Learn about the metaverse with Cointelegraph Consulting
As non-homogenized token (NFT) sales go through a nearly two-month dry spell after peaking in May and then seeing a resurgence, one particular NFT token application is becoming more popular than ever: the meta-universe. The meta-universe has recently gained media attention with big moves by companies like Facebook and Epic Games. However, despite the hype, not everyone – even those who have been in the crypto space for a long time – understands what the metaverse is. But as more and more companies, celebrities and artists dabble in the field, it has become another area worth considering in depth.
A metaverse is a network of virtual environments in which people can interact with others, digital objects and the physical world through their own avatars. While definitions of metaverse vary, they all revolve around technologies such as virtual reality, augmented reality, digital twins and blockchain, and Herman Narula, CEO of Improbable, describes metaverse as “something more than a game but less than the real world. The metaverse is to virtual worlds what websites are to the Internet.”
The metaverse trend
For weeks, Mark Zuckerberg has been touting the metaverse. The Facebook founder sees virtual worlds as the next iteration of human interaction online. Zuckerberg believes Facebook is moving from a social media company with a range of connected applications to a metaverse company with a range of connected experiences. Its recently launched “Horizon Workrooms” is a step in that direction. It is also in the best position to achieve its metaverse goals, as it has invested heavily in VR technology over the years.
Another example is game and software developer Epic Games, which has certainly made its mark on the metaverse with successful virtual concerts by Ariana Grande, Travis Scott and Marshmello in its flagship game, Fortnite. In April, the company secured $1 billion in financing, including a $200 million investment from Sony, which will help the company pursue long-term growth opportunities through the metaverse, especially since the company is already reinventing the future of live events.
Why enter the metaverse?
The metaverse offers a very unique experience for everyone. It’s a way for artists to have more interaction with their fans, and perhaps even more personal interaction, moving up a level from the live streaming format of artists like Post Malone, Dua Lipa, Gorillaz and others when the new crown epidemic broke out in 2020.
Facebook’s Horizon Workroom, on the other hand, aims to provide a more interactive environment for remote workers – a virtual conference room to replace boring Zoom conference calls. Others agree that the metaverse will have a variety of applications. For example, the education system could benefit from allowing students, especially in the medical field, to receive simulated training rather than the one-way communication of a teacher simply lecturing to students.
Metaverse and NFT
The combination between the metaverse and non-homogenized tokens comes from the ability of NFT to add certificates of ownership or authenticity to assets that belong to the digital world. Projects like Decentraland, The Sandbox, Landemic, CryptoVoxels, and SuperWorld all involve the purchase of a portion of such digital assets, primarily virtual lands. nft helps verify uniqueness and even provenance.
For example, Decentraland is based on the ethereum blockchain and uses the ERC-721 token called LAND to facilitate transactions in virtual lands called parcels (plots). This makes each parcel of land unique and helps users establish ownership of a particular parcel of land across the Decentraland estate. This is built on top of its consensus layer, which maintains a ledger that tracks the ownership of each parcel.
LAND tokens enable owners to do all sorts of things with their digital real estate, such as host games, organize tournaments and events, and even rent it out. The same concept applies to The Sandbox, which is the second largest metaverse NFT project in terms of sales after Decentraland.
Meta-universe and cryptocurrencies
Cryptocurrencies are the medium of exchange in metaverse, allowing users to trade virtual goods. The two aforementioned metaversees allow players to be able to trade using cryptocurrencies. decentraland’s ERC-20-based token MANA is the legal tender for users to purchase digital lands, as is The Sandbox’s SAND token. Such a token also gives users the opportunity to participate in its development.
Users can use MANA tokens to vote on policy updates, land auctions and new development subsidies on Decentraland, and users can use SAND tokens for more or less the same purpose. In addition, cryptocurrencies could further open up the possibility of trading goods from different games or metaversees on interoperable markets.
Growth of the metaverse
At this stage, the metaverse has not yet reached its full potential, and companies are just beginning to explore ways to enter the space. facebook and Epic Games are just two recent examples of companies that have joined this trend. However, companies like Microsoft and Amazon are also jumping on board. Amazon, in particular, is developing a virtual “Amazon Mall” where users can shop and interact with the products they want to buy. But whether NFT will be supported remains uncertain, and even unlikely.
Nevertheless, NFT sales from the metaverse are gaining a strong foothold compared to other categories. At one point in the second quarter, its weekly sales reached $8 million.
Metaverse NFT weekly sales Source: NonFungible
From 2017 to August 2021, total metaverse NFT sales reached $138 million, enough to account for 6.77% of NFT sales. This puts the metaverse NFT category in third place in NFT sales, behind digital collectibles and art.
Sales of different categories of NFT Source: NonFungible
This number is likely to increase significantly by the end of the year as more and more well-known names and large companies join the trend. Overall, the growth of metaverse and NFT is unprecedented, especially in 2021. Meta-universe NFT sales are already up 428% over 2020 and have grown an average of 149% over the past four years. If this explosive growth holds, it would not be surprising to see sales top the $120 million mark by early 2022.
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