As a biz journalist, Trine has covered finance from NY, tech from Silicon Valley, and the blockchain space.
In 2017, non-fungible tokens (NFTs) arose as a medium of exchange without an economy. They became a way of trading kitschy virtual collectibles like CryptoKitties — that is until a collector paid $170,000 (600 ETH) for a kitty named Dragon. The new digital token had created digital scarcity. In a digital economy with runaway reproduction trampling over copyrights, NFTs offered a way to attach data to a currency. Only the holder of the NFT with the unique identifier for Dragon could sell, exchange, or destroy the cryptocollectible.
In virtual worlds, NFTs have found an economy. Virtual worlds create a virtual microcosm of the real economy. People confined to their homes during the pandemic are populating virtual art galleries, museums, gaming platforms and diverse 3D world experiences.
NFTs are becoming the main medium of exchange. Visitors can irrefutably prove ownership of the digital assets they buy, sell, and trade.
NFTs, however, are still stuck in closed virtual worlds. In gaming, your knight, his sword, horse or shining army cannot do battle in another gaming world.
When each item has its own unique NFT ID, technically the knight can gallop off into another game. Interoperable blockchains make this feat possible. The gaming world is tokenizing game assets to game across virtual worlds.
Some old economic principles still apply. Game developers and gamers will benefit from economies of scale and network effects — as more people have access to gaming assets, NFT value will increase. But in virtual worlds, the gravity effect is less important. That is, virtual world trade is not limited by physical distance. Game assets and NFTs can teleport anywhere.
Here’s how the cryptographically unique tokens could become more valuable than fiat currencies or crypto tokens in open gaming worlds on the blockchain.
When SecondLife began selling virtual land in 2003, many people did not get it. Eventually, e-commerce shops, art galleries, and game developers set up shop in the Linden economy. Clever crypto users circumvented regulators by entering the virtual Linden world to exchange crypto for fiat through Linden Dollars. But the Linden world missed the opportunity to move to the digital ledger that hosts Bitcoin and other cryptocurrencies — the blockchain.
Virtual lands hosted on the blockchain provide more ways to monetize your virtual experience. Traditional ways to make money on virtual lands include buying land low and selling high, trading wearables and crypto collectibles, renting land, creating experiences and e-commerce shops, and earning advertising revenues.
On the blockchain, token holders are platform owners. If game developers create hot games that attract more gamers to your metaverse, you benefit from token appreciation, as well as yield earning opportunities by freezing tokens in your wallet for staking, liquidity pooling and farming.
Non-fungible tokens (NFTs) offer even more value creation opportunities. Fungible tokens are interchangeable. One US dollar can be exchanged for another greenback. NFTs, in contrast, are unique and can reflect scarcity and rarity of an underlying digital asse
The ability to attach information to NFTs opens up all sorts of new value creation opportunities. NFTs are used to track the provenance of art and precious metals. Businesses are moving NFT-tagged products through production and supply chains. The MMOG/MMORPG markets are the first to exchange NFT assets across different virtual worlds.
Gaming NFTs are poised to become the hottest. NFTs of virtual lands are among the top 25 NFTs traded. They include Decentraland (MANA), Somnium Space (CUBE) and Cryptovoxels. The virtual world with the most NFT trading activity is a dedicated MMOG/MMORPG gaming platform, The Sandbox (SAND).
The number one selling digital asset across all virtual worlds is land. Following land, gaming assets and wearables are popular. The Sandbox gaming assets are the top non-land NFTs. NFTs for new virtual land MegaCryptoPolis, where building the city and exchanging building assets for $MEGA to stake and yield farm is the game, are quickly rising.
Game developers are recognizing the value of tokenizing gaming platforms through gaming ERC-721 tokens. Decentraland, the first blockchain virtual world, plans to build new gaming experiences in Genesis City to capitalize on the rising value in gaming. Its venture capital arm Metaverse Ventures is funding the development of casino properties in Vegas City and gaming in Decentral Games.
The newest trend is merging virtual gaming with the hottest trend in crypto, decentralized finance (DeFi), to earn NFTs. The game play at MegaCryptoPolis is building the microeconomy to get $MEGA. Building materials trade as ERC-721 NFTs are acquired through free-to-play missions and swapped for $MEGA. Once citizens earn $MEGA through city-building tasks, they earn yield by staking, liquidity mining and yield farming in Ethereum and TRON pools.
AnRKey X is an esports platform opening up cross-game trading of NFTs. The Singapore-based platform has merged team eSports and DeFi into a new industry called m$ports. Gamers compete in teams in liquidity and staking pools created by Armies via Uniswap. The pool with the highest APY wins the gamified $ANRX NFTs on the Decentralized Gaming Platform Exchange (gDEX).
MegaCyrptoPolis citizens will be able to transfer value across the Ethereum and TRON chains. AnRKey plans to introduce cross-game NFT usage. NFT game assets, however, are still stuck in closed gaming worlds.
Geography and physics are not limitations in the virtual world, but unfortunately NFTs tied to one world are. The ability to teleport NFT-based gaming assets across connected gaming ecosystems through interoperable blockchains will unleash the full value of NFTs.
This year, gamers in The Sandbox will be able to take their NFT-enabled gaming assets and play and sell them on Ubisoft, Atari, or in other virtual gaming worlds, and vice versa. The Sandbox virtual world is expanding across metaverses (gaming worlds) to create a gaming colossal in the virtual world.
Through its partnership with Ultra, gamers will be able to teleport to their tokenized games and assets other major gaming platforms.
In open metaverses, gamers will have more opportunities to market and trade tokenized gaming assets and experiences. The original Sandbox game, an App Store Best Games two years in a row, attracted over 40 million users. These gamers can now enjoy full digital ownership of their creations and gaming experiences and re-use and resell them.
And because gamers can prove ownership, value, demand, scarcity, and rarity of NFT-based gaming assets, these items are more valuable. In open gaming worlds, potential NFT value is gravity-defying.
Gamers will soon be jumping across popular game houses and taking their NFTs with them. New products are springing up to help them manage the explosion in NFTs spread across wallets, games and chains.
If you do not know what to get the gamer in your family for Christmas this year, consider an NFT Wallet. The NFTBank wallet consolidates a user’s NFT assets from different gaming platforms on one screen, as well as provides NFT price charts and other analysis tools. The MOBOX Wallet is wrapping NFTs to use in DApps across Ethereum, TRON, BSC and other chains.
Any NFT wallet can plug into Polyient Games’ ERC-2309 extension to batch transfer NFTs . So if you sell NFTs for a knight, horse, sword and shield, you can package the gaming assets in one bundle and send them off to another gaming world.
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