From gaining VIP access to celebrity events and showing off your digital swag to selling virtual plots for 7 figures, here’s how NFTs fit into the metaverse.
Updated Mar 25, 2022
Many companies on MoneyMade advertise with us. Opinions are our own, but compensation and in-depth research determine where and how companies may appear.
NFTs
Metaverse
Crypto
Imagine a typical day in the metaverse. You hop inside a DeLorean DMC-12 and participate in a death race. After that, you visit a virtual museum to re-watch your idol’s simulated memories. Later that night, you meet up with friends at a retro club with floating disco floors.
Okay yes, all of these scenes are ripped off from Ready Player One. But they might not seem so far-fetched in the next 5 years. One thing’s for certain, you can’t have a functioning metaverse without non-fungible tokens (NFTs).
Here’s how NFTs will change the way we prove our identities, own property, attend events, consume content, make and borrow money inside the metaverse.
Metaverse NFTs are paving the way for self-sovereign identity (SSID), one of the most revolutionary applications of blockchain technology in both the real and virtual world.
Imagine having a digital passport that automatically proves your identity and grants you access to your data, coins and tokens across all metaverses.
This could come in handy when, for instance, sharing your certifications with metaverse employers or your health records with telemedicine providers. Not to mention, you could choose to monetize your precious data by licensing it to advertising platforms or researchers.
Platforms like Unstoppable Domains and The Ethereum Name Service (ENS) are already making strides toward this SSID future by allowing users to buy NFT domains that act as crypto addresses, Web3 logins and universal usernames.
Wearable NFTs run the whole gamut, from your avatar’s skin and outfits to accessories like swords and luxury pieces like limited-edition sneakers.
The fashion industry has certainly been quick to recognize the economic potential of NFTs and the metaverse, with NFT collections like Dolce & Gabbana’s “Collezione Genesi” selling for millions of dollars and Nike acquiring RTFKT — a virtual sneaker design studio.
Collezione Genesi
Source: UNXD
Aside from branded NFTs, normal users can also buy, sell (and profit off) wearables through NFT marketplaces like OpenSea.
NFTs
On the one hand, NFT avatars can act as extensions of our real-life identities. But as the growing popularity of NFT profile pictures (PFP) shows us, people are more interested in buying NFTs for social status and a sense of belonging.
NFT collections like Bored Ape Yacht Club (BAYC) and CryptoPunks grant users access to gated content, exclusive events and private communities of the rich and famous. And with Yuga Labs (the owner of BYAC and CryptoPunks) recently raising $450 million, these NFTs will soon act as VIP passes inside their metaverse.
NFT tickets are the future of virtual events inside the metaverse, boasting features like:
Examples of the above mentioned include MetaRing, an access pass to exclusive drops, locations and events inside multiple virtual worlds, and Snoop Dogg’s private party inside The Sandbox last year—where only 1,000 NFT tickets were made available for the event.
VR can hardly beat the feeling of seeing a masterpiece up close and personal. But viewing art inside the metaverse does have its advantages, like not having to incur travel costs to visit a gallery.
That’s why we’re seeing museums and auction houses placing artworks inside virtual worlds, like the San Francisco Museum of Modern Art in Cryptovoxels and Sotheby’s in Decentraland. Even crypto billionaire MetaKovan intends to build a virtual museum to display his NFT art collection, which includes Beeple’s $69 million Everydays NFT.
Everydays
Source: Artnet
Musical artists like Grimes, Nas and Kings of Leon are also pioneering new ways to monetize their content and engage fans with NFTs. Kings of Leon, for instance, dropped an NFT album with perks like limited-edition vinyl, front row seats to future concerts and exclusive audiovisual art. Pretty soon, we’ll see musical NFTs tie in with virtual concerts.
Over in Hollywood, Reese Witherspoon’s production company Hello Sunshine recently partnered with World of Women (WoW) — an NFT project celebrating equality — to develop movies and TV shows. Could this partnership result in the first metaverse NFT films?
Play-to-earn gaming is arguably the most coveted metaverse job. In NFT games, players can buy, sell and collect characters, cards and other in-game items.
These items are in turn valued based on their rarity or utility in the game. Successful examples of such play-to-earn NFT games include Axie Infinite, Sorare, Alien Worlds, My Neighbor Alice and more.
As with most games, the top players (and earners) tend to have access to the most NFT resources like land and weapons. But gaming guilds like Yield Guild Games (YGG) are lowering the barrier to entry in these metaverse economies by lending resources to smaller players in exchange for a portion of future earnings.
Platforms like Fractional are also making valuable NFTs more accessible (and liquid) by allowing users to buy them fractions.
NFTs
Virtual land is perhaps the most well-known application of NFTs in the metaverse. Each of these virtual worlds consists of a finite quantity of parcels, with this scarcity driving up virtual land prices. Here, metaverse NFTs act as land deeds by providing proof of ownership.
As is the case in the real world, location is everything in virtual real estate. Plots that are close to popular attractions or celebrity estates tend to fetch the highest prices. The record for the most expensive virtual land purchase to date sits at $4.3 million for a plot inside The Sandbox. Aside from selling land for a profit, NFT owners can also rent it for passive income or use it to host social events.
NFTs offer an endless variety of money-making opportunities inside the metaverse, from play-to-earn gaming and selling NFTs to help nonprofits raise funds to generating passive income with projects like Mutant Cats, which provides NFT holders with 10 $FISH tokens per day.
One lesser-known innovation is the ability to use your NFTs to take out loans. In the traditional world, banks provide loans that are collateralized by assets like houses or cars. Well, imagine being able to benefit from the price appreciation of your prime virtual land without having to sell it. Well, you already can.
With lending & borrowing platforms like NFTfi, users can take out loans that are collateralized by their virtual land, vehicle, profile picture or other types of NFTs. But do be careful. If you default, then the smart contracts involved will transfer your NFT over to the lender. No debt collector or middlemen required.
At this pace, there’s no reason to doubt that just about every asset and financial service will soon be represented with NFTs in the metaverse.