Just like ERC20 tokens in 2017, they were used as a cash grab and promise of riches but minted as token allocations to the creators to get a quick buck, simply because there was nothing real behind it backing its value, no ecosystem, or actual technology that gave it any use case or utility.
But in the future, just like in 2020, when DeFi became the newest phase of the development of ERC20 tokens used as “liquidity and staking farms”, they finally seemingly had some utility, technology and use case behind them. Albeit, most of these were still formulated and modeled in such a way to be also an “exit liquidity scheme” for the insiders by means of hyperinflationary dilutive rewards and insider allocations with liquidity farms as a means to create exit liquidity. Though this has practical purposes, if the team does intend on building a real platform with functional use cases and value accrual, it is mostly abused for the first purpose.
Enter NFTs and the “Metaverse” seems like catchy phrases right? Another attempt at cash grabbing the general retail investors, indeed. However, there is true value beyond it just like the internet bubble gave birth to the eventual rise of online ecommerce giants like Amazon, the internet cloud services like AWS, and social media platforms as we know it now like Facebook (now known as Meta), Twitter, Instagram and TikTok.
So how exactly will the metaverse prevail in the future of the internet and how does NFTs have a direct relation to it? Think cash flowing assets. Right now, one of the most powerful ways to being financially secure and wealthy in life, is to acquire cash flowing assets such as rental properties, businesses, etc. What the blockchain and NFT technology allows, is for such things to be built entirely ‘within the internet’, i.e. the metaverse.
In the future, the world as we know it will exist inside the internet itself, in infinite multiverses of worlds we create, each of them being with its own microeconomy connected directly to our real world global economy, through most fundamentally, its own ecosystem within.
What will be the next largest industry or sector by trade in the future world economy? If you think it’s metaverse, you’re missing the context. The metaverse is merely an idea, but what will be the actual building blocks within the metaverse, will be the worlds itself. Enter gaming.
Games and game developers will become the most valuable skill of the metaverse-era, like we have software developers now for all the big billion dollar tech companies, they will build the worlds within the metaverse and will open up a whole new open economy. Blockchain technology and NFTs give the ability for games to harness the economic value of trades and markets within games to be openly accessible and liquid in the real world. Real-world trading in games currently is frowned upon by the game developers because they lose revenue from the game when trades are done outside of their control. Blockchain gives them the control, and NFTs become the digital assets that are then minted and tracked on the blockchain. The metaverse will be a world of games powered by the blockchain, the greatest use case of blockchain.
Game items, skins, and any production in a game will use NFTs that give the game developers power over generating revenue for their game IP and ecosystem. ApeCoin with the Otherside will be the first to capture this. It will most likely be a Pokemon-like game with combat systems and being able to generate resources that can be then extracted from the lands/deeds to power up or “evolve” your pokemon (Kodas) in the game and traded on the market through the blockchain and tracked via NFTs, which generate cash flow through transaction fees paid to the game creator.
In the era of the metaverse, owning the game worlds equity will become the new “stock market” and game development companies will become the new Silicon Valley tech company startup unicorns.
The key difference to all this, is these “NFTs” will not be something you simply go out and mint and sell on the marketplace after “the drop”, which is just a fancy name for an exit liquidity scheming, capital raising event, with insider allocation that can be then dumped on retail liquidity through the “floor price”. NFTs will be EARNED, through playing the game, and its value will be represented through the value of the ecosystem of the game itself, and how many ACTUAL players play the game. I.e. World of Warcraft, or any big and successful MMORPG. The only difference being, that it is built on the blockchain and all trades and transactions are done through it, freely and openly, and you can become a part equity owner of the game company itself through a non-NFT token (a fungible token; ERC20) or the game currency itself, on top of the in-game assets being minted using NFTs as you play the game in a play to earn economy, where you can have jobs inside the game by playing it, just like in real life. Think Grand Theft Auto 6 RP, in the metaverse.
If you think about it all, what is so elegant about all of this is how blockchain enables this all to be possible, because of the original consensus mechanism of “Proof of Work”, where now, with the metaverse, we are essentially arriving at a new age of “Proof of Gameplay”, whereby players playing the game itself will literally create blocks on the blockchain and generate block rewards to the winner of each “match” of the game, just like how “Proof of Work” is essentially a puzzle mathematic “guessing” game for who (a computer) guesses the right blockhash and gets the right to generate the next block and thus gain the block reward. The metaverse with game worlds will be the next trillion dollar industry with NFT in the center of it all. Mining in minecraft will be literally mining the blockchain.