Why NFTs are the key to the upcoming Metaverse

On October 28, Mark Zuckerberg announced that Facebook's parent company would be renamed Meta, to represent the company's focus toward the Metaverse.

Aiming to be one of the pioneers of this new virtual frontier, Facebook is influencing a wide range of companies to run head-on into this gold-rush, and to start shaping the Metaverse by building worlds, games, and the infrastructure that supports them.

Participants in the Metaverse will be able to develop highly valued goods in that Virtual world, define the experiences that occur, and help mold the Metaverse's aesthetic feel.

And NFTs will undoubtedly be a crucial component of realizing that interactive future.

The Key to The Creation Of The Metaverse – NFTs

Non-fungible tokens (NFTs) are similar to digital property records in that they allow you to transfer ownership of everything you can think of, and can be applied to any kind of asset.

They're being utilized to give fractional ownership of tangible things like real estate, art, and diamonds, as well as wholly virtual assets like virtual real estate and even collectible digital pets. The nature of the virtual world removes restrictions on the types of assets that can be created and possessed, and NFTs give a transparent and verifiable mechanism for proving ownership.

Another feature of NFTs is smart contracts, which allow issuers to ensure that their rights are protected throughout the life of the NFT, even in secondary markets. For example, under an NFT's smart contract, an issuer may seek royalties on future transfers. As a result, NFTs and the creation of the Metaverse are inextricably intertwined.

How are the Metaverse and NFTs Connected?

Let's take a closer look at the relationship between NFTs and the creation of the Metaverse.

Firstly, a Metaverse is a virtual world where humans interact (socially and economically) through avatars. Meanwhile, the NFT Metaverse enables anybody to build, buy, and view virtual products & NFTs in the Metaverse, aiming to unite diverse online worlds into a single cohesive entity.

To get a sense of the possible magnitude of Virtual Products & NFTs in the Metaverse, consider a virtual environment where any asset may be purchased, sold, or exchanged. And because of that, the Metaverse would be free of real-world constraints such as natural resource restrictions, supply chain risk, and physics. Given the immense potential, advocates are dubbing the NFT Metaverse the next evolution of The Internet.

Here's an example to bring home the potential of the Metaverse. A user may soon be able to explore a virtual shopping mall, order food in the food court via Uber Eats, purchase virtual products & NFTs for their personal avatar, and finally attend a live performance at the Spotify Performing Arts Center.

When the user wants to go for a run in the real world, they can also listen to the concert through AirPods on Spotify, while racing against their pals. Everything is seamless: data and purchases are shared between the physical and digital worlds.

NFT Metaverse - The current scenario

Many examples of NFT use in virtual environments could be considered progenitors of the NFT Metaverse.

Decentraland, The Sandbox, and Somnium Space are a few of the notable crypto metaverse projects that are now using NFTs to power their worlds where users can purchase and sell land or design homes, and then put them on display for the world to see. The blockchain that underpins the NFTs acts as a virtual land registry in each of these virtual worlds, while the NFTs themselves act as property deeds.

But real estate ownership and the capacity to exchange commodities and services are only two components of Metaverse's definition. The social connection aspect is perhaps more critical in making virtual space a viable alternative to the actual world. Synchronous events, corporate branding, and self-sustaining creator economies are already being built in proto-Metaverses.

The Fortnite realm is one of the best examples of a modern-day primitive Metaverse. The video game, which initially gained momentum for its take on the popular battle royale concept, has now developed to give fans live concerts and exclusive first access to film trailers and albums, all within the game world. With the release of Fortnite Creative, gamers may now create and market their own content, marking a significant step forward in developing the crypto metaverse economy and social infrastructure. Finally, Fortnite's phenomenal growth demonstrates that the notion of virtual second life is, at least to some extent, already a reality for many.

The Future of the Metaverse

Several businesses are also venturing into the cutting-edge cryptoverse. The KuCoin Exchange has unveiled the first-ever Metaverse Trading Board, allowing Metaverse projects to expose their tokens to the world with real credibility.

Axie Infinity (AXS), Enjin (ENJ), Smooth Love Potion (SLP), and SENSO (SENSO) are among the crypto metaverse projects included in the new area for open trade. Its founders believe that such a specialized structure would support younger and established Metaverse projects. As a result, it will make them available to possible investors and a wider audience of users.

More technological progress is however required to unlock the full potential of the Metaverse.

To begin with, a more robust infrastructure must be designed to enable synchronous and at-scale virtual event experiences. Developers must also define and subscribe to a comprehensive set of standards and protocols to facilitate seamless interoperability across different Metaverse settings. The whole user experience must be improved to at least match the slickness that consumers have grown to expect from modern Internet applications.

Finally, it’s also worth asking whether it’s wise to have centralized, for-profit companies like Facebook, with a long history of harvesting and selling user data, at the heart of our future media worlds, even if they have rebranded to operate under a different name.