It’s 2022, and the metaverse is real. Several companies—including Big Tech players—are urging more and more people to duplicate their physical worlds on digital counterparts, with ‘enhanced’ experiences, avatars, and offerings.
But how real is this digital ‘you’?
Lokesh Rao and Sunil Arora noted that avatars—digital representations of users—could help individuals present themselves as they desired, which may otherwise be impossible in the real world, where we are frequently judged, scrutinized, and made fun of for just being us.
The duo decided to launchin 2021 to help individuals not only mint real-looking, human-like avatar NFTs but also replicate their lifestyle in the metaverse.
In a conversation with The Decrypting Story, Lokesh explains “Today, most avatars in the metaverse are either cartoons or caricatures. We wanted to change that.”
“Our avatar is called Buddy. We wanted the avatars to be the replication of an individual—with the same physical attributes—so they could roam, shop, play, and most importantly, be themselves because avatars should essentially be an individual’s manifestation in the metaverse. We are letting users integrate their own real-world lifestyles into the metaverse,” he adds.
Both Sunil and Lokesh have worked together in the fashion industry for decades. Lokesh, an IIM alumnus, was working as a principal consultant for World Fashion Exchange when he met Sunil who was heading the global business development in the same company.
In 2018, Lokesh saw the frenzied nature of bitcoin and started attending blockchain events hosted by Web3 companies. He says, “While attending those events, I had a realization that bitcoin just acts as fuel.”
The duo noticed that blockchain technology was far beyond bitcoin and tokens. “It is a powerful technology that could solve several problems,” he adds.
In 2020, during the pandemic, they saw people having difficulty communicating while being isolated and in different places.
Lokesh says “Individuals who thrived on everyday social interactions found it harder to communicate or deal with their loneliness. We wanted to solve the communication barrier, but did not know how.”
At the same time, they came across the concept of a digital twin in the metaverse, where individuals—in their avatars—could communicate with others without geographical restrictions.
“The idea really piqued my curiosity. I kept wondering how revolutionary this whole concept of coding a real person into a virtual space could be. Individuals in their avatars could be anywhere, in any time zone, which is not possible in the real world,” Lokesh says.
All these factors led the duo to launch Trace Network Labs, which enables individuals in their avatars to interact with others, hold business meetings, watch a movie together, and engage in other activities.
“The idea was to enable an individual’s virtual alter ego to come to life in the metaverse,” adds the co-founder.
Into the world of avatars
Trace Network Labs launched its dApp this May, where individuals can mint their Buddy avatar NFTs using theblockchain.
Lokesh explains “In the dApp, we let people take a selfie, upload their photo, and then mint the avatar that would exhibit their physical traits. Then, individuals can start using their Buddy avatar NFT in different metaverses.”
Buddy avatars of industry experts, Ari Meilich (Founder of Decentraland), Vitalik Buterin (Co-founder of Ethereum), Sandeep Nailwal (Co-founder of Polygon)
The startup is also building an NFT marketplace called Bling, which will focus on digital wearables and lifestyle products for avatars to personalize them.
To enable on-chain communication in the metaverse, Trace Network Labs has integrated an RTC (real-time communication) protocol to allow peer-to-peer communications for avatars in the metaverse while shopping.
Besides that, the startup is building a tech-stack, which will enable virtual shopping experiences in the metaverse for Buddy avatars as the co-founders believe shopping is much more than purchasing commodities or services. It has more to do with experience.
“We are changing how commerce is viewed from transaction based commerce to experienced based commerce,” adds Lokesh.
Lokesh believes that businesses such as global fashion brands will be able to create their own experiential stores in the metaverse that will engage customers in a whole new way with experience-based shopping.
“While online shopping [in Web2], individuals only scroll and zoom pictures of their outfits. But in the metaverse, individuals can walk into a virtual store using their avatar, check out the offers at the store, try out the outfit on their avatar, and see how it fits,” he adds.
The brand’s experience stores will offer digital wearable NFT and phygital NFTs (combination of digital and physical) collections. With these 3D digital wearable NFTs, Buddy avatars can get ready for metaverse events.
The brand’s experience stores can be integrated with the e-commerce websites to handle physical deliveries.
Apart from this, all interactions of avatars at different virtual events or within brand stores in the metaverse will be recorded on-chain to help users record memories of any events their avatar engages in.
Operating on both B2B and B2C models, Trace Network Labs earns its revenue through various different sources. Primarily, B2C revenue comes through the sales of Buddy NFTs, which cost $25.
In the B2B model, it earns money through sales from the experience store.
With the tech-stack, the team is also building a metaverse theater experience, where it would be earning revenue through the sale of tickets. Also on cards is Trace Events, where the firm expects to earn revenue through renting space in the metaverse.
The startup has various technology partners, including Polygon, Bitkeep, Metamask, EPNS, Cere Network, Mogul Productions, and others.
Experiential commerce in the metaverse
Experiential commerce is altering the way people shop online as marketers shift their focus from just selling products to also building connections with customers.
Lokesh says, “Experiences matter as they have the power to shape a consumer’s views, create memories, and mark their next move. Today, the experiential economy is on the rise and will continue to grow in the years to come.”
As per Emergen Research, the global metaverse market is expected to reach $1607.12 billion by 2030, registering a CAGR of 43.3% during the forecast period.
There are several companies building on the metaverse. On the global level, Dimension Studio, a virtual production startup, is creating digital humans and virtual worlds for brands. In 2020, it collaborated with luxury brand Balenciaga, among the first companies to virtually debut their collection through a videogame fashion show in 2020. Then, in the videogame Fortnite, Balenciaga dressed characters for the new Fall 2021 collection, which brought them one step closer. into the metaverse.
Other promising global startups like DressX helped H&M design its first virtual clothing collection, and Dematerialized produces both digital clothing and NFTs.
“Recently Nike partnered with RTFKT blockchain and launched NFT sneakers, which were auctioned, where winners were able to hold physical shoes but the real coveted asset remains the digital ones,” adds Lokesh.
Several global fashion brands, including Gucci, Louis Vuitton, Burberry, Moschino, Valentino, Prada, and Marc Jacobs, have forayed into the metaverse.
However, Trace Network Labs believes it has an edge as there aren’t enough startups enabling experiences and minting avatars, as well as building an infrastructure layer for the metaverse.
“Even though everybody is eager to enter the world of the metaverse, we do not see much competition. As our Buddy NFTs can be used in different metaverses and not a lot of startups are doing that,” Lokesh adds.
At present, Trace Network Labs has a team of 22 members. It is planning to expand the team in the coming months.
The co-founders say that Trace Events and Fashion Brand’s Experience stores will be launched by the end of August or early September.
The startup intends to empower creators, developers, and builders in the future. “We want to support the creators’ economy so we will let individuals build anything either a store, or theater experience, and on top of our tech-stack. Then, an individual can sell their product to the end customer and earn money.”
In 2021, the startup raised $1.8 million in a seed round and is looking to raise Series A funding.
(The story was updated to add more inputs from the startup)