After NFTs Take a hit from the Crypto Slump, Metaverse Comes to the rescue with increasing utilities that require NFTs
Despite the Crypto Slump….The Metaverse is developing and growing exponentially, and for it to be effective and have high utilization, it will need more NFTs, non-fungible-tokens, which are a form of crypto assets.
A quick backdrop on NFTs, they were first introduced in 2014, as a unique token that exists on the blockchain, in 2021 it broke through into the mainstream, and people rushed to buy this new type of asset that presented itself in the form of digital arts and music. It existed online-only with the ability to be traded with a transparent transaction history.
It did not stop there, gradually the growing NFT tech was incorporated with multiple games which provided an important use case for the NFTs to expand further.
According to a new study by Juniper Research, NFT transactions will increase from 24 million in 2022 to around 40 million by 2027, a 64% increase over 5 years.
There are several reasons for this growth, one of them, as we mentioned, is the increasing use case of NFTs in the gaming industry, also, we see a growing demand for NFTs because of increasing opportunities for Online Shopping and other experiences on the Metaverse.
Brands Sold on the Metaverse
We are witnessing an increasing interest by different brands to enter the digital market and transact within the Metaverse. Brand names such as Gucci, Adidas and Nike are bringing their brands into the Metaverse to increase their digital growth. For example, in December 2021, Nike bought a virtual shoe company that makes NFTs and sneakers ‘for the metaverse’.
Merchandise sold on Metaverse by the Gaming Industry
Besides brands, the gaming industry has a long list of items to be purchased on the metaverse such as “wearables” which are clothing for the avatars, that can be bought and sold on the blockchain by NFTs.
Musical Events on the Metaverse
In January 2022, The Sandbox partnered with Warner Music Group (WMG) to create the first music-themed world in The Sandbox gaming metaverse. It will be a virtual concert hall. Snoop Dog’s recently acquired Death Row Records is poised to become an NFT label, and the artist has already purchased a large block of land on the Metaverse offering additional revenue generation streams.
A Word of Caution
Although NFTs, digital assets offer avenues for new growth and profit, the report by Juniper Research cautions vendors to be aware of NFT scams available on the market. NFT scams concerning the security of NFTs in crypto wallets, as well as pump-and-dump schemes!
The report urges vendors to be aware of the risks of operating in an unregulated environment, which may be home to fraudulent activities and scams.
The report emphasized the need for regulators and industry leaders to work together to standardize processes that will result in; reduced environmental impact and built-in consumer protections, to enable vendors to utilize NFTs as a safer and more environmentally friendly medium to further engage with consumers.
Metaverse will contribute to the Long-term Success of NFTs
The Juniper report predicts metaverse-linked NFTs will be the fastest-growing NFT segment over the next 5 years; increasing from 600,000 transactions in 2022 to 9.8 million by 2027.
The research urges consumer-facing businesses, to capitalize on this metaverse-linked NFT growth, they should create NFT‑based content that will meet the changing demands from a younger consumer who is more tech-savvy, and more open to purchasing novel forms of online and digital content.The research also points out how the current crypto bear market has acted as a catalyst to eliminate projects that do not present long term utility or have long-term sustainability.