diff --git a/Cargo.lock b/Cargo.lock
index 8681b48..1ad888f 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -5898,6 +5898,20 @@ dependencies = [
  "indexmap",
 ]
 
+[[package]]
+name = "physnet_client"
+version = "0.0.0"
+dependencies = [
+ "bevy",
+ "bevy_oxr",
+ "color-eyre",
+ "openxr",
+]
+
+[[package]]
+name = "physnet_server"
+version = "0.0.0"
+
 [[package]]
 name = "picking-xr"
 version = "0.0.0"
diff --git a/Cargo.toml b/Cargo.toml
index fbdbfbb..12b763e 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -2,6 +2,8 @@
 resolver = "2"
 members = [
 	"apps/legacy_web/backend",
+	"apps/networked_physics_demo/client",
+	"apps/networked_physics_demo/server",
 	"apps/legacy_web/frontend",
 	"apps/rvid/client",
 	"apps/rvid/server",
diff --git a/apps/networked_physics_demo/README.md b/apps/networked_physics_demo/README.md
new file mode 100644
index 0000000..07b7f58
--- /dev/null
+++ b/apps/networked_physics_demo/README.md
@@ -0,0 +1,15 @@
+# Networked Physics in VR
+
+An implementation of [this excellent GafferOnGames article][article] about
+writing netcode for a distributed physics simulation in VR.
+
+Unlike the original article, this demo will be utilizing WebTransport for its
+networking and will not be as focused on hyper-optimized message payload sizes
+like in the original article.
+
+
+## Project Status
+
+WIP / active development.
+
+[article]: https://gafferongames.com/post/networked_physics_in_virtual_reality/
diff --git a/apps/networked_physics_demo/client/Cargo.toml b/apps/networked_physics_demo/client/Cargo.toml
new file mode 100644
index 0000000..cf38b53
--- /dev/null
+++ b/apps/networked_physics_demo/client/Cargo.toml
@@ -0,0 +1,18 @@
+[package]
+name = "physnet_client"
+version.workspace = true
+license.workspace = true
+repository.workspace = true
+edition.workspace = true
+rust-version.workspace = true
+description = "A demo for Networked Physics in VR"
+publish = false
+
+[lib]
+crate-type = ["cdylib", "rlib"]
+
+[dependencies]
+bevy.workspace = true
+bevy_oxr.workspace = true
+color-eyre.workspace = true
+openxr.workspace = true
diff --git a/apps/networked_physics_demo/client/src/lib.rs b/apps/networked_physics_demo/client/src/lib.rs
new file mode 100644
index 0000000..6201f75
--- /dev/null
+++ b/apps/networked_physics_demo/client/src/lib.rs
@@ -0,0 +1,77 @@
+use bevy::{
+	app::{App, Startup},
+	asset::Assets,
+	core_pipeline::core_3d::Camera3dBundle,
+	diagnostic::{FrameTimeDiagnosticsPlugin, LogDiagnosticsPlugin},
+	ecs::system::{Commands, ResMut},
+	log::info,
+	math::{
+		primitives::{Cuboid, Plane3d},
+		Vec3,
+	},
+	pbr::{PbrBundle, PointLight, PointLightBundle, StandardMaterial},
+	prelude::{bevy_main, default},
+	render::{
+		color::Color,
+		mesh::{Mesh, Meshable},
+	},
+	transform::components::Transform,
+};
+use bevy_oxr::DefaultXrPlugins;
+
+const APP_NAME: &str = env!("CARGO_PKG_NAME");
+
+#[bevy_main]
+pub fn main() {
+	color_eyre::install().unwrap();
+
+	info!("Running {}", APP_NAME);
+	App::new()
+		.add_plugins(DefaultXrPlugins {
+			app_info: bevy_oxr::graphics::XrAppInfo {
+				name: env!("CARGO_PKG_NAME").to_string(),
+			},
+			..default()
+		})
+		.add_plugins(LogDiagnosticsPlugin::default())
+		.add_plugins(FrameTimeDiagnosticsPlugin)
+		.add_systems(Startup, setup)
+		// .add_systems(Update, hands)
+		.run();
+}
+
+// set up a simple 3D scene
+fn setup(
+	mut commands: Commands,
+	mut meshes: ResMut<Assets<Mesh>>,
+	mut materials: ResMut<Assets<StandardMaterial>>,
+) {
+	// plane
+	commands.spawn(PbrBundle {
+		mesh: meshes.add(Plane3d::new(Vec3::Y).mesh().size(5.0, 5.0)),
+		material: materials.add(StandardMaterial::from(Color::rgb(0.3, 0.5, 0.3))),
+		..default()
+	});
+	// cube
+	commands.spawn(PbrBundle {
+		mesh: meshes.add(Mesh::from(Cuboid::from_size(Vec3::splat(0.1)))),
+		material: materials.add(StandardMaterial::from(Color::rgb(0.8, 0.7, 0.6))),
+		transform: Transform::from_xyz(0.0, 0.5, 0.0),
+		..default()
+	});
+	// light
+	commands.spawn(PointLightBundle {
+		point_light: PointLight {
+			intensity: 1500.0,
+			shadows_enabled: true,
+			..default()
+		},
+		transform: Transform::from_xyz(4.0, 8.0, 4.0),
+		..default()
+	});
+	// camera
+	commands.spawn((Camera3dBundle {
+		transform: Transform::from_xyz(-2.0, 2.5, 5.0).looking_at(Vec3::ZERO, Vec3::Y),
+		..default()
+	},));
+}
diff --git a/apps/networked_physics_demo/client/src/main.rs b/apps/networked_physics_demo/client/src/main.rs
new file mode 100644
index 0000000..e14aab7
--- /dev/null
+++ b/apps/networked_physics_demo/client/src/main.rs
@@ -0,0 +1,3 @@
+fn main() {
+	physnet_client::main()
+}
diff --git a/apps/networked_physics_demo/server/Cargo.toml b/apps/networked_physics_demo/server/Cargo.toml
new file mode 100644
index 0000000..fc48faf
--- /dev/null
+++ b/apps/networked_physics_demo/server/Cargo.toml
@@ -0,0 +1,11 @@
+[package]
+name = "physnet_server"
+version.workspace = true
+license.workspace = true
+repository.workspace = true
+edition.workspace = true
+rust-version.workspace = true
+description = "A demo for Networked Physics in VR"
+publish = false
+
+[dependencies]
diff --git a/apps/networked_physics_demo/server/src/lib.rs b/apps/networked_physics_demo/server/src/lib.rs
new file mode 100644
index 0000000..8b13789
--- /dev/null
+++ b/apps/networked_physics_demo/server/src/lib.rs
@@ -0,0 +1 @@
+