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AI & VR in Web3: Immersive Experiences & Gaming

AI & VR in Web3: Immersive Experiences & Gaming

Discover artificial intelligence and virtual reality's roles in the nascent Web3 ecosystem and how they might impact gaming, entertainment, and other areas.

Web3 represents a new paradigm and approach to online human interaction. Rather than passively consuming content, Web3 enables everyone to actively participate in creating unique experiences while maintaining ownership and control over their data. And these new capabilities involve new technologies ranging from blockchains to artificial intelligence and virtual reality.

In this article, we’ll quickly recap why Web3 is about more than just tokenizing the internet and how artificial intelligence and virtual reality could play a role in creating more immersive and engaging experiences.

What is Web3?

Ethereum co-founder Gavin Wood first coined the term Web3 in 2014. He used it to reference his decentralized and open vision of the internet’s future. It’s a more democratic version of the internet we know today, where no one person has a distinct and glaring advantage over another.

Packy McCormick, an investor who helped popularize Web3, defines it as “the internet owned by the buildings and users, orchestrated with tokens.” According to A16Z’s Chris Dixon, it combines the decentralized, community-governed ethos of Web1 with the advanced, modern functionality of Web2, freeing us from siloed, centralized services.

Blockchains are a foundational component of Web3 since they create a more decentralized, user-centric internet where individuals have more control over their data and online interactions. For instance, rather than locking your identity into a single social media platform, non-fungible tokens (NFTs) enable you to own your identity and use it across platforms.

In addition to blockchain technology, AI and virtual reality breakthroughs are arming creators with new tools that could make Web3 much more immersive and engaging than Web2. Rather than consuming content from a handful of creators and platforms, these new developments could enable anyone to spin up virtual environments and generate creative artwork and experiences.

More Immersive Environments

Virtual reality adds a new dimension to Web2. Rather than viewing words, pictures, or videos on a 2D screen, these technologies create immersive 3D environments where users can actively engage with their surroundings. For example, Decentraland is a 3D virtual world (available in VR) where users can host events, create products, and interact with each other in unique ways.

More Immersive Environments
Decentraland and other decentralized metaverse platforms are already well-positioned to use virtual reality technologies. Source: Decentraland

While these environments appeal to niche audiences today, new and cutting-edge virtual reality products from Meta and Apple are bringing them mainstream. Next-generation VR headsets could feature eye-tracking technology and foveated rendering to reduce rendering workloads and dramatically improve performance and user experiences.

In addition to virtual reality, the Apple Vision Pro will enable users to interact with content using their eyes and hands in 3D space rather than a tap or cursor on a screen. Spatial images and videos could also open the door to a new type of digital artwork. At the same time, augmented reality enables users to have experiences in real-life – rather than purely virtual – contexts.

More Accessible Creative Expression

Web3 is helping democratize the creator economy by cutting out intermediaries. Rather than creating content on centralized platforms like TikTok or Steam, creators monetizing their work on decentralized platforms can capture far more value. And they can easily take their creations across different platforms to reach wider audiences while earning commissions on resales.

The combination of artificial intelligence and virtual reality makes it easier for anyone to become a creator. For example, CSM.AI provides an easy-to-use API for creators to convert images and videos into 3D objects on the fly. As a result, creators can sidestep traditional 3D workflows that require specialized skills and a lot of labor hours.

Cutting-edge tools like 3DFY take it a step further by generating 3D objects from text prompts, eliminating the need for any videography, graphic design, or photography. In the future, product developers could meet in a VR world, iteratively generate and iterate on product designs with text prompts, and see the results in real-time before launching to consumers.

More Engaging Gaming Experiences

Web3 is revolutionizing the gaming industry with cross-platform non-fungible tokens (NFTs) and play-to-earn (P2E) capabilities. For example, Axie Infinity enables users to collect NFT-based characters and earn in-game cryptocurrency by collecting daily rewards, adventuring in PvE, and battling other players in PvP arenas.

More Engaging Gaming Experiences
Axie Infinity already takes advantage of generative traits to “breed” Axies, but AI technologies could level up these capabilities in the future. Source: Axie Infinity

Combining artificial intelligence and virtual reality could help create even more unique and compelling gaming and entertainment experiences. For example, LLMs and deep learning techniques could help create highly engaging and competitive non-player characters (NPCs), while generative AI could create unique in-game storylines, items, and content.

Combined with Web3 blockchain technologies, these capabilities could pave the way for unique generative items with varying levels of rarity sold as NFTs to players that can take them across platforms. Engaging NPCs could help solve the two-sided marketplace problem by creating engaging communities without needing a critical mass of live players.

Unique & Personalized Content

Artificial intelligence is well-suited to create unique and personalized content. For instance, imagine connecting your NFT art collection to an AI-powered generative artwork dApp that assesses your tastes and generates a unique piece of artwork tailored to you. Or imagine houses or items built to your preferences in metaverse environments or P2E games.

While centralized AI platforms are antithetical to Web3’s values, new open-source models democratize AI access and fit better with the crypto ethos. The cost of training and running these models constantly falls, which could eventually pave the way for personal models (hosted on local devices) that don’t send any information outside your network.

Web3 ecosystems could also incentivize users to monetize their data. Rather than advertisers tracking your browsing history with cookies and pixels, you could receive rewards for sharing your interests and receive AI-powered targeted offers from advertisers. Brave Ads is an excellent example of these capabilities in action already.

The Bottom Line

Web3 promises to reshape how we interact with each other and our experiences in online environments. While blockchain technologies are the masonry underlying these decentralized systems, artificial intelligence, and virtual reality are critical to the creative experiences that make Web3 more active than passive.

Of course, plenty of hurdles will surface along the way. Aside from the centralization of AI and the slow adoption of VR headsets, regulators have mixed feelings about a privacy-focused web, and tax agencies want a cut of any transactions that occur. As a result, early adopters should ensure they remain compliant with rules and regulations along the way.

If you participate in Web3 and use crypto assets, ZenLedger can help you comply with the complex web of tax regulations surrounding them. Our platform automatically aggregates transactions across wallets, exchanges, and platforms, computes your capital gain or loss, and generates the paperwork you must file annually.

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This material has been prepared for informational purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.