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As nonfungible tokens (NFTs) enter the mainstream, they are ‘on the verge of aging.’ In this next phase, investors are quickly finding new cases of use for NFTs beyond the initial frenzy of digital artwork and archives. A prime example is the seamless connection of NFTs to the Metavers industry, a rapid development that will inevitably shape the NFT application and enable rapid growth in the long run.
Significantly, Metavarsis holds great promise for a more open and equitable economy – backed by decentralized and blockchain. But, in essence, NFTs will serve as a gateway to metavers, as they strengthen the identity, community and socialization of the metavers economy.
When the first NFT was minted in 2015, it is safe to say that recent developments in the metavers industry are now setting NFTs on a new path to the future. As a result, there are plenty of speculative opportunities for businesses, investors and entrepreneurs. Specifically, Metavers relies on NFTs to accomplish the following five mutations.
Opening the next frontier of gaming
The gaming industry is already surpassing all other types of entertainment costs, including amusement parks, movie theaters, concerts and live spectator sports. So it shouldn’t come as much of a surprise that when Mark Zuckerberg announced the name change of Facebook, he mentioned gaming as the leading motivator for rebranding.
Gaming has long been associated with virtual reality (VR) so consumers are already familiar with 3D avatars and world-building. VR gaming today is mostly carried out by a standalone application on desktop, mobile phone or VR headset. This provides a more immersive experience compared to traditional video games. But in Metavers, which is essentially an integrated and interoperable VR space, players can interact with each other and play games through human-computer interaction (HCI).
Single interoperable environment opens the frontier of gaming, further enhanced by social gaming, play-to-earn (P2E) and portable game assets. Notably, NFTs have the keys to unlock all of these concepts. For example, NFTs serve as an in-game currency for P2E. Basically, the more value you add to the game, the more you earn. In addition, the P2E game itself is largely fair and more democratic than traditional platforms. Thanks to the ownership capabilities provided by NFTs, players have full ownership of their assets, instead earnings are controlled by a central game operator.
Promoting the creative economy
The purpose of NFTs is to present innovative or unique assets virtually. While it is not formally a currency, minted items such as NFTs can be sold and traded on virtual platforms. Equipped with this transactional power, NFTs are ushering in the next wave of creative economy.
The creative economy is technically as old as mankind, created by artists, writers and other creators in the physical media. But the term ‘creative economy’ was only officially introduced in the digital age. Today, more than 50 million independent content creators, curators and community builders are part of the creative economy in the United States.
With NFTs connected to a decentralized blockchain, each asset has a code and features that cannot be replicated. In addition, the property cannot be stolen and its value is exclusive to the owner. The code may embed additional rights and obligations, such as a sale-on fee that allows the creator a percentage of any subsequent transactions of the digital asset. The key mechanisms of ‘smart contracts’ and ‘copyright tracking’ will enhance IP rights and ownership, resolving the major problems faced by creators in cyberspace.
The Metavers industry is a big step forward for the creative economy, offering a virtual world where content can gain value and creators can gain equity for their work. These defined features are only possible because the product combines secure, transparent and decentralized NFTs.
Unlocking new social experiences
NFTs will play a leading role in enabling communities, methods of personal identification, and social experiences that will define metavers. For example, users can find specific hobbies or show their support for a project by purchasing NFT assets. As a result, like-minded NFT owners will be able to come together to create communities, share their experiences, and collaborate on relevant content creation.
The NFT avatar is also an important concept in the socialization system of metavars, representing not only the real self of the player but also the identity they envision. Users can use NFT assets to create this identity and gain access to new experiences in metavers.
In Metavers, NFTs can be understood as an extension of our real-life identity, giving us every complete ownership, control and flexibility to create our virtual personality.
Bridging the physical and digital world
It is important to note that the social experiences of the Metawars model can also be transmitted offline, as NFTs effectively bridge the gap between the physical and digital worlds. For example, the Board App Yacht Club (BAYC), a group of primitive avatars created by four nicknamed founders, is entering to combine VR and physical reality. Owners of BAYC NFTs gain access to exclusive club and community specialties, such as new NFT collections, NFT enhancements and first entry into private events in ‘real life’. In November 2021, BAYC hosted a special yacht party and warehouse rev at ApeFest in Manhattan.
Creating a Virtual Real Estate Market
The Metavers industry is also bringing real estate into the new realm, with some “parcels” of the virtual property space being assessed on tune millions of dollars. For example, in browser-based Metavers Decentland, virtual land assets have recently been sold for $ 2.4 million by crypto investor Tokens.com. In addition, in December 2021, the user spent $ 450,000 to become a neighbor of rapper Snoop Dogg’s Snoopers, the interactive world he is developing in the ether-based platform Sandbox.
Effectively, NFTs represent a virtual plot of land and allow it to be transacted. In order to maintain the value of Metavers’ digital real estate market, space is inherently limited. Decentland, for example, consists of 90,000 parcels of land, each measuring approximately 50 feet by 50 feet. This perpetuates the ‘digital shortage’, a concept that has long been debated in relation to cryptocurrencies.
A recent position paper by JPMorgan found that in the six-month period from June to December 2021, the average parcel of virtual land shot on four major meteors ranged from $ 6,000 to $ 12,000. Virtual land is increasing in value just as fast as physical land, although there has been no increase in interest rates that will curb or slow down the price acceleration.
The Metavers industry is still in its infancy and is constantly being shaped by cryptocurrency trends and then reshaping emerging digital behaviors. NFTs are on the same track.
While NFTs enable ownership and virtual identity to be fairly straightforward, the Metavers model creates an interoperable environment with seemingly endless possibilities for customers to gather, socialize, play, monetize, and deal. So, looking ahead, businesses should move from research on their NFT investments to activation, as NFTs are the lynchingpin to create value and engage users in the metavers economy.
Jonathan is the CEO of Teplitsky PipeflareA platform aimed at helping game developers monetize their work.
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