The rise of blockchain, metaverse, and Web3 technologies has led to rapid adoption across all sectors of the economy. The government sector is no exception. Perhaps one of the most compelling examples is the recent announcement that the US military is building its own metaverse.

There is no one precise definition of a metaverse. Rather, there will be many metaverses, each of which will have different characteristics. We view metaverses as a confluence of technologies and business models including those set forth below. While the term “metaverse” has received a lot of attention recently, many of the technologies and business models involved are not new.

Some of the core technologies used in metaverses, such as virtual worlds, have been used by the government for over a decade. But advances in some of the other technologies used, including AR/VR and blockchain have catapulted the usability of metaverses.

The version of a metaverse used in the recently announced US military deployment includes augmented reality, artificial intelligence, and video game graphics, for instance, to enable fighter pilots to practice dogfighting against virtual opponents, including Chinese and Russian warplanes while pulling several Gs. Red 6, the company that’s developing the technology, says this delivers a far more realistic test of a pilot’s abilities than a conventional flight simulator. “We can fly against whatever threat we want,” says Daniel Robinson, founder, and CEO of Red 6. 

This is not the first, and likely will not be the last, major government-related use case in this space. As we covered back in 2019, blockchain has a number of applications for defense-related purposes. And, of course, government adoption of blockchain and other Web3 technology means government contractors will need to understand and enhance their capabilities to participate in this market. Some of the issues for contractors to consider are laid out in our prior paper on What Government Contractors Need To Know About Blockchain.

All of this creates great opportunities for the government and government contractors, as well as those companies looking to expand their business to include government contracts. But with these opportunities come a number of legal issues of which those operating in this space must be aware. Companies interested in participating in government-related metaverse projects need to have competent government contract attorneys, but must also be aware of the unique legal issues that can arise with metaverse deployments. We provide an overview of some of the legal issues with metaverses in our article Metaverse Law and Legal Issues.