The NFT Paradigm Shift Toward Metaverse and Gaming in 2022

These days, it seems the entire world  is talking about non-fungible tokens. The first non-fungible tokens, CryptoKitties, clogged the Ethereum blockchain in 2017 when they were launched, due to the overwhelming demand from people who wanted to collect, breed, sell, buy, and exchange those virtual cats.

Since then, the concept of NFTs has expanded. There are now many types of NFTs, with the largest portion consisting of video and audio pieces, pixel-art, and financial NFTs. For this article, I’ll focus on a different NFT type - those that provide access to a metaverse.

What is a Metaverse?

To define what we mean when we use the term metaverse, it is a virtual space where users can play, work, and socialize, just like they would in real life. Being in a metaverse creates a feeling that you and the other users are really there. Remember The Matrix? The metaverse is depicted in a negative light in the film, but the concept is accurate.

While it is generally believed that there are three main components of a metaverse:

1. A VR interface
2. An avatar
3. Digital ownership

I would argue against it. There are metaverses such as Axie Infinity that exist without a VR interface, the graphics are simple, as is the game plot and user experience overall.

The same can be said for avatars - they do increase the feeling of a physical presence in a metaverse, but they’re not essential to the experience. 

However, digital ownership is what attracts users and allows a metaverse to last. In my opinion, it is one of the main drivers for the mass adoption of metaverses.

Metaverse, Gaming, and P2E

At this point, I’d like to switch to a gaming metaverse to clearly observe how digital ownership changes the players’ approach. 

Earlier, a concept similar to digital ownership existed, too, but it was subject to a license agreement and was fairly weak. With the development of NFTs as a component of blockchain-based gaming, the digital ownership concept moved to a new level. NFTs as in-game assets belong to players which means that players can do with in-game assets what they would do with real-world assets: they can sell, buy, exchange, or keep them in the hope that their value will increase.

The fact that players can own assets instead of borrowing them is important for game development. Asset ownership makes players interested in playing the game for a long time because they must develop and upgrade their assets in order to increase their value, get new in-game opportunities, etc. These asset improvements mean profit in real life: players can create or buy an asset, upgrade it, and sell it for a higher price. Alternatively, players can be rewarded for some in-game activities and exchange the in-game rewards that are usually paid out in tokens for another cryptocurrency or even fiat money. 

This model of gaming is called play-to-earn and it has become the main driver of the most popular blockchain-based games such as Axie Infinity. 

P2E Alone Cannot Drive the Metaverse Mass Adoption

Despite its benefits, the P2E model can’t be the sole driver of player retention. A player can open the Axie Infinity website and check the graphics, play for a while to see whether they are sufficiently entertained to stay without being paid or receiving rewards. 

I predict that once Axie stops offering lucrative earning opportunities, the majority of players will leave the game. There is no special gameplay, graphics, or other incentives to keep players in the game. First-generation blockchain-based games don’t provide the full experience that a complete metaverse will provide.

The Next Generation of Blockchain-Based Games Is Closer to the Real Metaverse Experience

The future of metaverse and blockchain-based gaming lies in a different type of game. Take SIDUS HEROES as an example. Along with other benefits, this game offers a standard P2E model. Users can own digital assets and improve them to increase their value and get rewards for specific activities. In other words, everybody who invests time in the game can also earn from it. 

However, SIDUS HEROES gameplay isn’t limited to the standard P2E model. Along with digital ownership rights, users have voting rights and can participate in decision-making about how the game will evolve. It’s an additional challenge game developers will face but it is one of the major drivers of the future metaverse.  

A perfect gameplay experience is another incentive for players. Once they start playing they aren’t going to stay there just to earn: exceptional graphics, realistic sounds, and real immersive user experience make players engage. This proximity to real-world experiences is another feature a real metaverse must have to succeed, and SIDUS HEROES offers this experience. 

Finally, the ability of a metaverse to evolve with user behavior instead of focusing on a single application is crucial. In Axie Infinity, this essential detail is taken into consideration. However, since its activities in-game are concentrated around Axies - users can buy, grow, breed them, use them to explore and fight with other Axies - it is futile to talk about a full-scale Axie metaverse. 

New generation games such as SIDUS HEROES aren’t limited to a couple of game scenarios. These games are characterized by their ability to adapt to user behavior instead of limiting users by focusing on one or two applications. In SIDUS HEROES, each user can find an activity that interests them based on their individual preferences. Along with fighting they can organize a training facility, research, travel, mine resources, and farm. Even if their favorite activity is missing, don’t forget about the in-game voting rights.

The Bottom Line

NFTs, P2E, and metaverse push gaming to a new dimension. We can already see how players can benefit from blockchain-based games and the P2E model, and I believe that in the future, we will witness the arrival of a completely new category of games that focus on both the gaming experience and earning opportunities.