Facebook’s recent “Meta” rebrand has ratcheted up interest in the conceptual metaverse, virtual worlds full of avatars that represent people, items, and places. While metaverses are nothing new, their interaction with the real world has been supercharged by the advent of blockchain technology and cryptocurrencies, which have made the trading of digital assets highly liquid in both realms.
A number of cryptocurrencies focused on the metaverse and NFTs have surged in the wake of Facebook’s announcement, reflecting a belief that the company’s major shift will be one that ultimately points toward a new wave of adoption for digital assets.
Related ETF & Assets: Amplify Transformational Data Sharing ETF (BLOK), Meta Platforms, Inc. (FB), Ethereum (ETH-USD), WAX (WAXP-USD), Decentraland (MANA-USD)
A Long Road to the Metaverse
In late October, social media giant Facebook announced it would be rebranding as “Meta Platforms”, a play on the increasingly popular “metaverse” concept – a digital world where items, locations, people, and more are represented by avatars or some other virtual marker.
The concept of a metaverse is nothing new. Not only was the term coined all the way back in 1992, but many popular online communities that have risen to prominence over the last couple of decades could easily fit the bill of a proto-metaverse. As arstechnica highlights, a game like Habbo Hotel – released all the way back in 2000 – features unique products and customization within your online “homeroom” and allows you to explore public rooms to interact with other players’ virtual avatars. Massively multiplayer online role-playing games (MMORPGs) like Runescape, released around the same time, may even be similar to what we could call a “metaverse”.
Facebook’s tilt toward “Meta”, and the metaverse as a whole, was a long time coming. The Chan Zuckerberg Initiative (CZI), a foundation established by Meta CEO Mark Zuckerberg and his wife, Priscilla Chan, acquired the company that owned the “Meta” trademark back in 2017. Additionally, Facebook had spent years investing heavily in augmented reality and virtual reality technologies (AR/VR). According to the New York Times, Meta has discussed opening a number of retail stores across the world that would be used to introduce people to AR and VR devices made by the company’s Reality Labs division. The advent of these reality-bending technologies are key to bringing a part of the metaverse into our own lives, mixing the virtual with the physical.
Digital Assets Driving Massive Metaverse Adoption
What was largely unforeseen, however, was that the rise of cryptocurrencies would be the catalyst to vault the idea of a metaverse into the mainstream. Crypto assets’ ability to seamlessly plug into digital worlds, while also being highly liquid and redeemable in the real world, has helped to further blur the lines between each of those realms.
Non-Fungible Tokens (NFTs) have played the largest role in revolutionizing digital asset ownership. As MRP wrote in our roadmap for understanding NFTs, an NFT is a digital token representing ownership of a digital asset on the blockchain – similar to a certificate of authenticity for a piece of artwork. An NFT cannot be duplicated or copied (hence “non-fungible”) and will track the entire ownership history/selling price of the underlying files(s) autonomously. An NFT can be anything from digital art to digital real estate.
While most NFTs are currently being “minted” (the process by which an asset is tokenized on the blockchain) on the Ethereum network, other popular blockchains like Cardano and Solana also support NFT and smart contract functionality.
(Definitions for all acronyms and terms related to cryptocurrencies can be found on Coinmarketcap’s Alexandria glossary)
2021 has been a boom year for NFTs. Per DappRadar, the NFT industry generated $10.67 billion in trading volumes during Q3 of this year, marking a 704% increase from Q2. Just last month, leading NFT marketplace Opensea.io surpassed $10 billion in all-time NFT sales. Per Bitcoin Magazine, Opensea closed a $100 million funding round in July.
Top crypto exchanges including Coinbase and FTX are now rolling out their own NFT marketplaces. It was reported earlier this year that Facebook was looking into NFT support as well. As CoinDesk notes, the company’s Novi crypto wallet could form the backbone of Meta’s strategy toward the tokens. The Meta rebrand was a huge boon for a variety of digital assets that are considered building blocks of the metaverse – particularly those explicitly focused on NFTs.
One of the most popular digital worlds in the crypto space runs on Decentraland, perhaps the preeminent example of a modern day metaverse. Within Decentraland’s metaverse, players utilize…
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