At Crypto Explained, we are on the mission of making crypto easy for everyone.
If you appreciate our effort, don’t forget to subscribe to receive our weekly Newsletter! I’m grateful for the support!
Similar to Web 3, Metaverse seems to be another one of the buzzwords that’s been repeatedly used in the tech and crypto world. If you had not heard of it before, chances are you did when Facebook announced the rebranding into Meta, precisely to focus on developing the Metaverse.
But as usual, first things first…
What is the Metaverse?
Well, it’s the fancy word to refer to the
virtual world with more immersive experiences empowered by virtual reality or augmented reality tools
. As a user, you can interact, play, socialize in this digital realm that combines real-life and fantasy scenarios.
Users can access Metaverses via computer, handheld device, or complete immersion with a VR headset.
Is this just in the crypto space?
The recent boost the Metaverse has been experiencing is definitely due to crypto, but it is important to clarify that it existed for some years now, especially in gaming, and it’s certainly not exclusively a development happening in the crypto world.
However, the Crypto Metaverse utilizes blockchain as the underlying technology and therefore enabling crypto assets and tokens to be part of the economy. This, combined with new VR and AR tech, sprouted a number of possibilities.
So what’s all the fuzz about?
The hype around this is that it is a complete new frontier and market that is “free” for grabs: an entire economy can exist within this digitilized world.
The belief is that the Metaverse will be the next frontier of the Internet.
According to Grayscale Investment, there is a potential 1 trillion global market for metaverse goods and services.
Users can shop outfits for their avatars just like we do in the real world.
Users can go play games at a casino.
Users can go pay an entry fee to visit a museum with exclusive and rare digital art and collectibles (NFTs).
You get the gist. Basically all activities we do in the real world can be replicated in a way in this digital universe. Except here you can interact with anyone, anywhere in the world.
It might sound crazy at first, but think about how much of our identities, socialization, work, and any other form of interactions are already happening online. Do you think our future will be more or less digital? We all know the answer.
Some of the biggest projects in the Crypto Metaverse:
Decentraland (MANA) is a virtual reality platform where people can buy, sell and manage their own virtual property.
The Sandbox (SAND) as Decentraland’s closest competitor, has a similar offering centered around giving users a virtual environment to create, explore and socialize in.
Axie Infinity (AXS), as the most popular Play to Earn (P2E) crypto game, currently doesn’t fit into the stereotypical VR game type, but it is definitely an important part of the crypto Metaverse development, using NFTs, and with a roadmap to implement a virtual community.
Enjin (ENJ) is a marketplace where you can mint, buy and sell virtual goods represented by NFTs, which is critical infrastructure for users to trade in this digital economy.
What are the latest trends?
As I said earlier, an entire new economy can happen in this digital realm, so let’s answer this question by taking a look at the latest trend per industry that are the first being disrupted by this space:
Gaming
Gaming has always been dominant in the entertainment space, and it is connected to its fast adoption of the Internet’s new medium and business models.
Therefore, with the rise of crypto, it’s no surprise that Gaming is leading the way.
Gaming industry has gone through a revolution with the introduction of NFTs as well as Play to Earn (P2E) mechanisms that incentives fast adoption.
Imagine playing games and earning rewards in tokens that can then be exchanged into real world money. This is how Axie Infinity experienced the mind blowing growth as pioneers in this space.
This trend is definitely here to stay.
Real Estate
If everything that happens in the real world can be replicated in the Metaverse where users can pursue different activities, like shopping, concerts, gatherings, etc, then they will need a specific location to do this.
Think of it like a virtual monopoly game, where there are different parcels.
Each platform has a limited number of parcels, and this scarcity is what makes this highly risky and speculative opportunity so attractive. Investment in real estate in the Metaverse means that once you own it you can earn money by developing digital property and leasing it out.
Examples of some early investors:
Republic Realm made a 4.3M investment to purchase a city like space in Sandbox.
Tokens.com paid 2.5M to own the fashion district in Decentraland.
Speaking of Fashion, right segway to the next industry that is taking advantage of the metaverse
Fashion
In the real world, we care about how we dress and look. A lot. It’s not just to make ourselves feel better, but also a way of expressing who we are.
Now imagine a world where you spend most of the time on the Internet, and the world mostly knows you through your digital avatar. You probably would be willing to invest in your looks then.
Fashion brands that have made a move in this segments so far, are Ralph Lauren, Balenciaga, Nike, Dolce & Gabbana, Adidas, Gucci, and counting.
There is even confirmation of the first ever Virtual Fashion Week on the 24th to 27th of March, calling on designers and fashionistas to get their virtual collections ready for the runway. This event will be hosted on Decentraland (partnership between Decentraland and UNXD, a luxury marketplace).
What are the features enabled by crypto?
Now let’s understand a bit the technical features that blockchain and crypto are bringing to the Metaverse:
Provable ownership and provenance: by using NFTs, users can prove they own the assets as well as their authenticity.
Decentralization: crypto metaverse projects tend to be decentralized, with interests more aligned to the players and users, with incentives and rewards in the right place, in comparison to the extractive model of the old school. this means that ownership is shared across participants.
User Governance: because it’s decentralized, users can govern key decisions via governance tokens and their unique DAOs structures, turning this into more of a community than just gaming.
Real-World Value: because crypto metaverses use crypto tokens, its connected to the wider crypto economy, and therefore can exchange with fiat currency, and sell/buy in the marketplaces.
Final Thoughts
As more and more things are happening online, the way we interact with people will become increasingly more “real” in a way. The next generations will not be content with a 2D paradigm of scrolling and swiping no more, they will want a much more immersive experience, and big moves are happening to make this possible.
It is important to realize that the crypto metaverse has started to combine all the right ingredients together:
the use of blockchain technology enables the possibility to tap into the wider crypto economy,
this way, virtual items become exchangeable for real-world economic value beyond the boundaries of the metaverse,
additionally, the immersive environments that are empowered by the likes of VR and AR massively boost the level of engagement, be it games, networking, socializing or any other kind of interactions, resulting in the mass adoption of people.
BUT, and it is in capital letter, this is a nascent space within the nascent crypto industry, which gives us a good sense of how risky and volatile this space can be. However, it is this kind of high risk high reward possibility that is attracting people into it, hoping to catch the next boom.
Have you ever watched the movie Ready Player One? Maybe not so far away after all.
Thanks for making it this far! If you enjoyed it, make sure to like and share so more people can benefit from it. Also subscribe to receive similar content. I will also be grateful for you helping grow this Newsletter!