Metaverse NFTs | How Will NFTs Work in the Metaverse?

Metaverse NFTs will act as an access token for entering specific locations & show proof of ownership for distinct items in the virtual world. Learn more here.

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Metaverse non-fungible token (NFT) projects are taking the world by storm. What started as “just another fad” can no longer be ignored by economic experts worldwide. 

Of course, some of the jaw-dropping prices paid for a “cartoon monkey” or “digital kitten” NFT may cause some people to scratch their heads at first. But now, Web 3.0 and the Metaverse are being taken much more seriously. 

To better understand NFTs in the Metaverse, this article explores: 

What is the Metaverse?

The term “Metaverse” refers to a variety of immersive digital spaces where users can interact and engage online. Each participant in the metaverse often has avatars they can control to interact with other users, play games, and experience activities like what they would experience in the real world. 

According to Mark Zuckerberg and other notable names in tech, the Metaverse is “the future of the internet.” But the concept of a Metaverse isn’t entirely new. 

The term “Metaverse” was first coined in a 1992 novel, Snow Crash, written by Neal Stephenson. In his novel, Stephenson talked about real-life people being represented by digital avatars in a digital world.  

Recent blockbuster movies, like Ready Player 1 and Ryan Reynold’s recent comedy project Free Guy, have given their own adaptations of the Metaverse concept. While these entertainment visions may not accurately predict the Metaverse that ultimately gets built, they still present an interesting perspective of what the future might hold. 

NFTs and Their Role in the Metaverse

To put it simply: NFTs are tickets to the Metaverse. This idea may confuse some people who hear the term “NFT” and immediately think of Doodles or Cool Cats. While it’s true those are NFTs, they represent a different sector of the growing NFT space. 

Metaverse NTFs are more than crypto collectibles. Metaverse NFT projects take advantage of the unique properties of non-fungible tokens to allow users to have true ownership of digital property.  

NFTs and Metaverse Real Estate

NFTs and Metaverse real estate fit together perfectly since NFTs represent ownership of a digital item. The smart contracts that secure NFTs give investors many of the same benefits  of traditional real estate. A key difference is the transactions happen much faster in the Metaverse.

Investors do not have to wait months, or even years, to see a potential return on their investment. Digital properties represented by NFTs can be sold on any of the NFT marketplaces. This means the transactions are not slowed by physical inspections, closing attorneys, and title searches. And compared to a fairly stable traditional real estate market, the price volatility in many NFT markets gives investors opportunities to potentially realize returns on their investments much faster.

According to CNBC, sales of Metaverse real estate reached $501 million in 2021. Experts predict that number could reach $1 billion by the end of 2022.  

Most Metaverse real estate activity takes place on 4 platforms: Decentraland, Sandbox, Somnium, and Cryptovoxels. These virtual properties can be held, developed, and treated like real-life real estate, which has motivated some innovative investors to join pretty progressive NFT projects. 

One of the most significant projects is being launched by the investment firm Republic Realm. The company purchased $4.3 million worth of real estate on the Sandbox platform.  

Republic Realm plans to develop its purchase into 100 islands that will serve as a virtual vacation destination. Fantasy Islands will have villas where people can grab some “R&R” as well as a separate market for rental boats and jet skis. 

Communities Hatching in the Metaverse

Fans of the Metaverse also praise this growing digital world for its ability to bring people together who aren’t located in the same physical space. Users with common interests can get together and “hang out” on one of the many Metaverse platforms regardless of where they live geographically.

Block parties in the Metaverse are a growing trend that gives people a sense of togetherness and community. Groups who own similar NFTs or own land in the same area of the virtual world can get together and party on the blockchain.  

These exclusive NFT communities fill the streets of platforms like Decentraland where users can gather for particular metaverse NFT drops like Zombie Punks or specific areas of town, like art enthusiasts congregating in the Museum District. Decentraland even hosted a Metaverse New Years Eve party in a virtual Times Square to ring in the start of 2022. 

These and other events require the purchase of NFT tickets for a user’s avatar to gain access. NFTs are pioneering the concept of a “community economy,” and these examples demonstrate just a few ways the NFT metaverse is evolving to fit that mold.  

Different NFTs in the Metaverse

Metaverse NFTs are still evolving, and most investors are wondering which projects they should watch as the industry grows. While no one can predict which projects will be good or bad investments, experts recommend keeping an eye on a few areas of the industry. 

  • Land/Real Estate NFTs 
  • Gaming NFTs 
  • Fashion NFTs 

The list of notable Metaverse sectors will continue to grow as more major players enter the Metaverse. For example, Walmart, the grocery giant, is planning to offer its own cryptocurrency and collection of NFTs. No one can predict which projects will succeed in the long term, but a good rule of thumb for the Metaverse is to treat it like real life. If an idea seems good for the real world, there will probably be a need for it in the Metaverse too. 

The Future of NFTs in the Metaverse 

The Metaverse NFT industry is here to stay, and the entire space will only continue growing over time. Metaverse users will own NFTs to access certain virtual features, neighborhoods, and events. Metaverse NFTs will also change the way large companies are doing business. Big corporate names like Morgan Stanley, Walmart, and Facebook have all started to accommodate the Metaverse.

Browse the FTX blog for more information on how the NFT Metaverse is taking shape.

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