Virtual Universe Is a Victim of the Cryptocurrency Market Downturn: The Company Finally Releases a Statement

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After months without any official word about the Virtual Universe project, the company behind the product, Ukledo, posted the following message to their Telegram discussion group:

The Ukledo team wants to bring our followers up to date on the Virtual Universe (VU) project. As we have all undoubtedly seen, the crypto market is currently experiencing a major downturn and many projects are now underwater or completely failed. No one quite knows how long this condition may occur. VU has been affected by this general crypto bear market. Also, the consumer adoption of Virtual Reality is not quite where the market hoped it would be. It’s coming, but not as fast as most of us thought.

Virtual Reality development is an expensive and complex undertaking, even for the simplest of applications. As a result, until the market picks up (both from a consumer adoption and investment perspective) the team is focusing on a shorter term strategy that can create revenues to keep the Company moving forward, and keep your interest and involvement as well. The team is a big believer in the ultimate vision of VU. However, as is often the case with a young startup, timing plays a pivotal role in success.

We sincerely appreciate all the support from the community (and the nearly 20,000 users who signed up for a free account). We will do everything in our power in the months ahead to create a strategy that allows us to eventually bring this vision to market. Also, please do not fall prey to scammers who appear to be popping up in this Telegram from time to time.

We have had to reduce marketing/communications (related to budget) but will remain active in the channel for questions/comments.

Thank you,

The Ukledo Team

Well, this is serious, but at least we have a better idea what’s going on. Previous to this company announcement, one member of the Virtual Universe Telegram community (who is not associated with the company) posted this update with only second-hand information about the current state of the company:

I feel everyone’s pain. I’m disappointed that the VU team is not more active on Telegram or any other means of communication. I have talked to someone close to the project. Unfortunately, it’s sounds like the project is struggling to lock in investors in the private sale. They are also seeking the possibility of linking up with some well-established platforms in the space. I am by no means associated with the project. I only know people who are.

I also have many questions that have not been answered yet. I don’t believe the team is ready to call it quits yet. That is why there has not been any word on refunds. I can, however, assure you that they have not up and vanished. I will keep everyone posted with news that I receive since it does not seem the team is doing it themselves.

The Virtual Universe project is a reminder that even a beautiful-looking, well-featured demo does not guarantee success in this dire cryptocurrency market. Will the market recover? Who knows. Perhaps it would have been better if Ukledo, the company behind VU, had pursued a more traditional fund-raising route for their virtual world project from the start, rather than making a risky bet on crypto. We’ll have to wait and see what happens. It looks extremely unlikely that Ukledo will be able to stick to their original plan to have a public beta launch of Virtual Universe in January 2019. Those who have purchased VU tokens before their sale was suspended will simply have to wait to see if they will ever get a chance to use their tokens, or if they will become just another worthless cryptocurrency.

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Virtual Universe: What’s Going On?

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Ever since I had my first guided tour of Virtual Universe back in April, I felt that this was something special. As opposed to so many other blockchain-based virtual worlds that were more hype than substance, VU felt like an actual, solid product, tantalizingly close to a release date. I was excited, and I promoted VU as often as I could on this blog.

But the cryptocurrency markets this year have been rough—absolutely brutal—lately. Many cryptocurrency tokens for various projects have lost a great deal of their initial value. Many people who jumped on board the cryptocurrency bandwagon when certain coins were riding high are now looking at their losses and cursing their bad luck. The Telegram channels I follow have been full of angry, bitter, and demoralized buyers.

Very recently, Virtual Universe decided to turn their VU token sale from public to private. Their only public message about this change was posted to Medium on Sept. 27th:

ICO Update

As the Industry continues to evolve rapidly, the VU Token team has been advised to take our sale private at this time. We want to thank our contributors and supporters for their patience as we continue to pursue private investment sources.

The Company intends that current VU Token owners will receive their tokens upon the conclusion of our token sale.

We remain excited and committed to the creation of Virtual Universe. Stay tuned to our social channels for updates.

The Virtual Universe Team

And then, complete and utter silence. Absolutely no news, no word of any kind.

In recent days, I have been approached privately by two worried people, one of whom had made a significant purchase of Virtual Universe tokens during their public ICO period, and another one who (like me) was an active participant in the VUtoken Partner Program. Both had the same question: “What’s going on?” I didn’t know what to tell them. I honestly don’t know what’s going on. But the sudden lack of communication is a very troubling sign.

There hasn’t been an “Earn & Win” task posted since early August, and I am starting to feel a little concerned. I’ve posted questions in both the Discord and Telegram channels for the Virtual Universe project, but nobody has responded to my questions.

What’s going on?

Money in the Newer Virtual Worlds

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Image by TheDigitalWay on Pixabay

The best things in life are free
But you can give them to the birds and bees
I want money
That’s what I want
That’s what I want
That’s what I want

Your love gives me such a thrill
But your love won’t pay my bills
I want money
That’s what I want
That’s what I want
That’s what I want

Money, the Flying Lizards


In-world currency systems are an integral part of many social VR/virtual world platforms. Second Life can be seen as the perfect example of a virtual world whose popularity exploded once people realized that they could make money on the platform, inspired by a 2006 Businessweek cover story on Second Life entrepreneur Anshe Chung:

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This blogpost is an attempt to provide a comprehensive overview of how the newer virtual world platforms have implemented in-world currencies and set up systems for commerce.

Sansar

Linden Lab has, of course, 15 years of experience working with Second Life‘s economy and in-game currency, and they have applied that expertise in the setup and operation of the economy for their new virtual world, Sansar. You can buy Sansar dollars in two ways, directly in bundles or via the Sansar Dollar Exchange (SandeX), a currency exchange. There are more details on the SandeX in this document:

 The SandeX is the official virtual exchange of Sansar, run by Linden Lab, where you can:

  • Buy Sansar dollars at the current market rate.
  • Make limit buy offers at a requested exchange rate.
  • Sell Sansar dollars at the current market rate.
  • Make limit sell offers at a requested exchange rate.

All SandeX transactions are subject to transaction fees.

Market buy and sell

Market buys and market sells are the quickest ways to purchase or sell Sansar dollars on the SandeX. The SandeX automatically matches your order with the best exchange rate. The quoted exchange rate includes transaction fees associated with buying and selling on the exchange.

Limit buy and sell

Limit buys and sells allow you to specify the amount of Sansar dollars and the exchange rate you are willing to accept. The SandeX automatically matches up buy and sell offers as they come in. If you are buying, you must have sufficient funds in your US$ wallet to pay for the buy order.

Creators can sell their creations on the Sansar Store, and can also receive statistics on how well their items are selling. There is as yet no in-world commerce like they have in Second Life.

Sinespace

Sinespace has two in-world currencies, called silver and gold. According to their wiki:

Gold

Gold credits can only be purchased for real money by spending users and can be converted back to real money by Sine Wave virtual goods partners.

Gold credits trade at 100 / 1 fixed ratio with USD$

Silver

Silver credits are free promotional credits given to users as rewards for participating in the community.

Silver credits cannot be converted to real money but can be used by creators to promote their content to new platform users who have not yet purchased gold.

Sinespace has a Marketplace built into its client software, and a few vendors like BlakOpal have also set up in-world stores.

High Fidelity

High Fidelity has attracted a lot of recent media attention due to the fact that they have decided to set up a blockchain-based in-world currency, called High Fidelity Coins (HFC):

  • Blockchain Technology: Our new currency, High Fidelity Coins (HFC), will be a public blockchain with a consensus group of multiple parties. A blockchain is essentially a digital ledger of transactions. We are using blockchain technology to track and record transactions made using HFC. All information on a blockchain exists as a shared database, which means the records are public and verifiable. It is not centralized. We are also using the blockchain to store information about digital asset ownership in High Fidelity. This enables us to protect intellectual property by embedding certification in items in the blockchain. HFC will eventually be convertible to local currencies or other cryptocurrencies at popular exchanges.
  • Cryptographically-secured Wallet: Users will be able to participate in transactions using their Wallet, which will be an app on their tablet in High Fidelity. Your Wallet is secured using a security picture and a passphrase which includes ECDSA public-private keys pairs. These key pairs are used to sign each transaction.
  • Proof of Provenance (PoP) certificate: This certificate is generated for every transaction between a user’s Wallet and the Markeplace. This certificate’s ID is stored on the blockchain. The certificate contains static properties that can help in identifying the item and the owner. These properties cannot be altered, except by transfer of the PoP Certificate. Currently, we only support objects that contain a file type .JSON. Support for avatars and other file types will be coming soon.

Currently, the only way to get some HFC (a free one-time grant) is to go to the Bank of High Fidelity domain at their open times and meet with the banker. Here’s some more information of HFC from the High Fidelity website:

We are currently giving out the currency for anyone interested in participating in the closed beta for High Fidelity Commerce. If you want to get your inital HFC grant, you first need to set up your Wallet.

These coins are to be used as currency for any commerce transactions in the Marketplace. Since we are using blockchain technology, all transactions with HFCs will be publically recorded and stored.

Your Wallet will be secured using ECDSA public-private key pairs, security picture and passphrase. Learn more about your Wallet here.

HFC is not intended for speculators to hold and should be used in transactions in High Fidelity. HFC is intended to be a stable currency and used to support a healthy and vibrant virtual economy for digital goods and assets.\

High Fidelity has an online Marketplace where vendors can sell their products (users can also access the Marketplace listings using their tablets in-world). Avatar Island is the first domain set up in HiFi where you can try on and purchase items for your avatar in-world.

VRChat

VRChat currently does not have any sort of commerce or in-game currency, although there is a thriving real-world business for people designing and rigging custom avatars for VRChat users. It will be interesting to see what happens when/if the company decides to implement an in-world economy on the most popular of the social VR platforms.

AltspaceVR

As I recently reported, AltspaceVR seems to be gearing up for commerce, but at the moment, there is no commerce or in-game currency system in place.

OpenSim

Different OpenSim grids have different solutions to the problem of an in-world currency. Every grid has in-world stores which offer merchandise for sale. Some grids issue their own currencies; others use the Gloebit system, which has the advantage of being one standard currency which is transferable and usable across a large number of participating OpenSim grids. The Kitely Marketplace is a popular shopping mall for the many OpenSim virtual worlds:

Kitely Market can deliver items to all Kitely avatars, as well as to avatars on all other OpenSim grids that support the Hypergrid. Our marketplace also delivers items to avatars on several non-Hypergrid grids that have been set up to receive deliveries from our system.

Kitely Market has been used to deliver items to thousands of OpenSim users on more than 100 different OpenSim grids.

Virtual Universe, Decentraland and the Other Blockchain-Based Virtual Worlds

Virtual Universe, Decentraland, Mark Space, Staramba Spaces, VIBEHub, Ceek, and Terra Virtua (among many other products in this increasingly crowded marketplace) are issuing their own blockchain-based cryptocurrencies or tokens for future use on their platforms. all of which are still in development. The product closest to a launch date appears to be Virtual Universe, which plans to start a closed beta sometime in the fourth quarter of 2018.

I’ve already strongly warned potential investors to do every. single. scrap. of their homework before investing a penny in any of these blockchain/cryptocurrency ventures (link). Caveat Emptor!

Other Social VR/Virtual World Platforms

I can’t think of any other metaverse products which have in-world currencies at the moment, besides the adult virtual worlds like Oasis and Utherverse/The Red Light Center (these links are safe for work). If I’ve missed one, please let me know in the comments, thank you!

A Review of Virtual Universe

FULL DISCLOSURE: I am choosing to participate in the Virtual Universe (VU) Initial Coin Offering Partner Program. Why? Two reasons:

  1. After my recent guided tour of VU, I feel very strongly that this is going to be a successful and popular virtual world/MMO hybrid platform, and I want to be a part of it when VU launches their beta this summer. This is the very first blockchain-based virtual world that I actually feel excited about!
  2. As a Canadian citizen, I reside in one of the three countries where I am currently legally forbidden from purchasing VU tokens (the other two are the United States and China). This means that the only way I can legitimately earn VU tokens to use in this social VR space before the beta launch is via the VU ICO Partner Program.

I want you to know this up front: this blogpost is a promotion for VU, in exchange for VU tokens.  You can follow on this webpage to see how many VU tokens I have earned by completing tasks in this Partner Program if you wish (right now, I am at number two on the VU Token Leaderboard). There’s nothing stopping you from participating in this Partner Program yourself, and earning some VU tokens!

IMPORTANT: VU Tokens are not a real currency. They are ERC-20 based blockchain tokens intended to permit players of Virtual Universe exclusive access to digital assets within a VR game known as Virtual Universe (VU). They are a form of in-game virtual currency.  Virtual value attributed to the VU Token will be as a result of in-game efforts by players, and no future value is represented or guaranteed.


The private beta launch of Virtual Universe has been pushed back from July to the final quarter of this year, according to a recent message from Jeroen Van den Bosch, VU’s Chief Creative Officer and co-founder, posted to the official Virtual Universe Discord server. (By the way, the Discord server is a good way to find out what is going on with the project. Use the link provided above to join the Discord server and chat with the developers and other interested users!)

VU is still looking for people to join their beta test. You can register for the private beta at this link. Please note that you do have to have to be a Pioneer member to sign up for the closed beta. To become a Pioneer member, you must purchase VU tokens, or you must be a part of the VU Token Partner Program and complete tasks in their Earn & Win program to promote the platform (like this blogpost!).

If you haven’t seen what Virtual Universe has to offer yet, I suggest you take a look at my half-hour guided tour of VU with Jeroen Van den Bosch. There’s also a second tour you can watch here. And there’s a third tour here:

In addition to the tour videos, which give you a good sense of the platform, there’s already lots of information about the project on the Virtual Universe website, so you might want to explore that to pick up the backstory of the game and look at some of the artwork.

The first set of apartments and penthouses for VU users has already sold out completely, but there will be more apartments built, including some super-luxurious homes for the high rollers! You will also be able to set up and run your own business in Virtual Universe. The game will be free to play, and you can earn VU tokens by doing daily quests, so it does not cost anything to take part (although obviously, VU wants you to buy in-game tokens since this is one of the primary ways they will earn money).