Home News NFTs find true utility with the advent of the Metaverse in 2021

NFTs find true utility with the advent of the Metaverse in 2021

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NFTs have risen to new heights in terms of popularity and public acceptance. Nonfungible tokens (NFTs), which were formerly regarded to be a fad, are rapidly spreading across the cryptoverse.

According to DappRadar, the NFT market had its biggest year ever, earning moreover $23 billion, with the floor market capitalization of the top 100 NFT collections reaching $16.7 billion as of Dec. 17, even before the year ended.

Facebook’s announcement of being rebranded to Meta on Oct. 28 in an effort to broaden its reach beyond social media and into the Metaverse has been the most significant development for NFTs and the metaverse area. Indeed, it was discovered in the last week of October that over $106 million in Metaverse land had been sold in just seven days.

The NFT collectibles craze originated in the cryptoverse in 2017 with the release of the CryptoKitties game and the ensuing desire for these digital cats. In November 2017, the blockchain game saw a peak of 140,000 daily users and 180,000 daily transactions, however, this traction was soon lost over the next few months. Since then, prominent collections including CryptoPunks, Bored Apes Yacht Club, and NBA Top Shots have emerged in the collectibles domain.

The digitalization and tokenization of artworks by well-known artists like Beeple through auction sales organised by traditional art galleries like Christie’s and Sotheby’s sparked initial interest in NFTs in the public.

Since then, NFTs have extended to encompass art, music, gaming, sports, and Tweets — pretty much any digital or real-world item that can be tokenized while retaining its value and offering unique ownership.

The game-changer

GameFi protocols are the most significant turning point for NFTs who followed the Metaverse storey. It is a hybrid ecosystem that combines gaming and decentralised finance (DeFi). GameFi has resurrected interest in blockchain gaming, according to Huobi Research, the bitcoin exchange’s research arm.

Axie Infinity, a game environment where players may gather Axies as pets and battle, breed, grow, and build kingdoms for them, was the leading protocol in this respect in 2021. AXS and SLP, the network’s native tokens, power the game ecosystem.

Sky Mavis, a Vietnamese game developer, designed the Ethereum-based game, which was released in March 2018. The Axie Infinity collection has quickly climbed to become the most traded NFT collection in the brief history of NFTs. Thanks to the buzz surrounding the game this year. The collection has sold approximately $4 billion worldwide. With its current in-game trading volume, Axie Infinity has far outpaced other blockchain games.

The game surpassed Tencent’s previous record of $9.72 million in a single day

The game’s daily active players increased by 125 times in less than nine months. From 20,000 in March to 2.5 million in December. A stunning achievement for a game that only gained popularity this year. In June, the game surpassed Tencent’s previous record of $9.72 million in a single day. The game accounted for $1.08 billion in trading volume in the third quarter of 2021. Or 19.5% of overall NFT trading volume.

Despite the fact that this game is built on Ethereum, blockchain-based games have proliferated throughout blockchain networks like Solana and the Binance Smart Chain. Splinterlands on Hive and Wax, Alien Worlds on Wax, Upland on EOS, and MOBOX based on the Binance Smart Chain are just a few of the games that have garnered traction across blockchain networks.

In 2021, the amount of money invested in the blockchain gaming domain will have topped $1 billion. Driven by the $930 million raised by Forte Labs, a gaming business.

Pushback from traditional gaming and regulations

GameFi has disrupted gaming with the advent of blockchain technology. However, the traditional gaming industry has not been enthusiastic about this innovation. Earlier this year, Steam/Valve issued a blanket ban on all blockchain-based games on its platform. In response, more than 26 businesses and advocacy organisations have petitioned the corporation to lift the prohibition.

Furthermore, the South Korean government has barred the introduction of new play-to-earn (P2E) games. And has requested that current blockchain games using a P2E model be withdrawn from the Apple Store and Google Play Store. Epic Games, the firm behind Fortnite, has stated that it is open to blockchain-based games. That support cryptocurrencies and other blockchain-based assets.

Even Elon Musk, the CEO of SpaceX and Tesla, indicated in a recent interview that his company’s technology, Neuralink, is better than the Metaverse in the long run. Because he doesn’t envision “someone strapping a friggin’ screen to their face all day”. “In the long run, a sophisticated Neuralink may fully immerse you in virtual reality,” Musk concluded. I don’t think we’re on the verge of slipping into the metaverse; this just sounds like a buzzword”.

Despite opposition from the traditional gaming business and certain regulators, GameFi has expanded at a breakneck speed. ProShares, the company that launched the first Bitcoin-based ETF in the US, has announced plans to establish a Metaverse-focused ETF. That would include companies like Apple, Meta, and Nvidia. ProShares Metaverse Theme ETF, which will track the performance of the Solactive Metaverse Theme Index, has been registered with the United States Securities and Exchange Commission (SEC) (SOMETAV).

Businesses can use blockchain technology to develop Metaverse business models

PricewaterhouseCoopers (PWC) Hong Kong is one of the Big4 consulting firms that has dabbled in the Metaverse. A land parcel in the metaverse game Sandbox purchased by the firm. Following an agreement with the Swiss blockchain firm Velas Network, even Ferrari, the Italian premium sports vehicle maker, hinted about NFTs.

As a result, businesses can use blockchain technology to develop Metaverse business models. That are efficient and compatible with the actual world. If 2021 is the year of DeFi and NFTs. Then 2022 will almost certainly be the year of GameFi and the Metaverse.

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