A Step into the Metaverse
The metaverse has garnered a lot of attention lately, with Facebook’s announcement of changing its name to Meta. Mark Zuckerberg, now Meta’s CEO even wrote in a letter, "The metaverse is the next frontier in connecting people, just like social networking was when we got started". But what really is the metaverse?
There isn’t an exact definition to describe the metaverse, however it can be described simply as a virtual world where users can explore and interact with other people who aren’t in the same physical space. The metaverse would be able to serve unlimited users with continuity of data, such as identity, history, entitlements, objects, communications, and payments. Ultimately, the metaverse aspires to bring the digital world more tangibly connected to physical bodies and lives.
The Status Quo
Currently, the closest to the metaverse are virtual world games which run on blockchain and cryptocurrencies. One of the largest metaverse games, with over 1.8 million daily players, Axie Infinity is a play-to-earn game where players earn money by breeding, trading, and battling pet characters called Axies. The money earned are its in-game cryptocurrency called Axie Infinity Shards (AXS). AXS works the same as other cryptocurrencies, it can be exchanged into other cryptocurrencies and fiat money. In fact, AXS even soared from $3.22 in June to around $94 now with a market capitalization of around $5.7 billion.
List of Highest Valued Metaverse Currencies Based on Market Capitalization
Source: CoinMarketCap
Running The Digital Economy with NFTs
NFTs or non-fungible tokens have been heavily associated with the metaverse. NFTs which is linked to blockchain are virtual goods which, like its name, are not fungible, meaning no other NFT is the same. It is a way of recording ownership of a specific virtual good. The metaverse, also viewed as a digital economy, comprises of creating and transferring virtual goods, making NFTs a useful financial architecture for the metaverse. Sandbox, another metaverse, similar to Minecraft utilizes NFTs for its virtual properties, selling NFTs called LAND, which essentially is a piece of 96x96 meters virtual land where users can utilize to earn SAND, Sandbox’s cryptocurrency. The transactions made in these metaverse for NFTs are not a trifling sum. One of these LANDs was bought for $4.3 million, making it the most expensive metaverse property sale.
Investors in Metaverse Space
The metaverse has started to pique investors’ interest as notable investors such as Softbank and Sequoia entered the space. Recently, Softbank invested $150 million in Zepeto, a South Korean fashion metaverse ecosystem and Sequioa put its stakes in Faze, an NFT cricket startup. Companies related to the metaverse (tagged under gaming, online games, virtual worlds, and augmented reality) have raised nearly $10.4 billion so far this year, totaling 612 deals according to Crunchbase. Just last year, it was nearly half the amount of investment.
Final Thoughts
Metaverse in the 2020s is like the Internet in the 1970s, no one is quite sure about it and how it is going to evolve. NFT gaming is the first step into the metaverse, it is, however, nothing but a small manifestation. The true realization of the metaverse is deemed to be a long way off, but would it eventually materialize like how the Internet did?