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Metaverse and non-fungible tokens (NFTs) have become a buzz in 2021. A lot of people started discussing metaverses after Facebook’s launch of Meta and the surge of Decentaland and Sandbox projects. At the same time, NFTs have seen a hype in digital art, selling images for huge prices. Metaverse and non-fungible tokens have separate origins and reasons to become popular, but they are already closely interconnected. The combination of these technologies may open the way to numerous new possibilities. However, let’s find out first what they have in common and how NFTs can be used in Metaverse.
How is NFT related to Metaverse?
Some experts break down the metaverse concept into two distinct types of platforms. The first one refers to virtual worlds where people can meet up for business or hang out together. For example, Facebook announced in July it was creating a product team to work on the metaverse for such purposes. Microsoft plans to transform Microsoft and Halo into the metaverse with the same aims. Disney, Epic Games, and Roblox also want to join this trendy theme. But in most cases, large corporations provide ambiguous explanations of how their metaverse will work and look.
The second type centers around building a blockchain-based metaverse using cryptocurrencies and NFTs. Such platforms as Decentraland and Sandbox have received significant support from the crypto community and traditional businesses, allowing users to build their environments and purchase virtual parcels of land. Blockchain also serves as the basis for creating non-fungible tokens, making it one of the main things that unites metaverse and NFTs.
Blockchain-based metaverses give users access to numerous processes such as gaming, communications, finances, and more. Such metaverses point at freedom, claiming anyone can create and play games, join social communities, and exchange NFTs. The current array of use cases allows businesses and users to monetize digital and real-world assets with NFTs and use them in the metaverse frameworks.
NFT as an option in Metaverse real estate
NFTs could give users the confirmation that they own the virtual lands in the metaverse. Since information about the owner is recorded in the smart contract and stored on the blockchain, NFT users can easily prove the ownership of the asset in the metaverse.
One of the most notable use cases in this field includes buying and selling virtual lands and property. For example, Republic Realm purchased a plot of virtual land in The Sandbox metaverse for $4.3 million in November 2021. Virtual landowners can rent the land for passive income or develop various structures as NFT exhibitions, online shops, or virtual houses for avatars.
Virtual space also attracted interest from music artists as they can sell tickets as NFTs or sell digital merchandise on virtual lands. In October 2021, Decentraland metaverse hosted the first music festival with 80 artists, headlining Deadmau5 and Paris Hilton.
NFT as identity in Metaverse
If there is a virtual land, then there should be avatars who will visit and own this land. Avatars represent a metaverse visitor’s real or imagined self. So an avatar can be some piece of digital art or identity representation, and it’s the field where the NFT concept has already established itself. People can buy NFT avatars using numerous NFT marketplaces that are available on specific blockchain networks. For example, if you want to buy NFT on BSC, then you need to find where to purchase Binance coin instantly. At the same time, if you are interested in NFT available on Opensea, you need Ethereum to purchase it.
NFT may serve as an extension of real-life identities or as an access token to different locations within the metaverse. Users may also hold certain NFT assets to signal support of a project and join the community of owners. For example, identity-shaping avatars from CryptoPunks and Bored Ape Yacht Club collections grant their holders exclusive access to closed communities, offline/online private events, and limited content.
Gaming in Metaverse with NFTs
If you want avatars to stay in the metaverse, then you need regular activities that can bring value to people. One way the metaverse could open up to more real-world assets and attract users is by using interoperable blockchain games and innovative gaming models.
New gaming models such as play-to-earn could become approaches that empower players of blockchain and increase engagement. Axie Infinity is one such example. It is a blockchain game where players raise and battle hordes of small round monsters called “Axies”. Monsters can be bought or sold on Axie Infinity’s marketplace as NFTs. Axie Infinity gained over 2 million active players in 2021 and has become largely popular in South-East Asia during the pandemic since it allows people to earn crypto while playing.
With NFTs, gamers may take part in in-game economies and get rewards for the value they add to other players and the whole metaverse. Players who own in-game NFTs have full ownership of their assets. But if the game gets abandoned, it raises a question about the value and utility of such NFTs. That is why interoperability is essential for blockchain games within the metaverse.
Play-to-earn may see an increase in popularity with the rise of guilds and other socializing options among players. Guilds act as intermediaries that facilitate purchasing in-game NFT resources like land and assets. They lend them to players to earn yields from players’ activity. Players who don’t have the upfront capital to own NFT and start the game may use guilds to get a head start. It lowers the entry barrier for such games and allows players around the world to participate in the metaverse economy.
