The First Successful Metaverse Stablecoin Predates Crypto (and Tilia Gets Investment from J.P. Morgan)

The first successful metaverse stablecoin actually predates crypto! (photo by CoinWire Japan on Unsplash)

In a five-minute YouTube video which dropped today, Amy Jo Kim speaks with Linden Lab’s founding CEO, Philip Rosedale, about a stable digital currency that powers a vibrant metaverse economy—and has kept it running for almost two decades! Of course, I am talking about the Linden dollar.

As I often like to say on this blog, Second Life is the perfect mature, fully-evolved model of a working metaverse which newer entrants to the space would benefit from studying! And whether or not you are already familiar with Second Life, Philip is always a good interview: insightful, personable, understandable, and articulate. Highly recommended!

In related news, were you aware that Linden Lab’s financial subsidiary, Tilia, has recently secured a strategic investment (amount unnamed) from J.P. Morgan Payments? According to the official press release:

Tilia LLC, the all-in-one payments platform, today announced it has secured a strategic investment from J.P. Morgan Payments. Tilia’s solution, built for game, virtual world and mobile application developers handles payment processing, in-game transactions, as well as payouts to creators by converting in-world tokens to fiat currency including USD, which serves as the backbone of any functioning virtual economy.

Drew Soinski, Senior Payments Executive, Managing Director, J.P. Morgan Payments said “We believe that contextualized commerce – such as virtual economies within games and virtual worlds – is an area perfectly positioned for innovative payments solutions to play a critical role in the coming years. We’re delighted to invest in Tilia LLC, a market leading provider of software gaming payments tools, to develop solutions for these new and exciting marketplaces.”

Tilia’s virtual payment system easily and securely converts in-game tokens and currency into fiat currency. Built from the ground up to power Second Life and its creator-based economy, Tilia was developed over several years to build its unique capabilities. Tilia has secured the required money transmitter licenses in the U.S. to support payouts, allowing for secure transactions on a large scale. Tilia provides developers with the tools to enable thriving, profitable in-world economies that empower their players and users to buy and sell virtual goods and services and facilitate robust play-to-earn programs.

“Virtual economies represent a huge financial opportunity particularly for game, app and virtual world developers,” said Brad Oberwager, Executive Chairman of Tilia LLC. “J.P. Morgan Payments, a worldwide leader and recognized innovator in payments, is the right partner as we continue to expand capabilities in line with these rapidly growing creator-based economies”.

Charlie Fink of Forbes writes:

Tilia has been running Second Life’s $650 million dollar economy for the past seven years. Financing for the new company is coming from their strategic partner, JP Morgan. “It’s very important virtual worlds have the instantaneous settlement Tilia provides,” said Brad Oberwager, Executive Chairman of Tilia, and acting CEO of Linden Lab. “We can handle very high transaction volume at very low dollar amount that even with USDC, the systems aren’t built for that kind of stuff. We move one 250th of a dollar sometimes.”

In addition to the investment, Tilia is also working with J.P. Morgan Payments to increase payout methods and expand the number of pay-out currencies. Perhaps most importantly, partnering with the world’s largest bank will enable Tilia to scale to the potential size of the putative metaverse.

Dean Takahashi of Venture Beat adds:

Oberwager sees his company as crucial for the metaverse.

“Tilia is money into the metaverse. It’s money moved into the metaverse and money moved out of the metaverse,” said Oberwager. “And why this is so important is because you cannot have this concept of the metaverse without a social economy. It is both the social aspect and the financial aspect. Those two things must work in harmony. To do money, you need some virtual token to make money work.”

He added, “Money has to be rock solid. That is JP Morgan. That’s the partnership. What’s the value of Tilia? You can’t build a metaverse without user-generated content. You can’t build a metaverse without social interaction. You can’t build a metaverse without some sort of financial token that allows people to build a world.”

The company will use the funds to expand its business and go into new markets.

“We are moving money in the metaverse,” Oberwager said. “It’s a real thing. that’s where the investment is going. We have a customer list and people are coming to us.”

Tilia fuels commerce in Second Life, which generated $86 million in payments in the past 12 months. The Second Life economy is still measured at $650 million nearly 20 years after its founding. Tilia has about 48 employees.

Oberwager said the deal took about a year to work out with J.P. Morgan Payments. During that time, Tilia made sure it could be interoperable with J.P. Morgan.

Fellow metaverse blogger Wagner James Au provides a bit of context:

Finance giants like J.P. Morgan make strategic investments like this on the expectation they’ll be accessing a larger market down the road, i.e. burgeoning metaverse platforms with less experience than Linden Lab handling international payments/virtual currency.

On the other hand, Tilia has been a standalone company since 2019 and only counts Second Life and below-the-radar metaverse platform Upland as its major consumer-facing clients. (Despite a partnership with Unity in early 2022.) But with JP Morgan as a backer, I’d expect other customers to come along soon.

I agree with Wagner; I’m pretty sure that this partnership will lead to more metaverse platforms using Tilia to implement their in-world economies! (By the way, this news has absolutely zero impact on Second Life. Everything stays the same.)

Philip Rosedale and Brad Oberwager Appear on a Special Episode of the Lab Gab Talk Show in Second Life

Lab Gab host Strawberry Linden with Linden Lab founder Philip Rosedale (Philip Linden) and Linden Lab executive chairman Brad Oberwager (Oberwolf Linden); image is a screencapture from the YouTube video

On January 13th, Linden Lab announced:

Have you heard the news? Second Life founder Philip Rosedale is back! With today’s announcement about High Fidelity’s investment in Linden Lab, we’re excited to welcome back Philip Rosedale in the all-new role as Second Life strategic advisor. Philip is a recognized metaverse pioneer who led the early days of Second Life to help form and inform the now-mainstream concepts of virtual economies, cultures, and communities. In his new role, he will bring his vast virtual world experience and vision to help shape the future of Second Life. 

And today Linden Lab released a pre-recorded hour-long episode of their popular talk show, Lab Gab, hosted by the ever-capable Strawberry Linden (formerly known as the SL blogger Strawberry Singh, and now a Linden Lab employee herself):

As I have often said before, Philip is a very articulate and highly informed speaker with many years of experience in virtual reality and virtual worlds, and of course Brad is no stranger to the microphone himself! I only caught the last few minutes of the streaming video on YouTube myself, but I will be sure to go back later this evening and watch this in full! Enjoy.

UPDATED! Linden Lab To Be Acquired By an Investment Group Led by Randy Waterfield and Brad Oberwager

Please note that I am taking the entire month of July off as a self-imposed vacation from the blog so I can focus on my other work, except for sponsored blogposts, and major breaking news such as this. See you in August!


Randy Waterfield (left) and Brad Oberwager (right). Source: LinkedIn profiles


This evening, Linden Research (better known as Linden Lab, the makers of Second Life) dropped a bombshell press release: the small but profitable privately-held company which has been run pretty much independently since it was founded by Philip Rosedale in San Francisco in 1999, will be acquired by an investment group.

SAN FRANCISCO, July 9, 2020 — Linden Research, Inc. announced today it signed an agreement to be acquired by an investment group led by Randy Waterfield and Brad Oberwager. Closing of the acquisition is subject to regulatory approval by financial regulators in the U.S. related to Tilia Inc.’s status as a licensed money transmitter as well as other customary closing conditions. Upon closing, Mr. Waterfield and Mr. Oberwager will join the Board of Directors of Linden Research, Inc.

“We’re excited for this new chapter to begin. We see this as an opportunity to continue growth and expansion for Second Life and our money services business Tilia,” says Linden Lab CEO Ebbe Altberg. “We’re grateful for the ongoing support from our community, business partners and investors. Now more than ever, there is increased recognition of the value and utility of virtual worlds to bring people together for safe, shared, and social online experiences.”

“Both the company and its virtual world community have a unique culture and creative energy that remain important to the long-term success of Second Life,” says Brad Oberwager. “There’s a bright future for both Second Life and Tilia and we’re excited to help fuel these growth opportunities.”

“Since its inception 17 years ago, Second Life has been a pioneer in the concepts of virtual societies, land and economies,” says Second Life founder Philip Rosedale, who is now CEO of High Fidelity. “I’ve known Brad for 14 years personally and professionally, and I’m confident he will bring his passion and proven strategies to help Linden Lab achieve new heights in distribution, scale, and quality while remaining true to the original vision, creativity, and community that makes Second Life unique and special.”

Mr. Oberwager has spent his entire career in technology and consumer-focused companies. Mr. Oberwager is the founder and Chief Executive Officer of Jyve, a Silicon Valley based technology company. Prior to Jyve, Mr. Oberwager owned Bare Snacks, acquired by PepsiCo. Mr. Oberwager is an advisor to several technology start-ups and sits on the boards of several technology and CPG companies.

Mr. Waterfield is the Chairman and CEO of the Waterfield Group. The Waterfield Group has invested in over 100 technology, financial, insurance, bank and other companies.


One commenter on the news over at the RyanSchultz.com Discord server noted:

One of the new investors in the group that bought Linden Research [Linden Lab] is Randy Waterfield, the Wookey guy.

Wookey, of course, is the company that bought Sansar from Linden Lab earlier this year, after the platform went through two rounds of staff layoffs and almost folded.

What does all this mean? Damned if I know! I’m quite sure many Second Life users will be wondering what it all means as well. New owners could mean a shake-up at Linden Lab, and we all know how much some Second Life users hate changes (witness the fuss last year over Tilia).

Of course, it might also be the best thing to happen to the platform, a new opportunity (with fresh investment!) to take it to the next level of growth.

Interesting times, indeed! Stay tuned.

UPDATE 11:08 p.m.: The news took many by surprise, including the team who work on the most popular Second Life viewer program, Firestorm, who tweeted:

Please don’t ask us, this was news to us too.

Longtime SL blogger Inara Pey reported:

I reached out to linden Lab on finding out the news, but was informed the company has no further comment on the acquisition beyond the press release.

However, given that the acquisition will see Mr. Waterfield and Mr. Oberwager joining the board, I would anticipate that – given the nature of acquisitions – it is unlikely there will be any immediate visible changes to Linden Lab, Second Life or Tilia Inc., and, and the company will likely to continue to operate in a “business as usual” mode with regards to both Second Life operations and the community for the immediate future. That said, there will likely be a lot of speculation as to the future of SL, together with concerns / fears as to what the longer-term future might be.

While it is purely speculative on my part, I would hazard a guess that the acquisition will take into consideration the increased interest Second life has witnessed over the last year(ish), and particularly as a result of the SARS-CoV-2 pandemic, and will see in inflow of cash for the company that will allow it to (hopefully) meet its immediate goals with both Second Life and Tilia Inc., and allow both platforms to continue to be developed.

And (of course!) there is an ever-growing comment thread over on the Second Life Community Forums.

UPDATE July 10th, 2:08 p.m.: In response to the intense level of speculation on the above-mentioned comment thread on the SL community forums, Brett Linden, Senior Director of Marketing for Linden Lab, made the following statement:

Good day, all!

Just jumping in to respond to a few of the comments…

A few folks are speculating that this is the end of SL and nothing could be further than the truth. Any talk of dismantling or radically changing the fundamentals of SL that we know and love is inaccurate. While we can’t get into specific details about the deal itself, I want to emphasize the fact that this keeps Linden Lab as an independent venture led by two investors who have a great deal of awareness about what SL is and isn’t. They are excited to join and help us grow both SL and Tilia while also respecting and recognizing the needs and sensitivities of the existing culture and community. 

And, in response to a question about when more detailed information would be forthcoming about the acquisition, and when the new owners would address the Second Life community, Brett said:

Great question! We look forward to being able to share more as soon as we can and I know that Brad is eager to meet the community as we get closer to the closing/approval date.