social, immersive, playful, fun experiences, and all of that through just a 3D avatar that is a representation of ourselves. The Sandbox is one of this virtual world that’s contributing to developers and we are taking a fresh approach to it by being this virtual world that use blockchain technology and NFTs in order to enable the users to truly own their identity, to truly own their asset and their currency so that they can actually, if they choose to, also transfer this identity into other virtual world and then enjoy this concept of open Metaverse.

Nick Abrahams:
I mean it is fantastic. I think a couple of key points that you talked about there seems to be what distinguishes the Metaverses we talk about today and what The Sandbox is doing from say what we’ve had previously, particularly with virtual worlds like Second Life which sort of burnt pretty bright and then sort of burned out a few years ago now. Can you sort of hone in on why is it different now? What’s changed?

Sebastien Borget:
There’s many factors I think that can explain what’s changed, but you’re right. Over the past 25 years we’ve already seen Second Life and then we’ve seen World of Warcraft, Roblox, Minecraft, Fortnite, Meta. All of these are just virtual world. They are closed economies, closed environments where yes, users can enter them through an avatar, just like I said before, but they are locked in into those environments with their avatar. With the time they spent on those worlds, everything they do, everything they earn, everything they spend onto with real money is actually not theirs. It’s locked on the platform. They cannot transfer it to another users. They cannot sell it somewhere else than on those platform.

Sebastien Borget:
Even worse, anything they do or they actually create, so they spend time into creating amazing content that contributed to the success of those large virtual world, it’s actually not theirs. This is, I think, one of the key difference in Sandbox. Anything you as a user entering this virtual world through your avatar make is truly yours and you get to own it and you get to keep 100 percent of the value you generate from this creation when you want to sell it on the marketplace or when you want to use it to build your own world.

Sebastien Borget:
Also, I think something quite important is what you’re going to experience in the Metaverse versus those centralized virtual world. Second Life was mostly a place designed for commerce in a way. A lot of brands establish their shop and in a very transactional approach with users, not very fun in our opinion.

Sebastien Borget:
The Sandbox is aiming to replicate a lot of the activities we are seeing in the real world already like attending a fashion show, attending a virtual concert, discovering an art gallery or museum, but also playing games, socializing with other users, dancing at clubs and so many other things that are not only designed by our teams, but more and more importantly designed 90%-99% by users and the last 1% by major brands and IPs entering Sandbox.

Sebastien Borget:
For us is really important the idea of experience of fun and ownership and that we think is something that differentiates. We also have virtual lands that not all those virtual worlds are. Sandbox became actually very much known for its virtual real estate. Any land parcel that is, we have a map of 166,464 lands in total. Each one is actually a NFT on the blockchain and it can be owned by the users. Users own a piece of that world that they contribute to build and they can monetize it through renting it, through publishing content, and contributing to growing the world, growing the network behind.

Nick Abrahams:
Fantastic. We will come back to the virtual land because I think it’s a fascinating area and that’s certainly an area of massive difference to what we saw with Second Life back in those days. Maybe just to give people a bit more of a sense of this because I think one of the concerns is, well, I mean, do I need a virtual reality headset? I guess who is in The Sandbox? What’s your demographic? Who’s in there and what are they doing and what sort of technology do they need to actually enjoy The Sandbox?

Sebastien Borget:
That’s a good question. I’m really excited that the community that’s already owning land and contributing to Sandbox, we are now close to 19,000 unique landowners who are participating to build that world. We have members from almost any country in the world. Majority in the US, but Sandbox top tier countries are Korea, Japan, China, Indonesia, Thailand, Philippines, India, Turkey, Italy. It’s a very diverse virtual world already where we have a lot of culture also coming from brands, both the physical world so some of them you can see behind me. Let’s mentioned Snoop Dogg, Warner Music Group, Atari, Adidas, The Walking Dead, Care Bears, Smurfs. Just a few of the one that’s been announced to date.

Sebastien Borget:
Fantastic communities as well that come and are born from this web free ecosystem including Binance, Coin Market Cap or bought atypically as World of Women or [inaudible 00:09:00]. Many of those NFT collections as well that are enjoying the true ownership that are enjoying also interoperability, one of the feature that blockchain enables to actually give life to their NFTs. Add more utility to them and come to Sandbox to create first and then play, engage, and play to earn afterwards.

Sebastien Borget:
We are mostly aiming at the adult children so far with users between 25 to 45-years-old so that’s also important as a differentiator versus Roblox and other virtual world that skew to our much younger audience. We’ve just passed 2 million registered wallets so Sandbox is one actually of the leading growth engine for adoption of web free in general. That’s still a small number of users compared to the hundred millions of users [inaudible 00:09:57] but just think that a year ago, some of the largest blockchain-based services application, they roughly had 10,000 users at pitch and it was being in the top. So it’s fantastic to observe that growth, to see all the community empowerments that comes through the ownership of the digital asset and tokens and how Sandbox is growing fast today.

Nick Abrahams:
Right. So that is amazing growth. It’s the 19,000 landowners: that is spectacular. So congratulations. So just this interoperability, which I think is very important for people, and maybe goes some way to explaining the current NFT craze. Let’s say, for example, I have a spot of luck and stumble across one and half million dollars and buy myself a Bored Ape NFT. Would I be able to bring that into the Sandbox? How does it work? I think people don’t understand why NFTs are priced the way they are. Maybe just a little bit of a sense as to, what does it mean to own an NFT and within an environment like the Sandbox?

Sebastien Borget:
That’s one great example. Bored Ape, they are probably one of the most important, most cultural and creative community to date. Let’s take just, what is a Bored Ape? Bored Ape is initially a collection of characters, set into a world map and an environment. They launch this collection, we call them 10,000 collection, because there is effectively 10,000 unique 2D images characters with different traits and attributes that makes them more rarer for certain.

Sebastien Borget:
Effectively, they are just images at the beginning. You cannot use them into games, et cetera. You can just have them in your wallet. You own them. So if you have in your wallet you can exchange them, sell them. Or use them to display them over social media profile picture, et cetera. What Sandbox is aiming to do is through interoperability to look through your wallet, the same wallet that you use to connect with Sandbox. So that’s part also of being in Web3: your identity is the same across and you connect to value stats. We recognize your Bored Ape and we will recognize a lot of other NFT collection. And we will give you a 3D equivalent representation of that same 2D image that you have. And that 3D representation, it’s a game character. It’s a new avatar in Sandbox, which then you can use to, I don’t know, to work, to chat with other, to dance. They have some 60 plus animation already from the get go. To fight against enemies. To jump around and do other cool things. And that can keep being improved over time.

Sebastien Borget:
And I think it’s exciting because it was not made by the Bored Ape community or Bored Ape creators, Yugo Lab. It’s made by Sandbox to add more value to those NFTs. Because suddenly from the 2D image, you have the possibility to play to a 3D virtual world with that. And Sandbox is more than just a 3D virtual world world as you chatted [inaudible 00:13:27]. It’s a user generated content platform. We provide amazing creative tool, Voxel, to make 3D asset. Game Maker, which is a no-code software where you can just drag and drop to start creating interactive games and experiences. And the map where Bored Ape has lands, but people can become the virtual neighbors of Bored Ape to build together this environment.

Sebastien Borget:
So in a way, Sandbox provide the world, the place, the environments, the tools where some 2D collections, NFT collection, can come to life. Allow their owners to become more creative, to build a world. And I think it’s important. Some people start to say, Sandbox is a digital nation. Or NFT collection is a new way to create IP. It’s the next Disney is actually being made starting from characters and in a Web3 this socialized environment. There are other tools and other community members that will build the world, build the story, and adventure of those characters.

Nick Abrahams:
Fantastic. So you mentioned a few big brands before. Obviously Snoop Dogg, you famously… He was a very early buyer into the Sandbox, but also Adidas and Warner Music. And then interestingly, PWC, one of the big four, big professional services firms acquired a plot in the Sandbox. So could you give us a sense… And many of our listeners and viewers will be people within large organizations who will be wondering what are the opportunities within the metaverse, and particular platform like the Sandbox, for their organizations. Could you just talk through a little bit why are folks acquiring land and building out experiences in the Sandbox?

Sebastien Borget:
There’s many various reasons why you want buy land. But I would say that a few of them, being present into the metaverse, owning land is the first step to being present in the metaverse. And show that to the world through your logo on the map. That’s also one of the success recipes of Sandbox. On the map, to reinforce the idea of ownership, you can display your logo and you can let the community buy land around yourself to become essentially your virtual neighbors. They are just one walk away in the 3D world with avatars from your land.

Sebastien Borget:
There is also this Web3 is very community driven and user centric. Web2 is designed around… Unfortunately, it became a machine at collecting data and using that data to serve you more ads or to sell you more product. A very transactional at the end of the day, again. Web3 is oriented to run not trying to sell more product, but feels around to create more engagement, more meaning for users toward the brand they’re a fan of, or they choose to stay engaged with. And that means with creative tool that even a company like PWC can create a place where they can engage with their customer in a different way.

Sebastien Borget:
Also, since many of their clients come and want to invest, to learn, to own a piece, to have digital asset, et cetera; it makes a lot of sense for them to actually be an actor in the space. How can you advise someone if you do not own yourself? You did not try the tools. If you did not go through the whole journey of what it is like to own the land and participate into this our Web3 [inaudible 00:17:07]. That’s why I think they’ve been one of the leading and pioneer company to jump and start there.

Sebastien Borget:
But they are not the only one kind of companies that are not necessarily entertainment, sports, music, celebrity, or gaming that enter the space. We are seeing such a great diversity of partners, of culture, essentially, that’s present. And you have wellbeing related companies. You have coaching, education, as well. A topic I’m really attached to: how do we create more engagement and reward people for learning? Learning new skills, typically, in the metaverse and make it a revenue from their time, their engagement, the content they contribute to.

Sebastien Borget:
So there’s no definite answer to what can we do in the metaverse. It’s ongoing. It’s really early days in the way. And that’s what’s also make it a very exciting space to be in. You get the chance to really redefine who you are as a company. What you create is greater. And then who you are as your identity through that avatar. It’s really opening interesting new perspective for everyone who wants to join into the space.

Nick Abrahams:
You mentioned the idea of education. And I know one of the metrics that you’re very proud of is that you’ve created over a thousand jobs with the Sandbox. Can you give people a sense of how is that so? What jobs are they and who are these people? What are they doing?

Sebastien Borget:
Yes. And we hope to keep creating millions more. Not only in Sandbox, but I think in the metaverse in general, there is an opportunity for millions of jobs to be created. Again, going back to the definition. It’s a set of a virtual world where users can engage and transfer their identity and belongings from one to an another. Those world, they need to be built. Originally, they’re all empty. They are not replicating the physical world. They’re all thing that come up from our imagination. So you and anyone else can come and start contributing to this large scale effort of populating the metaverse. Populating it with content. Populating it with people.

Sebastien Borget:
So that’s why the creator economy will be thriving again in the metaverse. Because we are going to need so many architect, designers, fashion designers for avatar, novel designers, game designers. People who are creating those space where we socialize, where we see experiences that go beyond our imagination and make us dream again. And we’ll need people as well, I think, being present, engaging with other, chatting with others, making this place fun and alive is also as valuable and should be rewarded. That’s why they are play to earn mechanics in a platform like Sandbox and other decentralized games. And it also enables new businesses like selling virtual land, so virtual real estate order. Curator for looking at content made by the community and helping for discovery and selling it. Coaching, et cetera.

Sebastien Borget:
Even player is now turning into an activity that can generate an income. Basically the definition of a job. If I’m playing one hour into a land, a game that, don’t know, rewards me with a certain NFT. A ghost world. There’s only 100 copy in the world of that digitals world. And on the market places, it can be sold for $100. I effectively made $100 an hour after playing if I sell it. And that’s basically the beginning of a whole economy.

Sebastien Borget:
Now, that’s what also is important in Web 3.0. all the digital assets also NFTs. They can hold values, they can be sold. They are allowed to create services, sands like jobs behind and just all the ingredient for digital economy. We have 50 plus two jobs who started in the last six months from being one single person studio, to now becoming 10 to 20, some 40 people studios who help the 19,000 landowners to build their content. Or they help big brands to enter the metaverse and create those amazing experiences.

Sebastien Borget:
They are from around the world, from Korea, from France, from Japan and other location. It’s also exciting as well to have such a great diversity. Some are led by women as well. We actually launched recently the metaverse accelerator. It’s a $15 million program that will be supporting 40 entrepreneurs and startup as well, to build not just content, but to build businesses and the services that will allow Sandbox and Web 3.0 ecosystem in general as well to grow. We are doing our best to keep pushing for those initiative and support with our foundation as we want the ecosystem to grow. We will grow and accelerate it with together.

Nick Abrahams:
Now, I think there’s a lot of parents who might have been listening to what you had to say. They will be very pleased that now they can actually monetize their children’s game time with play to earn. But it is a big change, isn’t it, which the metaverse and the Sandbox creates the idea of play to earn.

Sebastien Borget:
There will be great parents, very forward thinking. Because, well, I think probably your generation and mine, we were told, “Stop playing games. It’s actually not an activity that will lead you anywhere.” But though I think those are valuable skills and these are some of those skills that they will never be taught at school.

Sebastien Borget:
Actually, you can now learn through gaming a lot of complex financial concept from the idea of yield generation from utilizing game attempts, NFT, selling, trading, renting, sometimes staking as well. I think kids understanding the principle of staking NFT and APY, who would guess that? And that’s just some of the amazing things we’re seeing. Yeah.

Nick Abrahams:
And some of those things that Sebastian has just talked about it, draw from the world of DeFi and decentralized finance, which I know the Sandbox that is very engaged in. But concepts of staking cryptocurrency, and so forth, are completely foreign, I think, to most people. And yet, in the Sandbox you’ve created that conceptually. And so people can actually experience it in a simpler way. Is decentralized finance and that concept, I guess it goes along with the ownership of digital assets and so forth, is that a big part of the roadmap?

Sebastien Borget:
It is. We don’t claim any credit for, I mean, inventing the concept of staking.

Nick Abrahams:
No, no.

Sebastien Borget:
It’s been there, but what’s interesting is, it was mostly applied to staking a cryptocurrency. And so by contributing to reducing the amount of supply available on market, culling the circulating supply, you help to stabilize, I would say, the currency from its fluctuation, roughly speaking.

Sebastien Borget:
The idea of applying it to NFTs and applying as well, I think is important. Because well, in a market, which is more or less liquid, where there is less server of a certain item while the demand keeps being high, is contributing to make those items more valued. People will want those items, but not from the pure speculative aspect. I think it’s really built in with the utility behind and the demand that comes from gambling.

Nick Abrahams:
Great. Just so we’ve talked to about virtual land. And congratulations, because we were talking before about, so CNBC reported that there was over $500 million of virtual land sales last year. And I think they identify the Sandbox as the leader in that, with over 60% of those sales. I mean, we know there’s been a virtual land boom. Could you talk us through, how does that work for people who don’t understand what that means? How would they get involved in virtual land investment?

Sebastien Borget:
You’re right. I was looking at the later start, we’re almost at $400 million GMV by Sandbox over its lifetime. Last year, the overall virtual real estate market was half a billion dollar of exchange. People might wonder, why is virtual land valuable? And why would people want to buy it? It essentially works the same as physical property and physical land.

Sebastien Borget:
You own a location into a virtual world, where that location, you can actually generate a revenue from. Either to rent it to other creator, or by building it yourself, or hiring a specialized builder creator for hire. And launching your own business, like launching a game, launching an experience, something that will help you to monetize through a NFT ticket or selling content as NFTs typically, that you use into your game.

Sebastien Borget:
Now, okay, property development. Except that in the metaverse you can build things so much faster. We are just talking in a matter of hours, days at most, weeks maybe, for the most ambitious project. You have access to a very creative tool that allows you to make things beyond the laws of physics, beyond imagination. Really cool, fun, culturally relevant, amazing. Almost for me, can become a virtual shows.

Sebastien Borget:
And you have access to a global audience, people from Korea, from Japan, from US, from Europe, they can come with their avatar, visit it, engage with it. You can launch your community. Through the token, you engage them. And the community of other NFT holder are going to contribute as well to support and build that together.

Sebastien Borget:
That’s some of the exciting possibilities behind, versus the physical world where it takes months, years, sometimes decades to build cool things. You have a lot of complex administrative paperwork. And you are very limited to the reach of the audience, depending on where you actually buy. Which city, which country and so on. Those are very comprehensible things.

Sebastien Borget:
The second factor is also the current, I think no one is supposed to ignore. But it’s getting harder and harder for the middle class and the younger generation to actually buy their first apartment, their first house. The median age to become a owner of property is moving towards 40 plus. Whereas, maybe two generation before, our parents were able to buy it when they’re 20, 30s.

Sebastien Borget:
And we think since the pandemic, there’s a generation and yourself, we’re spending more time into virtual world and online initially. We are not looking at the same. We no longer have the same aspiration and we no longer need to have physical property. If actually, the place we work, we play, we engage, we socialize and more, is online and those have utility. And we use it every day and we start to be part of that space through our avatar and accounts. And we understand it.

Sebastien Borget:
We are becoming more native to the space and it makes sense that we want to own a place, a location where we can have a host, or host parties, or build a place where we want to generate an activity, well, rather than in the physical world.

Nick Abrahams:
I noted that I think it was reported that three people had paid over a million dollars to be Snoop Dogg’s, neighbors. I don’t know. Is that a good place to be? Is it loud being next to Snoop Dogg? Or in the virtual world it’s going to be quiet?

Sebastien Borget:
Well, so that’s another aspect. You have the choice of the location. Not all property, not all land are worth that range. It’s still very accessible with the smallest one by one, which is still one hectare of the actual space. Accessible for about 1,000 cents. Roughly 3,000, $4,000, but there are key location that are unique being and some people would value them more.

Sebastien Borget:
People will value that being the direct driver to Snoop Dogg is actually going to be a place with more food traffic for avatars, and probably more famous people around will hang out at Snoop mentioned. Since Snoopy is going to host his virtual concert, as he’s mentioned, have probably friends from his real world network, celebrities, older artists, et cetera.

Sebastien Borget:
It makes sense indeed to… It’s almost like having a restaurant at Times Square versus a restaurant maybe into another location that’s less hyped. At least initially, but anyone can build the next Times Square, the next landmark, next monument, the next concert hall, et cetera. Well, in the manners. There’s also this re-definition. Anyone can choose the value and the way they… We have all the personal way to appreciate what’s valuable to us. And that’s what I want to say. And for some, this location for Snoop Dogg is important.

Nick Abrahams:
And just to move on to, I know a subject that’s very important to you. And you talked about creating the open metaverse. And as we know, there are a number of big technology players who are building aspects of the metaverse themselves. Can you talk a little bit about, well, conceptually, the open metaverse verse a closed metaverse?

Sebastien Borget:
Well, going back to what my introduction. I’d say the true metaverse can only be open. It can only be true to the definition if users, through their avatar from their identity, can actually take that identity from one to another. And not be locked in by the platform that own their data or capture all the value they bring into it. That’s essential. That’s it. Anyone else who’s not into using this technology and not enabling their users to be free in a way, to move, free to own and not supporting those digital rights, cannot really claim to be metaverse.

Nick Abrahams:
Yeah. Yep. Great. And maybe just a final question, which is really just for folks. How should they get started? And what’s happening with the Sandbox and access to the Sandbox and so forth?

Sebastien Borget:
There’s so many ways to get started in Sandbox. First of all, you do not need to buy anything. You do not need to buy any land, et cetera. You can just download the creation tools, for example. Try it for yourself, create your content. And only at the very last time, if want to publish on the map, you need a land ultimately, to make it public for others to visit.

Sebastien Borget:
But until then, owning the land is just a matter of maybe securing the spot at a certain location on the map maybe before it’s gone or before it’s someone else bought it. You can also engage in Sandbox as a player rather than a creator or an artist or a land owner. We have regular play to earn seasons. The next one will be launching around end of February. You can also just be involved, like we mentioned, as an investor or holder of the token of the platform, sand and staking it. It’s valuable for the economy and you helping in certain as well without being any of the other that are, in other profile.

Sebastien Borget:
That’s also interesting. The platform allows so many different ways to contribute. You can just come to earn a revenue as being a community manager into experiences, and being a curator. And being a virtual real estate broker facilitate saving that parcel. Those are jobs, there’s even jobs to invent. And I’m looking to more creativity and more ideas, or how you want to engage in the metaverse.

Nick Abrahams:
Fantastic. Well, Sebastien Borget, thank you very much for your time. Your enthusiasm is palpable. And in fact, I think your real humanity also comes through and it comes through in what your intentions are for the Sandbox. And so, thank you all very much.

Nick Abrahams:
I would encourage everyone who’s watching, listening to have a look at the Sandbox. It is quite a remarkable experience. You don’t need virtual reality gear or anything that. You can get straight in and it’s really great fun. And just fascinating. Sebastian, we wish you all the very best. I know it’s been a great run so far. I’m sure it will continue to go incredibly well. Thank you very much.

Sebastien Borget:
Thank you, Nick. Thank you, everyone, for watching and hopefully see you in the metaverse.

Nick Abrahams:
Great. Okay. That’s fantastic. Thank you. Could I just do a selfie just with you there on screen?

Sebastien Borget:
Yeah.

Nick Abrahams:
I’ll just see if I can make this work. And so, here we go. Thank you. That was fantastic. I really appreciate your time. I think that…

Sebastien Borget:
Nice.

Nick Abrahams:
And just one last time.

Sebastien Borget:
Okay, go again.

Nick Abrahams:
Perfect. That is great. Thank you very much for your time. Great. Really appreciate it. And I will let you know when it’s coming out and so forth. But best wishes with everything and thank you very much. I’m a happy holder of sand. It’s performed well. It’s great. I’m very pleased. Thank you. Good luck with it all.

Sebastien Borget:
Thank you. I hope we get to do that selfie in person. One day I’ll come visit Australia.

Nick Abrahams:
That would be great to see you. Please do come out. We’d love to see you. Okay.

Sebastien Borget:
Bye-bye.

Nick Abrahams:
Thanks, hey. Bye-bye.