Metaverse And Its Link With NFTs
Because Metaverse is trending right now, let’s discuss it. The definition of Metaverse may differ according to the diverse opinion of tech futurists, but its core concept remains the same. Metaverse strives at redefining our digital experiences. Note that Metaverse can be both centralized and decentralized. The concept of Metaverse given by Facebook and Microsoft is centralized as there would be a central authority that has the right to control the Metaverse and its users’ activities.
Since the future is decentralized, our focus, in this insight, is blockchain-powered or decentralized. Moreover, we will discuss the role of NFTs in the virtual space of the Metaverse. This way, we will provide convincing answers to the questions- how do NFTs link to the Metaverse, and why do there’s so much hype around NFTs and Metaverse?
- What is Metaverse?
- What are NFTs in the Metaverse?
- How does NFT work in the Metaverse?
- How do NFTs shape the future of Metaverse?
- How can businesses leverage NFTs in the Metaverse?
- How can LeewayHertz help?
What is Metaverse?
Metaverse is an immersive 3D virtual world focused on creating a more exciting digital experience. Neal Stephenson’s first coined the term in his science fiction novel, Snow Crash, in the year 1992. But, the modern Metaverse is far different from the initial version, and it’s a hypothetical iteration of the internet, which is regulated through VR and AR technologies.
The concept of Metaverse is currently new for everyone. Companies are putting their time, investment, and effort to discover unique Metaverse by leveraging existing technologies such as blockchain, NFTs, VR, AR, and AI. In this regard, let’s dive a little deeper into the Metaverse world and understand how it will change the existing web world. Check out this detailed insight on Metaverse for a dedicated explanation.
What are NFTs in the Metaverse?
NFTs are non-fungible tokens that represent someone’s ownership of digital assets such as social media posts, digital art, painting, signature, and so on. In addition to tokenizing the intangible or digital content, NFT can also represent the tokenized version of real-world assets, including land and building.
Non-fungible tokens and the underlying technology of NFTs play a crucial role in developing the Metaverse. NFTs exist on the blockchain, which was initially useful to trade digital assets, and now it has diverse use cases. If we demonstrate the role of NFTs within the digital environment of the Metaverse, NFTs integrate with existing VR and AR technology and thus regulate the whole space.
It means that NFTs in the Metaverse can represent ownership for anything, including in-game assets, virtual avatars, and real estate properties (digital version). Similarly, Metaverse-based NFT marketplace allows the user’s avatars to explore the marketplace, take a closer look at the digital products, and choose the product of their choice.
Like every other innovation, the Metaverse is also undergoing various experiments, and many organizations are trying to launch new-age projects by leveraging the underlying technology of Metaverse. In this regard, let’s explore the Metaverse world and understand how it transforms the digital world.
How does NFT work in the Metaverse?
NFTs work in the Metaverse as real-world objects work in the existing universe. Simply put, NFTs are the key component of the emerging Metaverse where viability heavily relies on the tokenization of assets.
Every Metaverse project, gaming or enterprise, has to blend NFTs and Metaverse to utilize their combined benefits. Some tech experts even consider Metaverse and NFTs corresponding with each other.NFTs have multiple utilities in the Metaverse. From granting ownership of assets to powering interoperable blockchain games, the role of NFTs is integral.
NFT technology is essential to grant true digital ownership to the asset owner. However, the major reason NFTs are so popular in the Metaverse is their viability in blockchain games. Interoperable games drive the development of gaming Metaverse by complimenting the virtual world. A further role of NFTs in the Metaverse includes:-
- Metaverse provides users access to their digital avatars (the replication of real-life identities) through NFTs. Every avatar is tokenized to prove ownership for the respective character.
- Events held in the Metaverse, like music concerts and live events, use NFT ticketing technology to distribute tickets to the desired audiences.
- Trading in-game collectibles and accessories like skin, armors, and tanks are bought and sold using the NFT system to provide ownership and transfer it for trading in the secondary market.
How do NFTs shape the future of Metaverse?
NFTs can transform the way users interact with traditional social media paradigms and socialize with each other. Let’s figure out how NFTs can disrupt the existing digital world:-
A fair and transparent economy
Metaverse allows businesses and users to replicate and port real-world assets into the Metaverse’s decentralized virtual space. One prevalent means of integrating more digital assets on the Metaverse is play-to-earn games. Such games drive engagement among the players and empower them by providing benefits like in-game lending and trade activities.
With NFTs, players can participate in play-to-earn games and earn their contributions. Most of these games involve guilds that act as intermediaries to purchase gaming assets, collectibles, land, and other properties. The responsibilities of guilds also include funding the players who ran out of capital.
This helps promote a transparent and fair economy as anyone can join play-to-earn games and earn yield even when they are just starting with zero capital in hand.
Next-generation of social experiences
Metaverse is here to redefine existing social experiences, and NFTs play a crucial role. Holding unique NFT avatars, users can prove their identity among various avatars available in the virtual space. Brands can use their NFT avatars to interact with targeted audiences, discuss the perspectives of their projects with like-minded people, and thus solve many problems.
Owing to the NFT avatars, social media users can meet the avatar of their connection or social media friend rather than having a text-based chat or video call. Since NFTs have non-fungible properties, each NFT avatar is unique and has a real-world identity. Plus, users have complete freedom to design and curate their personalized virtual avatars on the Metaverse.
Virtual real estate trends
Users can also buy virtual properties in the Metaverse like the real world. The underlying blockchain technology and NFTs let users hold ownership and develop virtual real estate based on their choice. Users have the freedom to buy and sell these virtual properties and rent them for passive income.
Moreover, they can build different structures such as online stores on the virtual land and utilize these spaces to host social events. Decentraland is one of the best practical examples of how virtual products are auctioned in NFTs. The idea of virtual real estate has attracted many industries as it enables the selling of tickets and merchandise online.
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How can businesses leverage NFTs in the Metaverse?
There are many ways businesses can leverage NFTs. Physical boundaries no longer bound any enterprise as Metaverse provides them with a virtual world with no the physical world’s limitations. Below are the top three ways NFTs can benefit businesses.
Trading Virtual products
NFT trading in the Metaverse is prevailing. This virtual product can either be the digital representation of a real product or a ‘unique’ product that exists only virtually, like tweets and png images. Even though these products do not physically exist, people spend huge real money buying them.
In the realm of the Metaverse, people owning virtual products gains similar benefits to buying one in real life. Like, it’s not surprising if you see someone spending thousands of dollars to drive a high-end racing car to win a race. Not just buying, the avatars in the Metaverse interact with each other to discuss deals and buy/sell assets via NFTs. Hence, NFTs serves as a crucial component for trade and exchange-related activities for the Metaverse.
Reaching Worldwide audience
Long before the NFTs were popular, few brands could forecast its immense benefit and started NFT technology to boost their brand. When everyone understands the scope of Metaverse and NFTs, worldwide companies are using virtual products and NFTs to reach a wider audience.
The gaming industry is the early adopter of NFT technology, and it holds the potential to attract younger audiences more than any blockbuster movie or sports broadcast. Nowadays, even popular brands sell the digital version of their product before the real product is introduced in the market. This way, NFTs help brands to gain popularity among potential audiences and effectively engage them.
Easy transfer of ownership
NFT has evolved much with widespread real-world use cases across major industries. They are no longer used just to buy and sell digital assets, but luxury fashion brands started promoting their product and services by distributing relevant NFTs.
The exact scenario appears inside the Metaverse where brands launch their NFTs and people invest in them. Also, the transfer of ownership is regulated through NFT technology so that immutability remains there. For gaming, NFTs acts as easy means to trade gaming collectibles while retaining original ownership of these assets.
Maintaining digital scarcity
Counterfeiting is one of the biggest problems for many industries. Even big brands struggle to maintain the value of their products, knowing that they can be counterfeited and sold at cheaper prices. In the real world, details of the product and design specificities separate replicas from the original product, but how can scarcity be maintained in the virtual world? That’s where NFTs helps.
NFTs are powered by blockchain and its non-fungible, which offer immutability in records and unique ownership features. Products, be it avatar or digital asset, once tokenized with NFT, cannot be replicated even though virtual products are easy to replicate. Without digital scarcity, it’s hard to seek survival in the Metaverse as anyone can counterfeit products and damage the whole system.
How can LeewayHertz help?
LeewayHertz offers a complete range of blockchain development services for mega and futuristic projects like the Metaverse. Our Metaverse developers comprehend technologies like AR, VR, 3D visualization, cryptocurrency, DeFi, and NFTs. Following are the main Metaverse and NFT development services that we offer. Following is a glimpse of our Metaverse and NFT development services.
Our developers are versed with technologies that support the development of Metaverse projects. We offer the development of decentralized Metaverse world, 3D space development, Metaverse marketplaces, and metaspace marketing.
- Hands-on NFT development like decentralized NFT marketplace development.
- NFT integration on the Metaverse marketplace.
- Creating and minting digital avatars for your Metaverse world.
Metaverse is currently in its early stage, and its horizon is constantly expanding with big corporations investing in this technology and launching various feasible use cases. We frequently hear about unique Metaverse projects being launched with distinctive attributes. It signifies the coming version of the Metaverse, which must be much more advanced than the Metaverse we explore today.
Of course, the evolution of virtual reality, increasing accessibility of the internet, and the mass option of blockchain technology will complement the Metaverse, helping it cater to the rising trends in demand. However, we all look forward to living in the decentralized interoperable Metaverse and utilizing its benefits. Let’s brace ourselves to experience the fantastic possibilities that Metaverse is yet to bring for all of us.
If you want to build a decentralized Metaverse project or optimize your existing project, we are happy to collaborate with you. Please reach our Metaverse team to discuss more.
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