Blockchain metaverses, non-fungible tokens, decentralized finance, and other hot projects are taking the crypto world by storm.
What are blockchain metaverses?
Blockchain metaverses allow you to create content within a virtual world. This is great for games, social experiences, and more. We’ve all heard of metaverses like Sims and Roblox, which are wildly successful games with tens of millions of active users.
On the flip side, what if we want to buy and share our creations with others in a decentralized way? That’s where blockchain metaverses come into play! In other words, they let us create content that exists on a distributed ledger and is accessible without an intermediary. These projects pack a lot of value.
Let’s look at Next Earth as an example. Imagine a world where everyone has their own personal parcel of virtual real estate. The long-term vision is that you can build whatever you want on your land—a house, a tree fort, a medieval city, or anything in between.
With the advent of blockchain tech like Ethereum, we can now create immersive content that is owned by its creator and is publicly accessible. This means that users are incentivized to adhere to the rules of the platform since they own their property (or crypto-collectible).
In addition, since the content is immutable on the blockchain, it’s easy for other people to verify that what you built actually exists. The end result? A more engaging and social experience for all. These metaverses are still in their infancy but have incredible potential to transform online gaming and social experiences.
What is an NFT?
Non-Fungible Tokens (NFTs) allow users to trade digital assets representing things from music to digital artworks without having to exchange them through an intermediary like a centralized exchange.
They are unique because they can only be traded one-to-one with no possibility of chargebacks or fake transactions. This makes them secure and trustless compared to traditional physical assets, which could potentially be replicated or forged.
We first heard about NFTs when artists started selling digital representations of their work called “CryptoPunks” back in 2017. Around the same time, we also saw the explosion of CryptoKitties. Now, NFTs have become a serious global phenomenon, with collectibles selling for millions of dollars at a time.
However you choose to classify NFTs – whether as virtual assets, digital entertainment props, or crypto-collectibles – one thing remains clear: they have massive potential.
What is Decentralized Finance?
Decentralized finance isn’t just about NFTs, it’s also the concept of crypto assets existing on a blockchain without any centralized control or oversight. This is a big departure from how traditional financial products like stocks and bonds have been handled in the past.
The good news is that it opens up all kinds of possibilities for new types of financial products including securities and investment funds.
Since the ownership of these securities exists as non-fungible tokens on a blockchain, we can all agree on their value as represented by each token’s owner. This means that we don’t need to trust governments, banks, or other centralized institutions to determine their real-world value—we can simply rely on math.
We can even program smart contracts into these tokens to automate some aspects of their issuance and transfer. Imagine if you could create your own security token backed by actual shares.
Investment funds (think DAO Funds) are very similar to securities above except instead of having one “real-world issuer” managing your fund, there could be thousands or hundreds of thousands contributing to the fund through voting rights via decentralized autonomous organizations (DAOs).
Similar to how DAOs govern application governance in decentralized applications, they could also be used to govern the returns and capital management for investment funds – allowing anyone with a cryptocurrency wallet to participate.
In conclusion, the combination of blockchain tech along with smart contracts and decentralized governance makes it possible to create a financial system that is cheaper, more transparent, and far more democratic than traditional systems.