The NFTs dominated the year 2021. Non-fungible tokens (NFTs) are being accepted by various sectors, from Gaming and banking to the arts and medical, thanks to the popularity of the underlying technology and its supportive community.
A new video game that allows players to gather, breed, and trade NFT kittens exploded in popularity in 2017. In response to the unprecedented demand for “CryptoKitties,” the Ethereum network experienced significant transactional delays as the number of transactions overwhelmed its capacity limits.
In 2022, hundreds of games will be totally based on NFTs. New fangled tokens are being incorporated into classic games. Furthermore, NFTs have shown promise to change the nature of in-game economies.
The gaming sector benefits greatly from the combination of blockchain technology and NFTs. Play-to-earn (P2E) models are becoming more popular, with games like Axie Infinity and Blankos Block Party leading the pack. They’ve grown in popularity in the last year, especially in underdeveloped nations, since who doesn’t want to earn money playing video games?
Perhaps the most well-known pay-to-earn title is Axie Infinity. Gameplay is similar to that of the Pokémon series, focusing on the acquisition, breeding, and ultimately the deployment of playable Axies into combat. The Axies are NFTs, and the Smooth Love Potion won in fights may be traded on a secondary market for fiat cash. As one of the largest NFT initiatives in the world, Axie has seen over $1 billion in trading volume.
However, the metaverse is the movement shaking up the game industry, with repercussions well beyond conventional Gaming.
In case you haven’t heard of it, the metaverse is a shared digital area that blurs the lines between the virtual and actual worlds.
Many people see the metaverse as the next evolution of the internet and the future of social networking. Mark Zuckerberg has lately revealed that Facebook would be rebranded as Meta and will evolve into “a metaverse corporation.” Meta aspires to create a virtual community that combines work, play, and communication.
What does this have to do with NFTs?
In his announcement, Zuckerberg mentioned the need to incorporate privacy, security, and interoperability into the metaverse. As more of our lives are conducted online, we’ll want more reliable methods of establishing our identities and controlling our digital possessions.
This is where NFTs come in.
The metaverse is analogous to our physical reality, but in a digital format. You can talk to other people, go on adventures, shop, and take on challenges. The same non-fungibility of assets that we see in the actual world is made possible by NFTs in this setting.
In general, scarcity and usefulness are what give assets their worth. In addition, NFTs enable developers to implement scarcity and utility in the metaverse, paving the way for developing a one-of-a-kind economic system.
In fact, Decentraland and Sandbox, two of the market leaders in the metaverse, are already deploying NFTs for this purpose, tokenizing everything from user accounts to in-game items to real estate. Moreover, Twitter and Facebook (Meta) seem to have similar plans.
Consider the housing market as an example. Land in Decentraland is scarce and may be owned as a non-fungible token. The land you purchase in Decentraland is yours to do as you like, just as it would be in the real world. You’re free to use it for whatever you wish, whether a residence, store, art gallery, or billboard.
Your land is precious not just because it serves a purpose for you but also because it is scarce and may serve the needs of others. This indicates that real estate in a popular location will increase in value as more people move there. Real estate values are determined by several factors, including location, square footage, and current market conditions. Because of your NFT ownership, you may profit from the sale and then give the property to someone else.
Republic Realm invested about $1 million and bought a large piece of property on Decentraland because it was in a high-traffic location. They planned to construct a virtual shopping mall there. They are presently leasing out establishments inside the piece of land known as the Metajuku Shopping District.
Transforming in-game markets
Over $50 billion is currently spent yearly on in-game purchases, making NFT-based games an appealing alternative to the existing system for gaming markets.
Due to the existing arrangement, in-game purchases are usually tied to a single user and game, rendering them useless if the user stops playing. Making these in-game objects into NFTs makes them tradeable on a secondary market and perhaps portable to other games.
With scarcity, transferability, and evidence of ownership, players might see in-game purchases as an investment with future rewards rather than simply a pleasant addition to normal Gaming.