In his 1992 novel titled “Snow Crash,” Neal Stephenson dreamed of a world where people escaped their dystopian existence by connecting to a plane of virtual reality called the “Metaverse.” In the story, users could explore the online world through digital avatars that functioned as personifications of their own physical traits. Once considered science-fiction, Stephenson’s prescient predictions of the future are now becoming a reality, and those who sit on the sidelines could miss a lucrative opportunity to invest in what could be the future of social connectivity.
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What is the Metaverse?
Often portrayed in movies as a grim, alternate reality where humans are forced to fight for survival, the metaverse is actually a network of 3D, virtual worlds meant to foster social connection. Simply put, the metaverse will allow users to enter a digital world where they can shop, buy, sell, play, and replicate their own physical experiences by creating an avatar. As Mark Zuckerberg stated in his recent Founder’s Letter, “The defining quality of the metaverse will be a feeling of presence — like you are right there with another person or in another place.”
While the Metaverse may sound like a confusing concept, the idea is simply the next step in the evolution of the internet. In the current internet business model, also known as Web 2.0, a select number of corporations control closed economies, where online gamers cannot monetize their investments and efforts outside the platform.
In the user-controlled metaverse, which has been dubbed Web 3.0, capital controls are eliminated. This allows users to own their digital assets, like non-fungible tokens (NFTs), and trade them with other players in-game. These assets can also be transferred to other digital experiences, creating an entirely new Internet economy that can be converted to real-world currency.
Additionally, while Web 2.0 is solely operated on cloud and mobile networks, current and future metaverse games will be located on the blockchain.
When Will the metaverse Arrive?
At a recent technology conference, Meta Platforms CEO Mark Zuckerberg stated that its Metaverse “will be mainstream in 5-10 years.”
Although Meta’s flagship product is in the early days of development and won’t be available until an estimated date of 2030, the company recently launched its first virtual world, Horizon Worlds, on December 9, 2021. Available to access through Oculus’ VR headset, Horizon Worlds allows users to create their own home and interact with friends through parties and virtual gatherings.
Meanwhile, Microsoft plans to launch its own version of the Metaverse in the first half of 2022. Its product, called Microsoft Mesh for Teams, allows workers to meet with each other in a virtual setting through their smartphone or laptop.
Popular blockchain-based games like Decentraland, Sandbox and Axie Infinity also exist. Although these games aren’t integrated with VR headsets, they do allow users to buy digital land and earn tokens that can be exchanged for money.
The first step for anyone who wants to invest in the metaverse is to buy cryptocurrency from an online exchange. This requires creating a crypto wallet, which will be necessary to store whatever coins you end up buying. These tokens can then be used to buy digital land and items common in metaverse games like Axie Infinity or Sandbox. Although there are hundreds of wallets and crypto exchanges around today, we’ve listed some of the most popular ones below.
Founded in 2012, Coinbase is both a cryptocurrency trading platform and wallet, making it easy to use for beginners just getting into the space. The site is one of the largest U.S.-based cryptocurrency exchanges and users have access to over 100 different coins. And although the site does take a cut from all cryptocurrency transactions, storing your cryptocurrency is free. Additionally, Coinbase members can store both Bitcoin and ETH-based cryptocurrency in their wallets, unlike MetaMask which is not compatible with Bitcoin.
Another major cryptocurrency trading platform, Binance is currently the world’s largest exchange by trading volume. In 2019, the company founded Binance.US, a domestic offshoot of the company that offers most of its parent’s perks, including very low trading fees and over 50 tradable digital currencies.
Created in 2017 by blockchain software company ConsenSys, MetaMask is a web browser extension and mobile app that allows users to store Ether and other Ethereum-based tokens, as well as interact with decentralized applications (dApps).
MetaMask is special because it lets users conduct transactions with other Ethereum-based addresses without having to be a part of the Ethereum network. Before MetaMask was created, those who wanted to engage with dApps had to give out their security keys from private wallets. Now users can quickly connect with NFT Marketplaces like Foundation while retaining their privacy and personal data.
Purchasing metaverse Coins
Now that you’ve created a crypto wallet, it’s time to start buying coins that can be used in various virtual worlds. Keep in mind that many of these metaverse tokens can be acquired by playing on a respective platform and earning rewards. Below is a list of some of the most popular games (and the tokens associated with them) so that you can get started.
Founded in 2017 and built on the Ethereum blockchain, Decentraland is a virtual reality platform where users can buy and sell parcels of property called LAND. Those who own Land can use the game’s tools to develop their property in any way they desire. Each plot of LAND is 16 square feet, and only 90601 parcels are available.
MANA is the cryptocurrency that users must possess to pay for LAND, as well as other additional virtual goods and services. The coin has a supply of 2.2 billion, and there are currently 1.8 billion tokens in circulation.
The coin recently gained media exposure when it jumped by 400% on the news that Facebook had rebranded itself as Meta.
MANA can be purchased on Binance, Coinbase, Gate.io, and KuCoin
The Sandbox (SAND)
Similar to Decentraland, The Sandbox is a digital world where players can build, own, and monetize their gaming experiences in the Ethereum blockchain using the SAND token.
Some of the top activities for users include buying digital real estate and uploading NFT creations made with VoxEdit. Once these NFTs are registered on the blockchain, they can be offered on the marketplace where other players can purchase them.
SAND can be purchased on Binance, Uphold, and Gate.io.
Star Atlas (ATLAS)
Star Atlas is a Solana-powered metaverse that allows users to explore a virtual extra-terrestrial space with a customized spaceship. In the process, gamers can create their own virtual universe, explore the galaxy, join a faction, or acquire digital assets by entering battles.
One downside of this platform is that is a native cryptocurrency, ATLAS, must at times be converted to another cryptocurrency called POLIS while playing. While this can be frustrating for players who want to use one coin, POLIS can unlock additional interactive experiences on the platform.
ATLAS can be purchased on Gate.io, Bityard, and FTX.
Axie Infinity (AXS)
Possibly the most popular metaverse platform in existence, Axie Infinity allows players to create and breed pets called Axies and compete with each other to earn rewards. The Axie characters, which have been described as “fierce” and “adorable,” power the game and serve as the actual NFTs. Each creature is a living, digital asset that can be bought or sold at any time.
Once created, Axies can be trained to fight against other players’ Axies or digital monsters to earn metaverse tokens called Axie Shards (AXS) and Secret Love Potion (SLP). While AXS is a governance token, SLP is directly involved with the gameplay and can be used for breeding new Axies.
Since it began trading in early 2021, AXS has skyrocketed over 35,000%
AXS can be purchased on Uphold, Binance, KuCoin, Gate.io, and Coinbase
Another popular metaverse platform, Ultra allows users to purchase, play, and sell games, as well as interact with influencers and watch live-stream feeds of tournaments and contests. The site continues to attract users for its free and almost instant settlement of transactions.
Ultra’s native token, UOS, also has a number of site use cases that involve staking and earning rewards in the form of NFTs. Additionally, the platform could also help users interact with entertainment services by leveraging new DeFi applications.
UOS can be purchased on Gate.io, KuCoin, Uniswap, Bancor Network, and Bitrue
Although Illuvium has yet to be launched, the metaverse platform is arguably one of the most exciting investments of 2022, with its native coin ILV already trading at around $550.
An open-world RPG game developed on the Ethereum blockchain, the platform has upped the stakes for blockchain gaming, with trailers featuring high-level graphics, realistic gameplay, and detailed settings. The players’ main task is to explore Illuvium’s virtual world, collecting entities known as “Illuvials” along the way and battling other players.
ILV can be traded on Gate.io and various altcoin exchanges.
Buying Virtual Land
No metaverse investing guide would be complete without mentioning how to acquire virtual real estate. Two of the most popular sites to buy land are Decentraland and The Sandbox. As we’ve already mentioned, it will be necessary to create a crypto wallet in order to buy the native tokens for each respective site. Once you create an account, you can connect your crypto wallet to make purchases.
Nearly all of the digital real estate you buy will be in the form of non-fungible tokens (NFTs), which are digital tokens on blockchain networks that represent proof of ownership. When an investor purchases a piece of a metaverse land plot, the blockchain network powering the Decentraland metaverse verifies the sale and transfers ownership.
Investing in metaverse property doesn’t end with the initial purchase. Landowners in the metaverse can rent, sell, or build on their property by adding interactive games or public buildings. Those with enough cash can even invest in real estate companies that specialize in buying metaverse land packages. Republic Realm, for example, is a real estate company that will assemble members with a diverse portfolio of metaverse land holdings across more than 20 platforms. However, those interested will have to part with a large chunk of cash as prices start at 350 ETH ($770,000).
Investing in metaverse Stocks
For those who want to buy a piece of the metaverse without purchasing in-game digital items, there is always the option to invest in the stocks of companies behind the technology.
Meta Platforms, Inc. (formerly Facebook) has generated widespread media attention over the past few months after Mark Zuckerberg announced the news that the corporation was switching business models from a Facebook-centered social media site to a metaverse product.
Roblox Corporation (RBLX) is another popular investment whose platform is essentially a video game. With over 43.2 million daily active users who play on the site, Roblox has used the pandemic to grow its user base and make money by selling its virtual currency – which players can use to access games, experiences, content, and even virtual clothing for their characters. Many analysts have made the point that Roblox has the foundation of the metaverse within its own platform.
There are also semiconductor companies like NVIDIA Corporation (NVDA), who chipsets are being used in computers and servers need to run complex calculations for the metaverse.
Considering that there are hundreds of companies involved in metaverse platforms, some investors may find it easier to purchase an ETF, or a fund that holds positions in a number of different stocks associated with a given sector. Two popular names are the Roundhill Ball Metaverse Theme ETF and the ProShares Metaverse ETF.
ProShares’ top holdings include Apple Inc. (AAPL), Meta Platforms Inc., and Nvidia Corp, while Roundhill Ball has its largest positions in Nvidia, Microsoft (MSFT), and Chinese tech giant Tencent (TCEHY).
Purchasing NFT Art
In the end, only you can decide how to invest in the metaverse, but there may be no simpler way than buying NFT Art. As the metaverse expands and different platforms merge, players are going to need to display art and other collectibles within their digital homes. This could lead to a surge in the price of NFTs as investors scramble to claim art. Besides, when you eventually own your own beautiful virtual property on a tropical island, you’re going to want something on the wall to remind you of home.