Global markets are under constant threat of financial crisis. The media broadcasts daily reminders of the many events that could put the economy at risk. Supply bottlenecks, geopolitical tensions, inflation, bondholder debt, China’s crackdown, vaccine-resistant Covid variants, and a potential housing market crash are on everyone’s mind.
Some will prefer to stay out of financial markets. Others will advise to double down and diversify. Regardless of the decision, investors should at least ask the following: What are the biggest market movers doing?
It couldn’t be more obvious for those who follow the news. There’s been a metaverse race underway since NFTs arrived. Several organizations are involved in the Metaverse, including banks, tech giants, and financial institutions.
Notably, JPMorgan, HSBC, Mastercard, Visa, Microsoft, Google, Meta, and Paypal are all entering the Metaverse. Every month, the list gets longer. These players began getting involved mostly in late 2021 and early 2022, when metaverse gaming projects were at their peak.
Why so much attention? What’s the role of the metaverse amid the global economy? What is the Metaverse anyway?
Metaverse Gaming Explained
The more uses technology has, the broader its definition. Like the internet, Metaverse is a virtual space for everyday interaction. That can mean doing business, learning, working, playing, or socializing.
While a key aspect of the Metaverse is blockchain infrastructure and 3D space immersion, the Metaverse isn’t inherently virtual reality. It’s much more: An Internet-of-Things (IoT), augmented reality (AR), artificial intelligence, Web3 platforms, and smart contracts are all incorporated in the Metaverse. This means something different depending on if the user is gaming, financing, communicating, trading eCommerce or real estate, traveling, developing agriculture, or looking for healthcare.
While a 3D gaming space would be just a VR game, Metaverse gaming would allow users to interact with all other sectors, especially finance. GameFi represents a bridge between gaming and DeFi and forms the current foundation of play-to-earn economies.
“Gamers are a strong community but they are not always interested in making profits. Then again, the DeFi community is a very strong one also and they are not always interested in gaming. We are uniting these two very supportive and involved groups and are trying to provide an interactive and entertaining space that satisfies the needs of both groups.” — Dan Khomenko, CEO of Sidus Heroes
The first mention of “Metaverse” was in the 1992 novel, Snow Crash by Neal Stephenson. The earliest known use case is the NFT infrastructure project Enjin.io in 2017. The first metaverse game – Decentraland – launched in 2020.
Metaverse gaming today is too broad to cover all projects in a single post. The question is how many of the current market competitors will still be around for years to come? While Metaverse is work-in-progress, engagement and game economies are good factors to study to determine the health of a Metaverse initiative.
Metaverse Gaming Economy 101
Video game economies aren’t new. For years, players have traded accounts, sold in-game items, and even got paid to ”grind” unpleasant or unengaging parts of a game. But other than through community-improvised means, most games have no official game-to-fiat marketplaces.
The closest mainstream marketplace is the Steam Community for assets earned in-game. Still, this marketplace doesn’t allow users to withdraw real money or convert to cryptocurrencies. So how is metaverse gaming different?
GameFi projects can offer users three currency types, all of which are tradeable for fiat.
- Infrastructure Tokens (ETH, MATIC, IMX): There are many providers offering infrastructure so that studios can focus on making better games. Since these tokens power P2E games, players should be able to easily trade game assets for the native utility token such as Ethereum or its L2s.
These tokens not only allow for the trading of in-game items for crypto, but also among crypto games.
- Game Tokens: Players can earn and spend game tokens for in-game items or value including equipment collection, DeFi leverage (staking), marketplace trading, voting power, or cash-outs.
- NFTs (ERC-721 tokens): In gaming, NFTs are tradable in-game items. To earn them in-game, players buy NFTs with game-tokens or win them in competitions. Users can list these for sale on NFT marketplaces for the native infrastructure tokens.
In an ERC-20 game like Sidus, all assets have prices in Ethereum regardless of the game token. Eventually, gamers might see multichain games that also accept BSC, USDT, or SOL
Any transactional game could add crypto payment features. What makes metaverse gaming different is immersion technologies:
- AR and IoT devices to play the game in the same way as you interact with the real world.
- VR for real-time, worldwide interaction by building on high-speed, zero-fee blockchains.
- Smart contracts to automatically balance the token supply and demand.
Metaverse Gaming: Paradigm Shift Or Fad?
Metaverse projects aren’t only resilient to crises but also speed up global financial recovery. They bring entrepreneurs, gamers, and artists new ways to earn and build communities around what they love, and unlike traditional finance, metaverse coins use decentralized blockchain tech like DAOs, smart contracts, and consensus models.
Like most assets, metaverse gaming projects rarely have fair valuations. Either they’re overvalued or overlooked. What’s certain is that the metaverse is here to stay.
However, the metaverse of the future may look very different from the current one. Many “me-too” projects will disappear, and only the exceptional projects will remain. Those that put users first, both with engaging games and sustainable economies, should stand the test of time.