The popular computer game “Sims,” which debuted over 20 years ago, allowed users to create a digital version of themselves and project their lives in the virtual world.
Think of the Metaverse as a more powerful three-dimensional “Sims” where you can enter your character's world. It brings the real into the virtual world and allows you to engage in digital interactions and experiences.
What Is the Metaverse, and How Does It Work?
The Metaverse blends aspects of social media, gaming, augmented reality (AR), virtual reality (VR), blockchain, and cryptocurrencies to build a digital world where users can interact with each other even without being in the same physical space.
The end goal of the Metaverse is to become a single network that is as open, interconnected, and interoperable as the internet is today.
The Metaverse concept is still in its infancy and needs a lot of work before it matures. Currently, it is a collection of different, disconnected ecosystems (apps or infrastructures), all of which allow for unique and distinctive experiences. Some examples include Decentraland, Roblox, and The Sandbox. They all have access, avatars, interactions, and currencies.
Most digital experiences remain exclusive to a particular platform and can’t be easily transferred to other virtual worlds. In technical terms, this raises the problem of interoperability. Solving it would merge the different disconnected ecosystems we have today, allowing users to access the Metaverse through a single gateway and bring their digital identities and possessions to one place.
What Can You Do in the Metaverse?
While the Metaverse concept might sound a bit dystopian, you can do many things you like in real life, including working, playing, shopping, socializing, etc. The main difference is that everything happens in a virtual world.
Here are a few examples of what you (and your avatar, respectively) can do in the Metaverse:
Create, buy and sell goods.
Explore the real or theme-like worlds.
Hang out with friends and other users.
Engage in online learning.
Visit a digital art gallery, a restaurant, or a shopping center.
Attend a concert or a sports event.
Use public services.
How Do NFTs Fit into the Metaverse?
Since Metaverse users will create, buy and sell goods, they would need the tools for that. Enter: NFTs. They provide users with transparent and tamper-proof authentication and certify their ownership over the digital assets they own. Alternatively, NFTs help impose rules or carry and verify essential information. In a nutshell, NFTs are the law and the primary tools to prevent chaos from taking over the Metaverse.
In the Metaverse, NFTs can serve a lot of purposes. For example, they can represent a house, a contract, a ticket, a digital identity, a piece of art, etc.
An example of how NFTs help facilitate a real estate deal in the Metaverse: Institutional and retail buyers and sellers often engage in transactions for virtual land, buildings, or other facilities in the Metaverse. Each piece of real estate has its unique NFT, which contains asset-specific information. After the buyer purchases the building, he receives the NFT, which certifies the transaction and gives them exclusive rights over the real estate.
MetaFi – What Is It and What Is Its Role in the Metaverse?
Meta Finance (or MetaFi for short) is where decentralized finance (DeFi) meets the Metaverse. The term covers the entire universe of protocols, products, and services that enable financial transactions involving fungible and non-fungible tokens in the Metaverse.
MetaFi aims to build upon the existing DeFi model by improving interoperability and promoting a more innovative community-driven approach to financial services. It also aims to ease the mass adoption of Web3, and expand the blockchain use cases.
A part of the opportunities for MetaFi users include:
Take out a loan by using fungible or non-fungible tokens as collateral.
Yield farming – earn interest on your cryptocurrencies or NFTs.
Build marketplaces for various sectors (virtual real estate, fashion, entertainment, etc.)
Create utility tokens that grant membership perks to fans of sports teams and bands, or stakeholders of your business.