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When CryptoPunks and CryptoKitties first hit mainstream news, the potential of online collectibles known as non-fungible tokens (NFTs) were only apparent to the small yet mighty group of digital natives looking to revolutionize the next phase of the internet. Predictions that NFTs would become a cultural phenomenon were few and far between — with collections like Bored Ape Yacht Club serving as a ticket into the ever-exclusive club of CEOs and billionaire entrepreneurs — or that the enigmatic metaverse would soon be viewed as the “promised land,” where Paris Hilton can party on her personal island while PwC scoops up the latest real estate for its next business venture. Even wilder was the idea that a major fashion brand like Balenciaga would collaborate with Fortnite to appeal to digital natives, or that Best Buy would be eyeing simulated shopping experiences to boost brand loyalty.
Although the evolution of digital assets and a simulated world have come as a surprise to many, it is the fast and furious adoption from businesses across the globe that is truly raising eyebrows. And for a good reason: investments in the metaverse have already surpassed $500 million with no indication of slowing down, luring players across mainstream sectors to enter the space.
While the rational entry plan for organizations to join the metaverse is diving headfirst into Decentraland, Sandbox, or other developed spaces, the real business opportunity lies in the creation of individual, unique metaverses for each company — offering consumers an immersive, end-to-end experience that is truly irreplicable and can evolve without boundaries.
For example, when looking to enter the space you may be surprised to find that Decentraland only offers a standard character design while Sandbox remains voxelized, making it impossible for brands to successfully implement the distinctive designs or granular details that make them unique. To some degree, building in a pre-existing metaverse is a repeat of the Web2 experience, where you are forced to develop content within the confines of someone else’s platform.
As more businesses get involved in Web3, it is imperative to capitalize on the unique opportunity of creating something completely in your control (think: avoid metaverse-wide glitches in Sandbox) that fits your purpose and narrative. It’s also necessary to break into the metaverse in a way that aligns with the core competencies of a business that provides capital for its clients to create groundbreaking projects in the simulated world while protecting intellectual property.
We’re already seeing organizations move in this direction, propelled by legitimate business and user benefits. Take gaming, for example — software development company Niantic, creators of fan-favorite Pokémon Go, raised $300 million to build its own metaverse infused with its own data, information, services and interactive creations. Epic Games is also jumping on the bandwagon, with the intent to build a metaverse with its own look and feel, aiming to onboard one billion users.
Shopping is another segment where endless metaverse opportunities await both brands and consumers. The metaverse itself, with its sensory and experiential nature, inherently entices users to engage in some sort of shopping. A recent study found that of those shopping in the metaverse, 70% converted to a purchase. Further, JP Morgan’s recent report on the metaverse found that each year, $54 billion is spent on virtual goods. For brands entering the sector, building their own metaverse from the ground up has significant advantages when it comes to consumer experience, end-to-end branding, and full control to avoid brand risk.
And with so many people purchasing in the digital world, there are significant environmental benefits to pursuing a new metaverse. Both Decentraland and Sandbox are based on the Ethereum blockchain, which requires a significant amount of energy to operate and therefore charges high gas fees and is inherently less environmentally-friendly than other chains. Crafting a new space means enjoying the freedom of building upon — or even creating — a blockchain that consumes less energy and is kinder to the environment.
Looking ahead, as more metaverses are built, the ultimate achievement will be interoperability across all worlds — so users can window shop in a simulated luxury clothing brand, then change into digital designer digs while playing Illuvium with their guild as millions across the globe watch. This creates a digital identity that is transferable across metaverses and enables avatars (a user’s digital identity) to travel and explore digital experiences too.
At such a crucial moment in the metaverse’s development, with so many players rushing into the space without taking a bigger-picture look at the benefits of building a world from the ground up vs. building within something already in existence, we will soon find that the experiences offering truly branded (down to the last detail), lifelike experiences, and constant evolution will be the ones that enjoy the most success. It will be crucial for projects to stand apart in the sea of sameness as the space quickly begins to crowd, and can only be achieved by creating something of your own to control and build.
And remember, a metaverse is only as valuable as the people inside it.
By Rebekah Keida, NFT expert and head of marketing at top cryptofinance firm XBTO.
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