What is happening in the digital and Defi world can no longer be ignored. It must be embraced and understood if a company want to keep up with the Jones’ in their field.
We are on the foothill of a new era. One that meshes our activities and contact into a singular stream of virtual reality. In 2008, the possibility of holding digital currency came into existence with Bitcoin. Once a concept that was held by an extremely niche community— is now a global norm.
The most forward-thinking companies must be quick to adapt. First was the extinction of brick and mortar stores to e-commerce. Now, companies are acknowledging the utility of owning digital assets. NFTs (non-fungible tokens) have become a part of the most disruptive branding strategies. These include shoe giant Nike, patenting their own collection of NFT sneakers, and Top Shots by the NBA. Entertainment, fashion, even real estate can leverage opportunities in the NFT realm to create value.
What does this mean for the general population?
As our favorite companies begin to tap into the Metaverse— we are likely to go along with it as long as it is convenient and trustworthy.
Before crypto currencies became mainstream, many were skeptical of it. The volatility of crypto markets are bound to make the average risk-averse investor, nervous. However, it’s tendency to rebound, scarcity and astronomical valuation has made it in general, a safe asset to hold for the long run. These days there seems to be an endless stream of new marketplaces that make buying and selling cryptocurrency easy and cheap at the drop of a pin.
Into the Metaverse
Social media pioneer Facebook, rebranded to Meta, symbolizes the beckoning of a new era. According to Zuckerberg, it will “feel like a hybrid of today’s online social experiences… lets you share immersive experiences with people when you can’t be together”.
For the Gen Z population that relies on Facebook to stay connected with friends, to buy and sell things, to share photos, advertise business— the transition will inevitably redirect people to abide to this change of pace. Though little is known about what the ‘Metaverse’ will exactly entail, it is indirectly compatible with the concepts of NFTs.
NFTs are most likely to become, in a literal sense, tokens, for our participation in the Metaverse.
Representing Ourselves Online
Social media necessitated image and online representation. Our digital identities became more important than our real ones.
NFTs embody unique traits—facial expressions, movements, costumes that individuals can identify with. Hence, displaying it as their profile picture is a way to show their support for the concept, kind of like displaying a unique painting in your house.
People reflect their identities, status, and social affiliations, through their appearance.
Instead of wearing physical luxury items— ie. your favorite pair of Jordans, you can own it as a digital asset. Though owning some of these ‘assets’ could easily double or triple your spending— due to its scarcity, it is meant to appreciate in value.
NFTs facilitate a new way to represent personalities, images, and brands. The more people and brands associate themselves with NFTs through social media, the more normalized it will become.
Social Interaction and Leisure Activities
NFTs are no longer just about possessing unique art or showing off— companies are tapping into this need to interact with dear ones, and do things we normally can perform physically. Virtual reality enables those that don’t have the financial means to do certain activities, such as traveling, to engage in activities they might not have been able to do otherwise.
Virtual reality games used to only exist in small to mid-sized arenas. Then came VR headsets which allowed people to play in the comfort of their homes. Now the technology is incorporating NFTs into everyday applications.
My first interaction with virtual meeting spaces was through one of my summer courses at University. We used the virtual meeting space, Gather, to network. Everyone had their own avatars, and there’s different rooms and tables you could go to that once you sat down, you could interact with people through video.
Virtual meeting spaces are bound to become more normalized. People need a way to connect with others without taking a flight— this remains an important way of sustaining work and business relationships.
The sports industry has historically been a source of national pride and collectivism. NFTs allow fans to stay engaged with their favorite sports, while the pandemic puts live events on hold. Tokenized passes have been created to give exclusive access to special events, tournaments, and meet and greets with athletes.
Deloitte Insights predicted by the end of 2022, 4-5 million sports fans will have been purchased or been gifted as a NFT collectible. They also foresee fans spending “tens and billions of dollars on virtual currencies” that can be used to purchase digital assets and game-related artifacts.
Different income streams through NFTs
NFTs create unrestrained paths to make money, even for the ordinary person.
Play to Earn business models allow players to earn NFTs through the demonstration of aptitude or completing tasks within the game. This is incentivizing for young people, to be able to make up to thousands a week from participating in this type of virtual reality.
Vietnam-based game company Axis Infinity, pioneers this type of model. Players adopt virtual pets, similar to Pokemon, to compete with others. In order to breed new Axies, players must spend the game’s Ether-based currency. They earn currency through winning tournaments and trade this in for real income. Sky Mavis, the company that owns Axis, reported that 25% of their players did not have access to banks and that their Axie wallets were the first type of digital storage they’ve had. Some are using their earnings from the game to pay for their rent.
The Metaverse is upon us. As VC investors flock towards upcoming NFT projects, more of them will infiltrate into our lives. NFTs provide a lucrative, trendy, and convenient way for us to be together (when we’re not), brand ourselves, and even make money. It’s only a matter of time before our physical realities become overlapped with a singular, connected Metaverse.