Topic 4

NFTs and the Metaverse

Introduction

Have you ever wondered what it would be like to be immersed in a completely different universe where you can play games, shop, and even have Snoop Dogg come rap at your house? This isn’t Marvel’s multiverse. It’s the metaverse. 

 

The metaverse can be an exciting way to experience an entire universe virtually and NFTs are an essential part of that. Aside from the rarity of NFTs in the metaverse, they bring value to users through utility such as customization of avatars and interactive experiences. For example, you can dress your avatar in a fashion NFT or alternate different skin NFTs or equipment NFTs in games. You can even get NFT tickets to virtual events. As more users start joining metaverses, the use case of NFTs increases, making NFTs significantly more valuable.

What is the metaverse?

The metaverse can seem elusive to many, but in the broadest terms, it is a virtual world that can be accessed through the internet. It can be a space where people work, play, shop, and socialize. 

 

A common misconception is that the metaverse is virtual reality (VR). When thinking of the metaverse, it’s easy to think of Meta, formerly Facebook,  or the Oculus headset by Meta that allows you to connect to the metaverse through VR. However, VR is merely one way to experience the metaverse, and Meta is one of many metaverses.

 

Examples of Metaverses

The Sandbox

Cryptovoxels 

Decentraland 

Epic Games

Hyperverse

Roblox

How do you access the metaverse

As previously stated, a popular way to access the metaverse is through a headset, like Oculus but there are various metaverses and not all reuquire a VR headset. Many of the crypto-friendly metaverses can be accessed by connecting your web3 wallet. With PFPs playing such a big role in digital identity, some are now even providing exclusive accesibility subject to the PFP NFT you hold. A great example of this is the Fancy Bear Metaverse. This “metaclub” hosts 8,888 NFTs that give users exclusive access to artists, influencers, top athletes, and Nobel prize winners. 

Different Categories of NFTs in the metaverse

Virtual Real Estate

 

Metaverses have virtual land plots that can be acquired by purchasing NFTs – think of the NFT as a deed to the virtual land. You can buy virtual land in metaverses like Sandbox. In The Sandbox, virtual land, or LAND, comprises 300 sq. ft. parcels, and users can buy, sell, and rent these virtual lots. Like traditional real estate, land properties can be negotiated and enforced through smart contracts – the smart contract is comparable to a lease agreement that defines the terms between two parties

Virtual Events

 

Digital tickets can be sold as NFTs for concerts in the metaverse. Ariana Grande’s concert in the Fortnite metaverse attracted over one million gamers. NFTs in the metaverse can also give you access to virtual parties. In 2021, Snoop Dogg partnered with Sandbox to give out 1000 NFT party passes called The Snoop Private Party Pass. The pass gave holders access to exclusive NFTs, experiences, and even a chance to have Snoop Dogg perform a concert on your land.

Virtual Marketplace

 

The metaverse can become a virtual marketplace for clothing brands, allowing them to offer a unique experience to their customers. One of the first major brands to leverage the metaverse for this purpose was Nike – the athletic apparel giant created “Nikeland”, a virtual marketplace where people can buy Nike’s sneaker NFTs.

To recap

Many people question the value of NFTs IRL, but there’s no question that when it comes to the metaverse, they have value. Their value is derived from rarity, utility, and broadly speaking, culture, and as we see more use-cases developing for metaverse NFTs, we expect their impact to spread, enabling more industries to take part in this exciting space.

Key Terms

Blockchain

“Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.”

 

– IBM

NFT

“Non-fungible tokens or NFTs are cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can be used as a medium for commercial transactions.”

 

– Investopedia