Welcome to the first issue of 2 cents on a coin!
Today, my 2 cents are on Metahero (HERO), the crypto project that aims to connect the physical and virtual world through 3D scanning.
In the past year, the market for Non-fungible tokens (NFTs) has grown 5x to $2 billion in monthly sales, in a scramble to purchase everything from a digital cat to Mike Winkelmann’s “Everydays”, which was sold for $69 million in March 2021. NFTs prove ownership of a variety of things that could exist in the real world or purely digitally.
Do you know what we humans love more than things? You guessed it - ourselves. Metahero thinks that we’d not only want to buy and sell digital things, but we’d also want digital copies of us making these transactions. The company is betting that the next wave of interest on the way to a metaverse will be in digital versions of us. To facilitate this, they have partnered exclusively with Wolf Group, a 3D printing company that has completed projects for the likes of Ferrari & Disney, to manage the supply chain & operation of the 3D scanners.
Metahero expects real-world use cases in:
Gaming: Online gamers will desire hyper-realistic versions of themselves as players in the game world.
Augmented Reality: Regular people will want to make decisions after assessing choices on avatars - new clothes, hairstyles, or to vet the idea of getting a new tattoo.
Medicine: Gain new opportunities to diagnose diseases or carry out medical consultations remotely.
To facilitate this, they plan to set up 3D scanning centers in cities around the world where people will visit to digitize themselves and other items for use in virtual reality. At the onset, Metahero will pay people up to $1000 in HERO to get scanned so as to achieve a critical mass of digital avatars and NFTs in their database.
HERO’s marketplace performance
3-month price trend
HERO may not have been the best performing VR/AR token in the three months leading up to 21.11.2021. However, with a 90-day price change of 264%, the token has gained significant value since it was launched in July 2021. It’s also the second most tradable token in its category with 16 market pairs.
At the time this data was pulled, HERO had the highest volume in trades, close to $47 million in transactions within 24 hours. This speaks to the level of interest in the coin and its liquidity. However, high volumes could be a misleading indicator of great performance - if there are only a few large stakes in the token, one whale’s sell-off could trigger a price dump.
Unique value proposition
Of the 15 coins in the VR/AR category on Coinmarketcap, HERO is the only one with a hardware twist. Where other tokens’ entire offering is online, Metahero has found a way to translate real-world items - people and things into 3D models, as much a replica of the original as things could get.
Could this be a genius idea or an epic miss? Time will tell.
The product-market fit: One of the big drawbacks I see with Metahero’s business model is the assumption that people will want replicas of themselves and their things so bad that they’d be willing to commute to a 3D scanning center to make this happen. For utility in a universe that exists only digitally, a hard, physical investment in time, commute & money seems unlikely especially if alternatives exist.
This leads to my second point.
Substitutes & alternatives: Apple’s memoji feature currently allows iPhone owners to create avatars that can match their personality & mood. These “memojis” come custom made and look nothing like you though. This is where Samsung’s AR emoji, which creates an animated avatar from features of your face, is better. Although the current solutions seem subpar to Metahero’s full-body 3D scanning capabilities and one might smirk at Apple/Samsung’s current recreations, I imagine these companies could invest more to enhance the effectiveness of the technology and offer people more realistic 3D versions of themselves and their things in a fraction of the time it will take to commute/pay at the neighborhood scanner.
In addition, most of the demand for 3D avatars today comes from gamers. Reportedly, One in 5 gamers on Roblox change their avatars daily. The question is whether today’s users of these avatars will trade the flexibility of switching avatars for the quality that comes with having one HD 3D version of themselves.
Funding: Although they claim to have quite a padded fund of $10 million in initial capital injected by Founder, Robert Gryn, Metahero plans to pay $1000 in HERO to “incentivize millions to get scanned”. If hypothetically, all $10 million is used up in incentives, the company will only generate 10,000 3D scans, a far cry from the 10 million people they plan to pull into the Metaverse with this technology or even the 100,000 planned for 2022. The real-world economics of HERO looks tricky.
HERO token could take off in the next 12 months if:
Metahero somehow hack the high-level partnerships and marketing needed to make physical 3D scanning a hit.
Alternative services like features from Apple/Samsung don’t catch up in time or continue to prove inadequate.
The company nails the economics of 3D scanning post incentives - that they are able to offer this service at a sustainable price.
Would you invest 2 cents in HERO, yes or no, and why?
Please comment below.
Hard pass. So far, this reminds me of 7-D motion theatres; scale is very hard to achieve and like you mentioned smartphones can only get better. We've seen memojis take off really big in recent times. Also, I think stickiness is hard since there's no need for recurring use.