The metaverse is one of the most intriguing, yet often misunderstood concepts in the blockchain space. Many people are aware of its existence but are uncertain about its functionalities and operations. With this in mind, a top question asked about the concept has to do with metaverse laws. People are eager to understand if there are any such laws, and, if so, how they came to be.
This is a subtly complex question. It compels us to examine some of the fundamental principles of the metaverse, and wonder about which elements from the physical world transition into the virtual realm, and whether there are any new concepts and regulations that might exist solely in the metaverse.
To comprehend this, we need to explore both the social and technological facets of the metaverse that make it function. This entails investigating potential technical rules that might exist for a blockchain-based metaverse, as well as understanding the people-oriented aspects, which are needed for the regulation of the metaverse. It is a multi-layered subject, but it's of paramount importance to explore, because if the metaverse is to be regarded as a distinct location on its own, it's crucial to understand its principles, customs, and overall laws.
It also helps us to potentially figure out where notable crypto-oriented companies like Unstoppable Domains fit into the equation - we'll get to that, too.
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Table of Contents
Are There Metaverse Laws?
The question "are there laws in the metaverse?" can be interpreted in a couple of ways. Someone might be asking if laws from the real world apply to the metaverse, or they might be inquiring whether the metaverse has its own unique laws. Let's start with the former.
The primary way to address this is to question which rights and laws apply universally. This is pertinent because if a law is applicable across the entire Earth, or encompasses all human life, it would likely extend into the metaverse, as it is a human creation, developed on Earth. The answer to this is relatively straightforward: human rights apply universally.
In fact, there is reason to believe that human rights extend even beyond Earth, into space, with the United Nations Office for Outer Space Affairs suggesting that these laws function irrespective of an individual's location. This is crucial because it underscores a unique characteristic of human rights, which many other laws do not possess. Typically, laws are considered to govern a geographical space occupied by people. However, human rights govern the conceptual space of the body.
It is not about the location you occupy, but rather, your existence as a being in the world. Therefore, if human rights can exist at the far reaches of the universe, they undoubtedly apply to the metaverse, as well. This provides us with a solid foundation for metaverse laws. Essentially, as long as we are humans, human rights apply to us.
Defining our human rights can be a little challenging, as they are a profoundly important concept that many people have strong opinions about. However, generally, the best source for determining these rights is the United Nations. The UN Declaration of Human Rights lays out thirty articles that outline what we fundamentally owe each other and what we possess simply by the fact that we are human.
It includes the right to life, freedom, education, nationality, the prohibition of torture, basic necessities such as food and shelter, and many other areas. These would all theoretically apply to the metaverse, although some elements, like food and shelter, will clearly not be as relevant.
The more pertinent rights concerning metaverse laws would likely be the prohibition of discrimination, the right to education, freedom of movement, freedom of thought and expression, and the right to private life. These seem much more significant when asking, "are there laws in the metaverse?".
Does a Right Automatically Become a Law?
So far, I have essentially equated rights with laws, arguing that if human rights exist, then metaverse laws must necessarily exist. This is a reasonable argument to make, but it certainly requires some clarification. While we commonly use rights and laws interchangeably in conversation (for example, saying "I have a right to free speech" or "I have a right to a private life"), they are distinct concepts.
Granted, they have significant overlap, but they are fundamentally separate. A right is an abstract concept that encapsulates a belief that humans have certain entitlements inherent to them on a fundamental level. These are ideas and assertions about what humans require on a physical and psychological level to lead their best and most fulfilling lives.
A law is a concrete doctrine that essentially translates a right into reality. They tend to work in tandem. For this reason, we start with a right, such as the right to free speech, and then we establish a law that solidifies and sanctifies it. A law is an acknowledgment by an authority of a right. This is how it functions for countries, and it is theoretically how it would work for metaverse laws.
However, this leads us to a complex hurdle to overcome. What body or authority would (or could) sanctify our rights and convert them into laws in the metaverse? The concept of human rights is the perfect starting point, but without authority, they might not truly become laws.
I have established that there is a framework that could be used to define metaverse laws, and these are human rights. However, there now needs to be a way to actualize these. One method of doing so would be at the country level, using geographic locations as the primary places where metaverse laws originate. This means that the laws governing the country where a person accesses the metaverse would also become metaverse laws.
For instance, if there is a law within a country that protects someone from harm or degradation, then that law will apply within the metaverse for those individuals. This implies that a physical law would become a metaverse law. This idea could also be interpreted differently, with the laws of a country being applied not solely to the parties using the metaverse, but rather to the metaverse itself, if it is being operated or managed within a certain country.
For centralized metaverse projects, this is easy to comprehend, as it would simply mean that the laws relevant to the headquarters of the metaverse would extend to the whole world. This is essentially how Internet laws work. When a website is managed within a specific country, that country’s laws apply to it. However, the previous idea would also hold true, as the people who use that website from their own country would be subject to that country's laws as well.
Internet law is complex due to its global existence, but this is a general rule of thumb. Metaverse laws would operate similarly, as the metaverse is essentially a 3-dimensional internet. For example, in the US, the Federal Communications Commission, and the Supreme Court could be the main bodies that apply to metaverse projects being run within the country. If those projects involve cryptocurrency, then the SEC may also get involved, as they are deeply invested in the future of the crypto and blockchain industry.
This means that the country where the metaverse is run would likely uphold the human rights that apply there, plus the country from which a user accesses the metaverse as well. They would also have the ability to introduce new laws and rules for regulating the metaverse. If the FCC wanted to create new frameworks and specific laws for a US-based metaverse, then they could easily convert those into laws. Any institution that has been empowered to make legal decisions, and which can argue that the metaverse fits under its specific jurisdiction can do this.
Similarly, if someone from Japan (for instance) accessed a US metaverse, then they would be subject to Japan's interpretations of human rights, as well as any other laws that Japan might establish regarding the metaverse. These could be created by Japanese lawmakers, which might include the country's Ministry of Internal Affairs and Communications.
Decentralized Metaverse Laws
However, things get a little more complex when it comes to decentralized, blockchain-based metaverse projects. In a truly decentralized space, jurisdiction is hard to pin down, and so it is not easy to understand what countries can apply laws to them. This does not change the application of laws from the countries that people access the metaverse from, but it does call into question whether one country could impose metaverse laws across the globe to all users.
This leaves us questioning, "are there laws in the metaverse if that metaverse is decentralized?". Would the only laws that exist be those that apply to each member accessing it, meaning that there are no specific laws for the overall space? That might perhaps be true. Obviously, this means laws are still present, but it would mean that you could enter a digital space with a multi-regional range of people and have all of those people adhering to a different set of laws.
Is there a way to apply some consistency to things? There are two approaches to this. One would be for a country or nation to still attempt to govern a whole metaverse project by claiming that it is less decentralized than the project lets on. This is something that the SEC has been attempting to do, claiming that there are several projects that fall under their jurisdiction which are decentralized in name only, or DINOs.
DINOs are not exactly decentralized, but rather they present themselves as such, containing some decentralized elements, and mimicking the structure of a truly decentralized project, when, in reality, they have figureheads and actors who can exhibit highly centralized behavior within the projects. The SEC has raised suspicions of this nature towards Uniswap, one of the largest and most pioneering, so-called, decentralized exchanges. Uniswap is, so far, unproven to be a DINO, and not only this, but it is hard to quantify or identify every DINO in existence.
If the SEC, the FCC, or another regulatory body somewhere around the world considered a "decentralized" metaverse to be a DINO, then they could attempt to exert their jurisdiction on them. Whether they would succeed and these laws would be seen as genuine and sanctified is hard to say, but this is one way in which metaverse laws could emerge.
There's no predicting how successful this method would be, but there's another way of exploring whether there are laws in the metaverse. In the spirit of viewing the metaverse as a distinct virtual space with its own culture and social conventions, there might be a way for members of the metaverse to create their own guidelines and laws.
These would be laws that are native and unique to the metaverse. They might best embody the concept of a "metaverse law", as they apply specifically within a virtual space. Naturally, a topic like this begs the question: who decides? Likely, this would involve identifying and selecting metaverse lawmakers.
There are a few different ways the metaverse could approach this. They could handle it in the same way governance works on a standard blockchain, with users voting on matters with coins and tokens, or with staking and mining. In these systems, people enact change by using their finances to show allegiance to different concepts and ideas.
This happens in blockchains such as Ethereum, Bitcoin, and the Binance Smart Chain. In a metaverse setting, this process could be seen as a type of direct democracy, where the individuals within the ecosystem vote on matters directly, without there being a representative. Nowadays, direct democracy is extremely rare in the physical world, although it used to be very prominent in ancient Greece and Rome.
It fell out of favor partially due to a lack of resources and an inability to manage it sufficiently. However, blockchain technology allows for voting like this to be handled in a more efficient way, and so its use in a metaverse project could be welcome and useful. Of course, a more common route could be to choose or elect metaverse representatives.
Most blockchains function in a more direct democracy setting or style. However, an outlier in this is Polkadot, which has a rich and highly technical ecosystem and separation of powers. Their structure and makeup could provide us with a fascinating framework for how metaverse lawmakers could be chosen.
Polkadot is not only a multi-layered blockchain project, but its system of governance is rich with many aspects and overlapping features. To keep it simple, I will go over two of these: the Polkadot Council, and the Polkadot Technical Committee. Council members are elected by DOT token holders. Their role is to set up referendums amongst DOT holders on pressing matters (which is, itself, a concept that descends from direct democracy).
They can also vote unanimously on certain uncontroversial changes to the blockchain. The council is essentially the official lawmaker of the project. Although, through referendums, you could potentially consider the average token holder as an official lawmaker, too. One thing that the committee gets to do is choose members of the Technical Committee.
This committee has the express aim of maintaining the blockchain and providing updates to it. Generally speaking, they do as the council and the token holders (via referendums) instruct them to, although they do have the special power of fast-tracking emergency upgrades or even triggering emergency referendums. For this reason, it is fair to consider them as lawmakers, too.
A metaverse committee and council could work in a similar way, utilizing some direct democracy elements, while also having members of the community elect individual representatives. This could function based on how many tokens somebody holds, or it could even work by stating that residents of the metaverse all get a vote each (or per home, as it is hard to distribute one-vote-per-person in a decentralized setting where there's no way of verifying identities).
Enforcing Metaverse Laws
The jurist (philosopher of law), H.L.A. Hart, once argued that a law only exists if it can be enforced. His stance was that if a law exists on paper or in the minds of the public, but is never enacted or actualized, then it doesn't count as a law whatsoever. In this sense, you could expand the question of "are there laws in the metaverse?" to "how could metaverse laws be enforced?"
The answer to this depends heavily on what type of laws we are discussing. Decisions and rules made by lawmakers which relate to the metaverse on a technical level could be enacted and enforced by elected technical members, such as programmers and developers. If, for instance, the community (or the council) votes on making a significant change in the metaverse, then the law would become effective from the moment that the technical team made that idea a reality.
This would count as a law because it got enforced. But what about laws on a more personal level? Say that somebody is being harassed by another member of the metaverse (such as being stalked or verbally assaulted). Even if the human right that prevents degrading or harmful treatment extends to the metaverse, who is there to stop that person from doing such a thing?
Questions like this lead us to a fascinating topic, which is to do with what types of punishments could theoretically occur in a virtual space. For laws in the metaverse to matter, there may need to be repercussions for unsavory behavior. Turning back to standard blockchains for inspiration, we find one possible option.
In many blockchains, stakers who try to game the system or do something unfair for the sake of financial gain are subject to the loss of the tokens that they staked. Perhaps something similar could happen within the metaverse, where users who have assets or properties within a virtual space could lose them in the form of a fine. Depending on how intense or creative a metaverse council gets, that could include the loss of a home, or of prized possessions such as tokens and other lucrative NFTs.
There may be other methods as well, such as tarnishing a person’s reputation by marking their profile with a list of the metaverse crimes or antisocial actions they have performed. Points on those lists may stay there for a certain period of time, acting as a punishment in and of themselves.
These are two options, but for those who are the most delinquent and abhorrent, a stricter punishment may be needed. Metaverse imprisonment sounds like a strange idea, but it could theoretically be possible to place somebody’s avatar into a secluded space where they cannot socialize with others for a set period of time.
Even worse than this, there may be a way to exile a person from a metaverse, banishing them from the virtual world and effectively deleting their profile. Exile is a serious punishment, and in the metaverse, it is equal to death, as it prevents your avatar from being actualized and functional within such a space. It would have to be applied to only the worst of offenders, with substantial evidence to back up such an action.
These are potential ways that punishment could be implemented, but we are lacking two important elements of this process: a judge and jury. A metaverse judge could effectively be chosen via voting, similar to a council, or they could be chosen by a council, similar to how Polkadot’s Technical Committee members are picked and allocated.
In Polkadot, to be on the committee, you need to demonstrate a solid understanding of the Polkadot ecosystem on a fundamental and theoretical level. Such a rule could be established and modified to ensure that judges all have some legal background or understanding of what legal ideas and protocols should exist.
A jury could then be chosen by stakeholders in a semi-randomized way, similar to how stakers are chosen for Proof-of-Stake chains. However, it must be stated that once we get to discussions like this, we are working in highly theoretical terms, as the metaverse is a very new concept, and so juridical processes are still being developed for most spaces. Just like in the real world, there will likely be some trial and error, and some push and pull to find the right system.
Nevertheless, ideas like this are important to consider, because metaverse laws and regulating the metaverse are concepts that should be considered as early as possible so that it is easier to set precedents and establish a smooth environment and ecosystem. If they are an afterthought, then there will be major blindspots and problems that will be incurred.
Just like metaverse law councils and technical committees, virtual judges and juries would play a significant role in actualizing our human rights and ensuring that they are maintained, enforced, and overall respected. Without figures who are placed in positions to do this, and without a strong separation of powers that is backed by democratic principles, notions of liberty, freedom, privacy, and all other human rights would not receive the treatment and attention they deserve.
Metaverse laws and legal systems are fascinating to contemplate. The digital frontier is being both built and explored in real time, and many of the ideas and notions I have covered are still being fleshed out and discussed by prominent figures in the tech and blockchain world. Nothing is truly set in stone just yet, but what is for sure is that the process of figuring such things out will be enlightening for humanity as a whole.
For this piece, individuals have been discussed as the most prominent element of the industry. However, there are blindspots to this discourse. For instance, even with decentralized blockchains, we do not know what type of significance and involvement centralized companies like Unstoppable Domains may have. They might lead the way in educating people, training lawmakers, or creating infrastructure. Or, they might find themselves in a whole new role that we cannot even fathom yet.
Such activity would not be surprising, considering how they have helped foster and invest in many experimental projects in this industry, even decentralized ones. And so, metaverse laws and metaverse lawmakers might be inspired by them. The future could be filled with a myriad of twists and turns in this sector that we simply cannot predict. This is what makes it so mesmerizing.