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At the same time that metaverse became popular in the scientific and technological world, another concept emerged in the crypto world, non-homogeneous tokens (NFT). When the two meet, the blockchain meta-universe becomes the focus of people’s pursuit.
Written by: Elizabeth Howcroft
Translation: Binance Research Institute
How would you face a $69 million artwork that does not exist in the real world?
This is a problem faced by investors who call themselves Metakovan from Singapore. Last month, his purchase of American artist Beeple’s digital art work “Everyday: The First 5000 Days” at Christie’s auction house made the headlines.
This artwork is a non-fungible token (NFT), a new type of virtual asset that can be verified by the blockchain and its ownership. NFT quickly became popular in 2021, followed by soaring prices.
Metakovan, whose real name is Vignesh Sundaresan (Vignesh Sundaresan), plans to display the artwork in four virtual world environments. He is collaborating with architects to design his own duplex gallery in the virtual world, which the public can visit through a web browser or virtual reality technology (VR).
But art is only part of the new economy of the virtual world of blockchain. In this virtual world, land, buildings, virtual characters, and even names can be made into NFTs for sale and reach hundreds of thousands of dollars in prices. In these virtual environments called “meta universe”, people can walk around with friends, visit virtual buildings, or participate in virtual activities.
Metakovan’s plan is an ambitious promise, but he claims to be the world’s largest NFT investor. According to statistics from the website NonFungible.com, the total value of Metapurse, a fund focused on collecting NFTs and other crypto assets, which he founded, has exceeded 189 million U.S. dollars.
“The Cambrian-like explosive growth of NFTs you are seeing now is caused by acquisitions. People want to buy NFTs, and they want to have as many NFTs as possible.” Alan Wenkat, partner of Metapurse Fund Said Anand Venkateswaran (aka Twobadour).
“But this is just the tip of the iceberg. The real explosion will be after people… as expected, after experiencing these NFTs firsthand. For example, on a virtual land, when you can walk back and forth on it and feel this kind of immersive experience. After the experience.”
One of the important participants in this carnival, video game manufacturer Atari (Atari) revealed to Reuters that the company plans to launch its own blockchain-based virtual world and will announce details soon.
Frederic Chesnais, head of Atari’s blockchain department and former CEO of the company, said that no matter how the price of Bitcoin fluctuates, the online virtual environment will become ” Very huge”. He added that NFT real estate will one day be worth millions of dollars.
However, investors should be wary that although a large amount of funds are flowing into the NFT market, this may mean a price bubble, and major losses may be encountered after the bubble bursts. In a market where many participants use pseudonyms to operate, scammers may also come across.
The sharp increase in sales volume of the crypto asset market (the chart shows the monthly sales volume of crypto assets on the opensea platform):
A piece of virtual land: USD 500,000
The enthusiasm of NFT has made people more and more interested in blockchain-based online environments, the most famous of which are Decentraland, Cryptovoxels, Somnium Space and The Sandbox. The prices of virtual land on these platforms have all reached new highs.
Decentraland’s total sales exceed US$50 million, including wearable devices such as land, avatars, user names, and virtual clothing. According to the platform, a virtual land with an area of 41216 square meters was sold at a price of US$572,000 on April 11, setting a record for the highest price.
According to data from the NonFungible.com website, another piece of land in Decentraland was sold at a price of US$283,567 on March 21, while Somnium Space said that a piece of land on its platform sold for more than US$500,000 on March 16. Price sold.
Metaverse enthusiasts compare the movement to buy virtual land with the competition for domain names in the early days of the Internet. Currently, there are thousands of unique landlords on every major blockchain-based platform.
Their theory is that as more and more people gather in the online environment to form a large amount of traffic, these virtual lands in the central area will be vigorously sought after.
Twobadour said: “All virtual land and these virtual spaces are actually real estate, and real estate properties will attract everyone’s attention.”
“This is what everyone cares about. You can profit from it in a million different ways.”
So far, relatively few people have speculated on these land prices.
According to data from NonFungible.com, there were 334 buyers in Decentraland in March, with monthly land sales exceeding US$4 million. In February, it was US$767,400. There were 184 buyers. In January, it was US$246,134. 111 buyers.
The collection of an NFT investor named Whale Shark was valued at more than US$20 million by NonFungible.com in February. He claimed to have spent 200 Ethereum on Cryptovoxels in 2018 and 2019 to purchase virtual land, and also in The 200 coins were also spent on the Sandbox.
He said that at the time the prices of these properties were about US$60,000 each, but now each is worth more than US$400,000.
Some virtual world platforms also have their own cryptocurrency. According to Coinbase data, Decentraland’s MANA coin has soared by more than 3,500% in the past year.
Graphical statistics about the growth of virtual real estate sales (the icon is the monthly sales statistics of virtual real estate on the Decentraland platform):
Virtual carnival, who will come?
Samuel Hamilton, head of community & events at Decentraland Foundation, said that some of the early investors who bought virtual land are now selling the land to others.
Before opening its own blockchain-based virtual world plan, Atari has opened a retro arcade machine in Decentraland and plans to open a casino, while the virtual space area called “Crypto Valley” is The location of multiple encryption companies.
Decentraland cooperated with Adidas to hold a virtual fashion exhibition and auctioned the designed products in the form of NFT. This cooperation also attracts the interest of musicians who want to perform in the virtual world. They can sell performance tickets and peripheral products in the form of NFT.
Hamilton said: “Several of our famous global music festivals are in preparation, and we expect hundreds of thousands or even millions of spectators to attend.”
Last year, the five online concerts held by American rapper Travis Scott on Fortnite, a popular online game owned by Epic Games, attracted a total of 27.7 million viewers.
“Encryption Winter” is coming?
The Sandbox co-founder Sebastien Borget described business activities in the virtual world as the formation of an emerging country, and said that the virtual world economy based on NFT will surpass the economy of the real world within ten years .
However, many people in emerging industries are warning investors of risks in advance.
Ben Nolan, the founder of the virtual world Cryptovoxels, said: “I expect the winter of cryptocurrency to come in the next few months. The entire NFT boom will explode and disappear, and then all the value will definitely burst.”
“It’s really not wise to use NFT as an investment or a way to make money.”
But he did see the future of the virtual world and NFT.
He said: “Will everyone use virtual worlds in the future? Maybe not. But I think a large number of people will, and I think NFT will be an important part of this growth.”
He added: “In fact, taking a walk with another person in the virtual world and looking at artworks is a great way to kill time.”
Whale Shark stated that the vast majority of NFTs are not commercially viable, and believes that only a few people can become the ultimate winners.
However, some investors, such as Australia’s Mateen Soudagar, also known as DCL Blogger, have little interest in returning to real-world investment.
Soudagar said that he has made millions of dollars through cryptocurrency and NFTs, but instead of cashing out, he deposited about 75% of his money in his own crypto assets, and believes that many of his colleagues have done the same. Apart from upgrading his laptop, his lifestyle has not changed.
He said: “If you are a believer in sports, then you will see that the whole world will enter this virtual world, so when you exchange money for legal tender, you are going backwards.”
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