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Avatars: Bridging the Physical and Digital Worlds

1 min read · 127 views Bong-Geun Choi May 01, 2023

One objective of the metaverse is to create immersive 3D digital worlds in which individuals may interact.  Truly realistic representations of humans in these digital worlds is needed to facilitate such an immersive experience.  Avatars look to fulfill that need.  As technology advances, so will metaverse experiences, increasing the demand for avatars with greater functionality.  What may the avatar of the future look like?


What Is an Avatar?

An avatar is a digital or on-screen representation of individuals in the virtual world.  It allows users of metaverse technology to depict themselves in digital worlds.


Ability to Customize 

Current technology allows users to customize their avatar, or the way they depict themselves online.  Options such as skin color, body shape, and hair styles are available.  Additionally, users may change the appearance of their avatars daily or based on situation, much like individuals in the real world would change clothes and looks for different occasions.


Thus, avatars allow metaverse users to depict and express themselves digitally.


Is Emotion and Facial Expression Next?

Metaverse technology is advancing, allowing for more immersive experiences.  Digital town squares are inviting more social interactions among metaverse users, gaming is becoming more interactive, and concerts and other entertainment options are being held virtually. Additionally, applications such as virtual workspaces, conferences, and meetings are facilitating more digital interaction. 


To facilitate more immersive digital experiences, avatar technology will likely evolve to produce more lifelike on-screen representations.


Meta, which was formerly known as Facebook but changed its name to match its metaverse aspirations, is working on new avatar technology that allows for more hyper-realistic digital representations.  It is using artificial intelligence (AI), sophisticated modeling, and electromyography to render human features and movement accurately in virtual space.[1]


Other avatar technology being worked on includes projecting facial expressions and emotional responses onto the avatar.  Technology companies are looking at ways to capture real-time facial expressions from a user’s camera and translate it onto the avatar.  These changes may allow for richer, more immersive metaverse experiences.


The Importance of Avatars

Avatars allow users to manifest themselves visually in a virtual world. Advances in avatar technology may allow for more immersive experiences.  One example is in a virtual workspace where more realistic avatars capable of expressing emotion and facial expressions may help to facilitate greater participation and communication, mimicking the real-world work environment more closely.


Avatars may also make users feel like they are truly present in the virtual world, facilitate greater interaction, and create fluid and seamless movement within and between digital worlds.


Improving avatar technology may facilitate a better metaverse experience.


How may individuals gain exposure to metaverse-related companies?


The Fount Metaverse ETF (MTVR)

The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index.  The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.


MTVR may be an attractive vehicle to gain exposure to metaverse-related companies.

For a full list of MTVR holdings, please click here.




[1] Cureton, Demond, The Role of the Avatar in the Metaverse, XR Today, 12/15/22; Greener, Rory, Meta Quest Pro to Leverage Interoperable Immersive Services, XR Today, 10/24/22


Bong-Geun Choi

Chief Economist


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Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 855-425-7426 or visit our website at www.fountetfs.com. Read the prospectus or summary prospectus carefully before investing.

Exchange Traded Concepts, LLC. serves as the investment advisor to the Funds. The Funds are distributed by SEI Investments Distribution Co., (SIDCO) 1 Freedom Valley Drive, Oaks, PA 19456. SIDCO is not affiliated with Exchange Traded Concepts, LLC. or Fount Investment Co. Ltd.

Risk Disclosure:


Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated objectives. In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or social, economic, or political instability in other nations. Emerging markets involve heightened risks related to the same factors, as well as increased volatility and lower trading volume. 


The Funds’ concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors. For MTVR, the Fund may be concentrated in the entertainment and interactive media & services industries. The entertainment industry is highly competitive and relies on consumer spending and the availability of disposable income for success, which may cause the prices of the securities of companies to fluctuate widely. The prices of the securities of companies in the interactive media & services industry are closely tied to the overall economy's performance. Changes in general economic growth, consumer confidence, and consumer spending may affect them. MTVR may also be subject to the specific risks associated with metaverse companies. These risks include but are not limited to small or limited markets, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Smaller, start-up companies tend to be more volatile than securities of companies that do not rely heavily on technology. Metaverse Companies may rely on a combination of patents, copyrights, trademarks, and trade secret laws to establish and protect their proprietary rights. There can be no assurance that these steps will be adequate to prevent the misappropriation of their technology or that competitors will not develop technologies that are equivalent or superior to such companies’ technology.


For SUBS, the Fund may be concentrated in the software industry. Technological changes, pricing, retaining skilled employees, changes in demand, research & development, and product obsolescence can affect the profitability of software companies causing fluctuations in the market price of company securities. 


Both Funds are subject to communication services sector risk, which can involve the same risks as being concentrated in the software industry. Network security breaches, potential proprietary or consumer information theft, or service disruption can negatively affect companies’ stock prices.


The Funds are non-diversified. The Funds are new and have limited operating histories for investors to evaluate. New and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility.