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The Metaverse can’t live without NFTs

Last Friday, I visited Blender Gallery in Athens for an exhibition by Philip Tsiaras. When speaking gallery’s curator I was pleasantly surprised to find out that they had created NFTs of the artist’s artwork, making them available on their curated marketplace called “Blenderverse.”

It’s no secret that NFTs changed the art game. Although non-fungible tokens (NFTs) have been a part of the cryptocurrency market since 2014, interest and adoption have risen rapidly over the last two years.

After Beeple’s historic sale, the NFT gold rush took off.

Artists, investors, and just about anyone wanted a piece of the action. From sneaker manufacturers selling virtual sneakers to the creators of famous memes, to global brands, everyone wants in.

Looking at some market stats, since the beginning of 2021 NFT transaction volume has grown significantly, but growth has been fluctuating. So far in 2022 the value sent to NFT marketplaces continued its 2021 growth in January, entered a downturn in February, and then began to recover in mid-April.

Despite the fluctuations in transaction volume, the number of active NFT buyers and sellers continues to grow. It’s estimated that the existing $3 billion market size will reach $13.6 billion by the end of 2027.

So what exactly is driving all this interest in non-fungible tokens?

A quick explanation is that NFTs live at the crossroads of several tailwinds. Digital natives prefer to own digital products over physical objects. These digital natives want to utilize NFTs to play games and interact with each other.

But beyond the hype of multi-million dollar digital art sales, the true significance of NFTs may lie in enabling the metaverse.

There is a huge focus and a lot of money poured into the development of the metaverse. Websites are selling plots of land in the metaverse as NFTs.

In 2021, an investment firm bought 2,000 acres of real estate for about US$4 million. Normally this would not make headlines, but in this case, the land was virtual. It existed only in a metaverse platform called The Sandbox. By buying 792 non-fungible tokens on the Ethereum blockchain, the firm then owned the equivalent of 1,200 city blocks.

Metaverse could be a game-changer for NFT gaming. Rather than letting players port weapons or powers between games, non-fungible tokens will more likely serve as building blocks for new games and virtual worlds.

With apps like VRChat, spaces for communication in VR are already thriving, and it’s not far-fetched to assume that these spaces can also serve as a fertile trading ground for NFTs. Sellers can easily provide links and previews to assets on the web or mint assets directly in the VR landscape.

The stuff appearing in the metaverse like a Bored Ape wearing the yellow Adidas jacket, virtual land purchases, digital art collections, and tickets for the ABBA concert… are where NFTs come into play.

 

NFT use cases can pretty much go from art, social media, metaverse, concerts, music, brands, virtual land, game items, investment products, licenses, collectibles, fashion…

Fashion is another of the earliest sectors to grasp the economic potential of NFTs and the metaverse.

Luxury house Burberry created NFT accessories for the Blankos Block Party video game, while Louis Vuitton launched its own NFT-studded video game, LOUIS THE GAME. Meanwhile, RTFKT – bespoke shoemaker to the metaverse – designs limited edition NFT sneakers that can be worn in virtual worlds and have already posted millions of dollars in sales.

NFTs are going to be a very powerful tool. They will represent any digital asset in the metaverse. In the next few years, businesses will make increasing use of NFTs, as a fundamental part of advertising and marketing, fee-generation, and wider business models.

We’ve only seen the tip of the iceberg…

by Ilias Louis Hatzis is the founder and CEO of Kryptonio wallet.

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