What Is The Role Of NFTs In The Metaverse?
NFTs have become a sensation in the digital realm. Today, NFTs have transformed major sectors like art, entertainment, gaming and fashion.
However, it is now being seen as a major part of a new technological world, known as the metaverse. It has become an inseparable part of the metaverse which drives its decentralized economy. Moreover, NFTs in the metaverse also enhance user social experiences and secures their digital identity and ownership.
The compatibility of NFTs with metaverse also plays a major role in its market expansion. According to experts, NFTs could enter high-end industries like fashion and entertainment only due to their relativity with the metaverse.
Moreover, the blockchain games bring metaverse and NFTs closer. It is a fine example of how NFTs could smoothly function on metaverse platforms.
According to market statistics, the metaverse market will reach $800 billion by 2024. Experts believe that NFTs will play a prominent role in making metaverse a success in future.
Let us have a look in detail at how NFTs influence the metaverse platforms.
Understanding NFTs & Metaverse?
Before we look into how NFTs are an integral part of the metaverse, let us understand what is metaverse and NFTs.
What Are NFTs?
As we all know, NFTs are non-fungible tokens. It is a type of digital token built on the blockchain network. NFTs represents all kinds of assets like music, photo, video, memes, art or in-game items. Owning an NFT means you have the ownership rights and proof of authenticity of the asset it represents.
The innovative technology of NFTs was developed by Kevin Mc Coy. He envisioned using technology to empower artists and creators. He believed that technology could give them complete authority over their creations.
What Is Metaverse?
Metaverse is a highly immersive 3D virtual world offering real-life experiences with the help of VR and AR technology. It is a concept evolving from a bigger concept of Web 3.0. In the metaverse, you work, socialize, attend events, play games and even shop all in one place.
Today, we have multiple metaverse platforms like Decentraland, Sandbox, Alien Worlds, Nakamoto, Roblox and others. You can buy virtual land, socialize and attend online concerts on these platforms. Over 33 million people attended Lil Nas X’s show on Roblox.
Mostly these platforms host play-to-earn games where you can complete missions and win rewards. Rewards can be in the form of native currency or NFTs. The best thing is that you can cash out these rewards.
Decentraland NFTs and virtual property sales have generated over $25 million. As of now, players on the Roblox metaverse platform have spent around $652 million on its native currency, Robux.
The metaverse we see today is in its initial stage. Developers and tech companies are looking forward to building a more mature and advanced metaverse. The need is to create a virtual ecosystem that encompasses all metaverse platforms.
Meta has invested around $50 million to support the growth of metaverse. Several other big tech companies like Microsoft and Apple are investing billions to expand their reach into the metaverse.
Decoding The Role Of NFTs On Metaverse platforms
Meta has called the metaverse the future of the internet. NFTs will play a key role in realising a well-functional and interoperable metaverse platform.
Here is how NFTs will contribute to developing a highly advanced metaverse ecosystem.
Decentralized & Fair Economy
Similar to the real world, a virtual world like metaverse also needs a structured economy. Without a systematic economy, the flow of assets and value will be disrupted. Moreover, in absence of a smooth economy, the virtual world will fail to offer an engaging user experience and establish itself.
Every metaverse platform has its own native currency. You can use the native currency for all transaction purposes on the platform. However, it is the NFTs that give strength to a decentralized and fair economy in the metaverse.
NFTs help businesses, brands and creators port their real-world assets into the metaverse. They can easily market and sell their assets as NFTs on metaverse. Moreover, NFTs also enable businesses to sell merchandise, increase fan engagement and promote their brand.
A four-day metaverse fashion show was organised on Decentraland in March 2022. Over 50 brands participated in the event. Some of the big names were Selfridges, Estée Lauder, Bulova, Tommy Hilfiger, Dolce & Gabbana and Etro.
It was a free event for all visitors. Moreover, you could even buy the NFTs of the accessories showcased at the event. The interesting thing was that your online avatar can wear the accessory or clothes you bought as NFT in the metaverse.
Daler Mehndi opened his merchandise store in the metaverse. The store is quite popular among its fans who can buy exclusive branded merchandise NFTs from there.
Another use of NFTs in establishing a fair economy is through blockchain games. These are play-to-earn games on metaverse platforms. You can participate in these games and win valuable NFTs.
Moreover, as a player, you have complete ownership over your creations and in-game items. You can also sell your in-game items like avatars, skins, pets and weapons as NFTs on marketplaces.
NFTs also make blockchain games interoperable on metaverse. Unlike before, you can use in-game NFTs outside of the gaming module and on other gaming platforms as well.
Thus, NFTs promote a fair and transparent economy by giving players, creators and businesses a chance to enter the metaverse economy. Of all tech resources, NFTs are the most accessible ones to use in a virtual economy.
Establishing Identity & Social Community
NFTs play an integral part in establishing identity and enhancing user experience in the metaverse.
Users owning the similar type of NFTs can form a community. They can then socialize or work collectively to create content. This kind of NFT community allows like-minded people to interact with one another and share experiences.
NFTs also serve as entry passes to exclusive real-world and metaverse communities. They can give you access to VIP clubs, events or groups both in the real world as well as on metaverse platforms. Thus NFTs can help you build community virtually and in real life.
On metaverse, your online avatar is your identity. Your NFT avatar represents your real or virtual self as you wish. You can also use these NFT avatars to hop on to different locations in the metaverse. These NFT avatars give you the freedom to create and own your virtual identities.
Defining Ownership Rights In Metaverse
Before NFTs, there was no way to claim your rights on any digital assets. Now with NFTs on metaverse, you get complete ownership of all the assets you own on the metaverse platform.
With the help of NFTs, you can buy merchandise products, avatars, real estate or properties on metaverse. The best thing is that these are your real-time investments. As you have 100% authority on your assets, you can resell them outside of the platform as you wish.
Decentraland is an excellent example of one such metaverse platform. Here, you can buy LAND NFTs and build properties on your land, rent it out or resell them. As the owner, you can do whatever you wish with your virtual land.
A Final Thought
Metaverse is a gigantic concept in itself. NFTs in this vast concept are an integral part that will help to enhance the efficiency, functioning, economy and interoperability of the metaverse platforms.
From defining the virtual identity to building community, offering ownership rights and driving a fair economy, NFT is key to building an advanced metaverse in future.
You can explore the limitless opportunities of metaverse and NFTs by launching your own NFT marketplace. NFTICALLY is the one-stop destination that equips you with cutting-edge technologies to open your NFT store and sell NFTs under your domain name.