Investors can diversify the pot into Metaverse tokens and their respective Layer 1 tokens
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Cryptocurrency has become a widely debated topic around the world, thanks to the meteoric rise of Bitcoin, Ethereum, Dogecoin, and others. But the crypto world has a lot more to offer and new developments are growing at a rapid rate. And, Metaverse is the new paradigm that has caught everyone’s attention. In this article, we’ll understand the basic definition of metaverse and why multinational corporations pay special attention to it.
Definition of metaverse
Our current online social experience is limited to the screen of the mobile or laptop that the reader is glued to right now. For example, you can’t see the other person you’re texting on WhatsApp. What Metaverse manages to do is bring the other person you’re texting or having a zoom meeting with, virtually next to you. It helps you do things together that you couldn’t in the physical world. To sum up, Metaverse is an online world where people interact with each other using digital avatars.
The metaverse hype
If there’s one takeaway from Nokia’s failure, it’s its adaptability. They’ve stuck with their old patterns, focusing on hardware rather than software, and watch how that turned out for them. Modern businesses seemed to have taken notice and it shows in the recent interest in the fast-paced cryptocurrency world.
As social experiences (time spent online) slowly become online due to the onset of the pandemic, people are looking for newer and exciting ways to spend time with others who may not be physically present. And businesses are starting to notice the potential for the metaverse to become something intangible in people’s lives.
Businesses are going virtual
This month, two big sportswear brands took the lead on the Metaverse. Nike has announced the acquisition of digital design studio RTFKT which produces sneakers and collectibles that can be worn in different online environments. Unlike the virtual sneakers launched by Gucci and Buffalo London earlier this year, which don’t really belong to the buyer, every RTFKT product is backed by a non-fungible token (NFT).
Nike’s big rival, Adidas, managed to hit all 30,000 of its NFTs (worth $ 22 million) dubbed “Into the Metaverse” within hours. With greater awareness created by the possibilities of the Metaverse, more companies are expected to join the bandwagon as we head into 2022.
NFT and metaverse tokens
There are currently over 500 NFT projects listed on Coinmarketcap.com alone. Evaluating them all and finding the best project (in terms of ROI) to invest in will take a tremendous amount of time and effort. On top of that, the chances that the floor price (average price at which the NFT is sold) of an NFT project will increase rapidly like Bored Ape Yacht Club (BAYC) or CryptoPunks are very minimal. Overall, NFTs are more suited to collecting, just as art connoisseurs collect physical art according to their tastes.
On the other hand, take popular Metaverse tokens like Decentraland (MANA), Axie Infinity (AXS), Sandbox (SAND) or even Enjin (ENJ) which are used to create their own metaverse using NFT. It is relatively easier to analyze these projects to understand which ones will have a better future in terms of adoption by a wider community (a key indicator of the growth in the price of a token). If we take a look at the big picture and see what these tokens are built on, it’s Ethereum (ETH) that is again a good long-term investment bet.
Now, while ETH has the primary benefit of having the largest network and developer support for most metaverse projects, there are some inherent limitations like high gas costs, scalability, and more. While Layer 2 built on ETH like Polygon (MATIC) helps cut gasoline costs, but there is still a long way to go in terms of adoption.
This is why it is important to keep a close eye on the developments of other layer 1 blockchains like Solana (SOL), cardano (ADA) as well. The reason investors and developers are interested in these channels to create a metaverse is the diversity of use cases that each brings.
Do we know who will be successful in advance? No. But we can diversify our investments into some of these layer 1.2 chain tokens and metaverse tokens after careful research. Additionally, given the current state of blockchain, there is no one-size-fits-all solution for issues like speed, scalability, decentralization, etc. The future will probably be multi-channel.
Warning: This article was written by Giottus Cryptocurrency Exchange as part of a paid partnership with The News Minute. Investments in cryptoassets or cryptocurrency are subject to market risks such as volatility and have no guaranteed return. Please do your own research before investing and seek independent legal / financial advice if you are unsure about investments.