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Increased adoption of Metaverse NFTs to catalyze the next cycle of NFT growth

The Metaverse’s virtual events, land, and financial services will unleash a trillion-dollar deal, igniting the next NFT investing frenzy.

Metaverses and high-profile nonfungible tokens (NFTs) are the primary drivers of the NFT market’s explosive expansion. In the last year, projects such as the Bored Apes, Crypto Punks, Azuki, Clone X, and Doodles collections have increasingly piqued collectors’ curiosity. 

In the last year, projects such as the Bored Apes, Crypto Punks, Azuki, Clone X, and Doodles collections have increasingly piqued collectors’ curiosity.  As a result of these NFT projects, the NFT market has grown by more than 20,000 percent and reached a sales volume of nearly $17 billion. (R 264bn)

For an industry that previously garnered only a fragment of interest inside the crypto/blockchain world, it’s evident that NFTs are here to stay, despite prior criticisms about their transient nature. However, in light of the recent slump in the NFT markets, investors and collectors alike are looking for new horizons where they can profit from the inventive application of NFT technology in a variety of use cases.

On the other hand, entrepreneurs have devised novel applications for NFTs in a variety of industries. These new applications have expanded the usability of NFTs, and it is believed they will be the catalyst for the next phase of NFT adoption.

The market for NFTs

Metaverse NFTs are one sub-niche receiving significant interest in the NFT world. According to a report issued by NonFungible.com in collaboration with L’Atelier BNP Paribas, Metaverse NFTs account for around 3% of the global NFT market value, or $513 million( R 7.97bn). As more businesses establish their brands in the Metaverse, the value of Metaverse NFTs will skyrocket. 

Virtual real estate: Margaret Mitchell famously stated, “Land is the only thing that matters in this world, for it is the only thing that endures, the only thing that is worth working for, fighting for, and dying for.” Digital land, facilitated by the blockchain, can elicit the same feeling and utility as physical land.

For instance, PARSIQ, a blockchain startup, has developed a mechanism through which Metaverse landowners can earn rental money from their digital assets. By emulating the behaviour of actual land, the protocol ensures that both the landowner and the renter’s obligations are negotiated, managed, and enforced through a series of smart contracts.

Virtual events: Snoop Dogg, the legendary West Coast rapper, revealed a few months ago that he would hold an exclusive concert in The Sandbox’s metaverse. The event made use of NFTs to provide concertgoers with premium experiences both within and outside of the metaverse.

Following that, some brands began exploring ways to use modern technologies to redefine the boundaries of virtual worlds across multiple platforms.

Companies feel that by incorporating music, art, and fashion into corporate or conference settings, they can provide their followers with unique experiences that will keep them in their ecosystem longer and increase their customer lifetime value.

Financial services: Trading Economics reports that the annual inflation rate in the United States increased to 8.5 percent in March 2022, the highest rate since 1981. With investors under pressure from all directions, there is a growing appetite for assets that offer returns above the rate of inflation. Protocols that enable decentralized finance driven by NFTs within the Metaverse provide investors with an opportunity to earn passive returns and other incentives.

Staking and yield farming are both established means of passive income generation in the DeFi sector, but are relatively new in the metaverse. However, as they achieve general acceptance, they present enormous chances for early backers of metaverse projects to earn life-changing sums of money.

While the market is lulling, this is an interesting opportunity to investigate these emerging use cases. When market enthusiasm returns, the early adopter will have extracted the alpha and will most likely move on to the next uncharted territory.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

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