Crypto experts decode the next big phenomena in the digital space: NFTs and the Metaverse
“The Metaverse is your house and everything in your house are the NFTs. It's a different virtual destination, where people will be able to do different things in 3D, and eventually in VR,” quotes Jawad Ashraf, Co-founder and CTO, Terra Virtua.
Jawad was speaking at a Roundtable on Day 2 of YourStory’s The Metaverse Summit, where he was joined by four other leaders to discuss the vast opportunities in the next big phenomena emerging in the digital space - NFTs and the Metaverse.
"What we are doing right now is we're expanding what we've already built. We're building multiple worlds and experiences, some of which are built around entire brands. So it's like a brand world metaverse,” adds Jawad.
Metaverse is the next evolution of the internet, given how everyone consumes content online and is a very logical and organic match with NFTs, says Carolin Wend, COO, Mintbase. Mintbase is integrated with the virtual reality platform 3XR, which enables you to view every NFT you mint on Mintbase, in a virtual world.
Opportunities in the Metaverse
Jonathan Caras, Head of Communications, Levana, opines that there is a huge opportunity for financial services and tools within the Metaverse. He doesn’t see the Metaverse as simply a virtual reality but rather “a digital persona that is consistent amongst multiple digital experiences”.
He suggests that it is as if one can take a character or an account in a video game, connect it to and use it in other environments, like social media and banking, to enable more earning opportunities within these virtual environments..
Jonathan insists that we are already seeing a new generation where these two concepts (reality and the virtual world) are closely intertwined. He says, “At Levana, we're building a Metaverse- and gamification-focused general purpose financial service that uses synthetic assets, derivative assets, and then perpetuals, to be able to create markets for anything.”
“I think that the explosion of NFTs and the adoption in the Metaverse is simply inevitable at this point,” he adds.
Wall.app, said Co-founder and CEO Anuj Kodam, is working on building mechanisms where one can follow other people's wallets and see what social and financial actions are happening on the chain, as opposed to simply looking up their social media. “A new kind of social behaviour is going to happen…with the key idea that your wallets and NFTs that you hold are your social identity,” he says.
Virtual real estate?
Land pricing in the Metaverse, Jawad says, follows the same model as in the real world, thus creating limitations and scarcity. “The challenge is to find a way to give accessibility to everyone to own a place in the Metaverse because those (land space) limitations aren’t there,.” he shares.
“As the Metaverse evolves, innovation will come and people are going to find fairer ways to have ownership,” he adds.
Prakhar Sharma, Co-founder, MetaSky agrees that the Metaverse real estate boom is bound to happen. He talks about MetaSky’s Red Pilling Event, where they make sure to look at Web3 from “a very new lens” and not take the learnings from Web2 or the real world to try to build something similar over there. This, he says, is because Web3 moves very differently. “If we are hooking our imagination to something that we're seeing in the real world, or maybe in the web world, we might miss out on some of the very interesting innovations that happen in this particular space,” he says.
Blockchain and fintech: the new social network?
Carolin sees the Metaverse coming to mass adoption where innovation in fintech bridges the virtual and physical worlds together. She also sees the function of splitting the revenue of one NFT as becoming a major innovation in fintech.
Citing an example as an event organiser, she says, "I can sell tickets and split the revenues among different people involved in the event, who are further incentivised to sell more tickets. So it's not only me, the central institution, pushing my event, but I have different people because they earn as more tickets get sold. This concept creates completely new paradigms that we have not explored yet.”
“The inherent financialisation aspect of tokens and NFTs give access to normal users, who would have never been able to buy into an early Apple or Disney,” says Anuj, adding how there are already different subscription models happening through NFTs and event ticketing, where you can split them without the trust mechanism. Web2 managed to solve the middleman problem but smart contracts and NFTs as an asset class automate these processes now.
This also helps those who are just discovering these spaces. People who have already been in the ecosystem need not explain what they do as their wallet identities speak for themselves. This is because “the way they do these activities themselves are conversations," Anuj says.
How brands are interacting with this space
Jonathan believes that the collectible industry, which is a multi-billion dollar double-digit industry, is plagued by two significant problems - fraud from two perspectives, one, in the form of counterfeits and the second, of being able to ascertain scarcity. In his opinion, “NFTs have become a solution to these problems because now it's trivial to determine whether the item that you're purchasing was created by the content creator that the seller of the item claims it's from.”
This, he says, completely changes the significant amount of overhead and reduces bad actors within the collectible space. “Today, the only technology that enables you to sell custody or own a digital asset is blockchain technology,” he says.
As we move to a digital space, Jonathan believes, it becomes more important for companies that have an emotional connection with their communities to provide them with collectibles within that digital space.
Opportunities for aspiring entrepreneurs
Jawad notes that there are more growth and revenue opportunities around the Play-to-Earn (P2E) arena, along with Learn-to-Earn and Own-to-Earn arenas. New companies are emerging in these spaces to monetise the opportunities presented there.
Despite the thousands of generative pieces that promise Metaverses and P2E games themselves, Jawad thinks a lot of them aren't going to deliver. He says, “We're going to see the market and the earning potential shift a little bit over the coming year.” The increase in the market will then unlock the next level of earnings you can do in the Metaverse, he adds.
The road ahead
Carolin believes the physical and the virtual worlds will begin to merge at a much faster rate. She highlights an example of a Mintbase model that worked during the Lisbon Blockchain Week, where people could redeem their NFTs for actual goods in the real world after experiencing them in the Metaverse.
While utility NFTs will become a trend, Prakhar says, art NFTs will struggle to survive in this environment. He expects to see greater development and adoption of P2E games, especially in developing countries, and that a type of market expansion beyond physical constraints will occur with virtual malls.
He also believes that some of the brands will get into community building, "which is centred around the incentive mechanics for the people interacting with that particular brand”.