Many people would perceive NFTs as mere images of digital artworks or collectibles which they can sell for massive prices. However, the frenzy surrounding digital art in present times has pointed out many new possibilities with NFTs. For example, the NFT metaverse connection undoubtedly presents a promising use case for NFTs. The road for the future of NFTs brings many new opportunities for investors, enterprises, and hobbyists, which can shape up NFT usage and adoption in the long term.
One of the most notable use cases of NFTs, which has been gaining attention in recent times, would refer to accessing the metaverse. Will NFTs help in accessing the metaverse? Do they have any value for defining how the metaverse would look in the future? The metaverse NFT interplay is undoubtedly a prominent highlight for anyone following the blockchain space. The following discussion will help you find out how NFTs would play a crucial role in the metaverse and especially in metaverse gaming.
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Blockchain, NFTs and the Metaverse
Blockchain is one of the core technological interventions in recent times which have become popular in a short duration. It played a significant role in resolving the problem of double-spend by serving as the foundation for the Bitcoin blockchain. Subsequently, blockchain also served as the basis for creating NFTs or non-fungible tokens, which introduced the traits of interoperability and scarcity. However, the rising volume of discussions around NFT metaverse projects and growing interest in NFTs and metaverse calls for investigation into the possible role of NFTs and blockchain in the metaverse.
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What are NFTs and the Metaverse?
If you want to understand the role of NFTs in the emerging metaverse, then you need to find the right answer to “What is NFT and metaverse?” before you move any further. NFTs or non-fungible tokens are a new class of digital assets, which are unique, indivisible, and immutable. They help in representing the ownership of digital and physical assets on the blockchain. Starting from digital artwork to the gaming industry, NFTs are making a huge impact everywhere.
In order to perceive the role of NFT in metaverse, you should know what the metaverse is. You can think of the metaverse as a digital environment running on the blockchain, where technologies such as VR and AR could serve as the visual component providers. The decentralized nature of the blockchain offers the prospects for unlimited business opportunities and social interaction. Metaverse offers extremely versatile, scalable, and interoperable digital environments. Most important of all, the metaverse blends innovative technologies with models of interaction between participants from individual and enterprise perspectives.
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Is NFT Part of Metaverse?
Almost all discussions around the metaverse are pointing towards the possibilities of blending the metaverse and NFTs together. At the same time, many people also assume that NFTs are just another component in the broader metaverse. As a matter of fact, you can find that NFTs and metaverse are considered almost synonymous with each other.
The primary reason for such assumptions points towards sudden bursts of growth for NFTs in the field of blockchain gaming. It is reasonable to infer that the metaverse will shape up only through virtual worlds. Interoperable metaverse games can drive the development of the metaverse by serving the virtual worlds.
In addition, the association of real-life identities with digital avatars presents opportunities for defining access to the metaverse with NFTs. The first example of the metaverse NFT token was evident in 2019 with the instance of NFT-controlled access. The first NFT.NYC conference in 2019 used an NFT-based ticket for allowing entry to the event. Even if no one could call the conference the “metaverse,” it definitely set a favorable precedent for the NFT metaverse interplay.
With a promising benchmark, many new projects have emerged in recent times for capitalizing on the intersection between NFTs and the metaverse. The projects are basically focusing on introducing massive transformations in the approaches for online interaction. The example of Decentraland shows how users can gain ownership of real estate in the metaverse with LAND tokens.
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Will NFTs Build the Metaverse?
The metaverse is a massive concept, and NFTs can serve as a key concept in the broad ecosystem. NFT metaverse projects would drive the possibilities of using NFTs as deed to virtual property. NFTs could help in gaining exclusive access to enter the location in metaverse alongside allowing access to others.
Interestingly, the smart contract functionalities in the NFT could also help in selling real estate on the metaverse. The use cases of NFT in metaverse would focus primarily on NFT-controlled access in the initial stages of metaverse development. Just like the first-ever real-world example of implementing NFTs in the metaverse, NFT-controlled access could help in ensuring VIP access to real-life events and the events in metaverse.
NFTs could also serve a useful role in airdropping branded merchandise or special access privileges to followers. Apart from driving the efficiency of fan engagement, NFTs could introduce interoperability outside the metaverse with infrastructure supporting the features of location-based engagement and augmented reality. So, it is quite clear that the metaverse and NFTs are made for each other.
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Effect of NFTs on Metaverse
In your quest for the answers to “Is NFT part of metaverse?” you might have found the different ways in which NFTs can help in building the metaverse. However, it is important to identify the significance of NFTs in changing the fundamental design of the metaverse. You must have noted that NFTs could introduce disruptions in the conventional social network precedents of user interaction, transaction, and socialization in the metaverse. So, how would these effects translate broadly onto the metaverse? Here are some of the highlights of how the metaverse NFT interplay would play out in the future.
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The Road to a Fair and Transparent Economy
As of now, individual users and enterprises could easily represent their real-world assets and solutions in a digital decentralized environment. The metaverse could open up to more real-world assets through the use of innovative gaming models in synchronization with interoperable blockchain games.
The role of NFT in metaverse would become more prominent with new models such as the play-to-earn gaming model. It not only offers the opportunity for using NFTs to drive engagement in the metaverse but also offers to empower chances to players. On top of it, play-to-earn games offer a fair gameplay experience by allowing complete ownership and control of assets to the players.
One could not help but notice the significance of play-to-earn gaming guilds in fuelling the growth of the NFT metaverse interplay. The guilds serve as intermediaries which purchase in-game NFT resources such as assets and lands. Then, they lend the assets and land to players who can use them in different virtual worlds for earning yields. In return, the play-to-earn guilds would only take a trivial share of the earnings. As a result, you can find the perfect basis for a fair and open economy in the metaverse by leveraging NFTs.
The guilds could lower the barrier to entry for play-to-earn games by offering the head start to players without upfront capital. Therefore, you can notice the possibility for a fair economy in the metaverse, which allows everyone to participate. Users could also trade their NFT assets like in-game collectibles and digital real estate on NFT marketplaces without any barriers.
The role of NFT in metaverse is clearly evident in the fact that blockchain offers transparency and immutability. The fair and open economy in the metaverse depends a lot on these properties. Now, the fundamental law of supply and demand would drive the scarcity of NFT and their on-chain value. As a result, you could not find any possibilities for artificial value inflation. So, you can see how the metaverse and NFTs work together to create a transparent and fair economy.
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New Generation of Community, Social and Identity Experiences
The effect of NFT metaverse projects would also play a significant role in transforming the identity, social, and community experiences of users in the metaverse. Users could showcase their support for a specific project or express their opinions regarding the virtual and real worlds by holding NFT assets. As a result, like-minded NFT owners could form communities for sharing experiences and collaborating on content creation.
The trending example of NFT avatars shows how the metaverse NFT connection is transforming the world itself. NFT avatars are representatives of a player’s actual self and the one they imagine. Players could use their NFT avatars in the form of access tokens for entering and switching between different locations in the metaverse. You can perceive NFTs as the extension of real-life identities of users with complete ownership, control, and flexibility for building virtual identities.
With NFT avatars, users could gain virtual membership to a wide range of experiences in the real world and metaverse. Therefore, the combination of metaverse and NFTs could improve the social and community experiences for users. The applications of NFT avatars in metaverse for startup launches and content creation also showcase their potential.
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New Trends for Real Estate
Virtual worlds mean a lot of virtual space and real estate. You could use NFTs for gaining complete ownership of virtual spaces in the metaverse. With the help of the blockchain, users could easily prove ownership of the asset alongside developing virtual real estate.
One of the notable use cases of such NFT metaverse projects includes selling virtual land for profit. You can also rent land for passive income alongside developing various structures such as online shops or hosting events.
Decentraland is the most popular example for showcasing the digital real estate scenario in the metaverse. Recently, Decentraland conducted a virtual fashion exhibition, and that too in collaboration with Adidas. The exhibition showcased the auction of fashion designs as NFT. So, there is no hesitation in thinking about possibilities of auctions for virtual spaces in the metaverse in future. The popularity of virtual real estate has also attracted interest from music artists for exercising ownership over their work. Digital real estate would broadly refer to ownership of digital assets in the future, and every NFT holder would have a space in the metaverse.
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Final Words
The numerous potential associated with the NFT metaverse combination would transform the future. You can see how NFTs bring ownership and uniqueness while the metaverse gives a digital world where everything is possible. The combination of the digital world and a way to represent real and digital assets in the world would change the economy and social experiences. While many assume that NFTs are a part of the metaverse, and some think that NFTs are the building blocks of metaverse, it is clearly evident that NFTs and metaverse would open up a broad range of opportunities. Learn more about the metaverse and explore the possible ways for using NFTs in it.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!
