The first NFT, Quantum, emerged in 2014 and was sold for a mere $4.
Fast forward seven years, and The Merge NFT shattered all records by selling for an impressive $91.8 million, becoming the most expensive NFT to date.
Since then, NFTs have gained wild popularity, attracting attention from art experts, tech experts, and organizations trying to invest in this lucrative opportunity. One of the most prominent directions for NFT investment is metaverse.
NFT and Metaverse: Explaining the Terminology
What Are NFTs?
People often assume NFTs are just digital artwork. However, there is much more to them than this.
NFTs, or non-fungible tokens, are unique, immutable, and indivisible tokens that serve as certificates of ownership on the blockchain. Basically, they’re created when an artwork (either image or video) is minted, providing unbiased confirmation of the digital asset’s ownership. It can then be easily accessed with a smartphone. Anyone can trade tokens straight from an NFT marketplace.
Here are a few real-world examples of NFT applications:
- digital collectibles that can be traded for fiat money or cryptocurrency
- game rewards
- tickets for events
- digital identity
With many businesses still trying to grasp this concept, the following article will shed light on NFTs in the metaverse. We’ll define this fascinating topic, explore the most common applications, share our insights, and show you how to use it for your business success.
What Is Metaverse?
Metaverse is the concept of a 3D world in which you can immerse, create, and share virtual experiences. In this blockchain environment (which can be accessed by VR and XR systems), you have an avatar to customize and millions of spaces to visit and interact with others.
By eliminating the need for physical resources and travel, the metaverse seamlessly connects everything, offering unparalleled accessibility.
Here are some real-world uses of metaverse:
- conferences or events
- virtual worldwide tours
- real estate tours
- digital ads
NFT in the Metaverse: 6 Most Common Use Cases
Virtual marketplaces allow users to buy and sell digital assets as well as create exclusive items within the virtual game or world, making NFTs attractive to collectors. Nike is one example with its Nikeland, a micro-metaverse built within the Roblox ecosystem.
Just as in the physical world, VR provides a convenient platform for admiring and buying art with the help of NFTs. Unlike traditional marketplaces with set prices, the metaverse allows you to explore the artwork in intricate detail. This benefits both art enthusiasts and artists, as they can receive direct payments without involving intermediary companies. Voxels, a virtual world on Ethereum, is one of the most prominent examples. It hosts museums and art galleries on its platform, including FC Francisco Carolinum Linz in Austria and the San Francisco Museum of Modern Art.
Virtual real estate
NFTs can represent ownership of virtual real estate within the metaverse, offering users the ability to buy, sell, and trade virtual land, buildings, and spaces with NFTs. This opens up opportunities for virtual real estate development and investment. Decentraland is a great example of a virtual territory where land can be sold as NFTs.
NFTs can serve as tickets or access passes for exclusive virtual events, concerts, conferences, and experiences in the metaverse, enhancing the impression of scarcity and exclusivity.
Brands may leverage NFTs to create unique advertising campaigns or sponsor virtual events and spaces. NFTs can offer rewards and exclusive access to products or services, driving engagement and brand loyalty.
With the help of NFTs and metaverse, users can invest in resources (such as virtual land or assets) and generate yields in this way. Such in-game assets can then be traded and help owners generate passive income.
How To Implement an NFT With Metaverse
Some companies have been already taking advantage of metaverse NFT, and you may also want to make good use of the opportunities they offer. However, since most companies do not have VR developers on board, we recommend working with a software development team that has expertise in building immersive apps.
Here at Lionwood.software, we guide our clients through the process of implementing NFTs in metaverse:
Step 1: Define the use case
During the discovery phase, you should outline the specific use case for your NFT within the metaverse, determining what type of digital assets you want to tokenize (real estate, art, collectibles, in-game items, or any other unique virtual content), and clearly define the objectives of your NFT project.
Step 2: Choose the blockchain platform
Select a suitable blockchain platform to build and deploy your NFT. Make sure you compare various blockchain options to ensure they offer cost efficiency, scalability, and the features you require for your business.
Ethereum is one of the most popular choices for NFT development, with a thriving ecosystem and extensive support for smart contracts.
Step 3: Develop smart contracts
Developing smart contracts will help you govern the creation, ownership, and transfer of NFTs as well as define their standards (for example, ERC-721 or ERC-1155). Smart contracts will also include all the essential functions: minting, transferring ownership, and managing the metadata associated with each token.
Step 4: Metadata and tokenization
Once you’ve developed your smart contracts, you will be able to create and manage the metadata for each NFT, including artwork, descriptions, properties, and other relevant information. Ensure that the metadata is efficiently stored and linked to each NFT token.
Step 5: Create a user interface
Design an intuitive UI for users to interact with the metaverse NFT — browsing, buying, selling, and managing tokens. In addition, don’t forget to integrate cryptocurrency wallets to allow users to store, buy, and sell their NFTs securely.
Step 6: Security measures
Implement rigorous security measures to protect user data and smart contracts from potential threats. Conduct code reviews, perform security audits, and address vulnerabilities to ensure a robust NFT ecosystem.
Step 7: Carry out quality assurance
Whether you choose automated testing tools or manual testing, QA of the entire NFT implementation should include unit testing, integration testing, and user acceptance testing. Ensure that the smart contracts and UI function as intended and meet the desired requirements.
Step 8: Deployment
After testing, it’s time to deploy the NFT smart contracts and associated components to the selected blockchain network. And immediately following this, you should monitor the system to detect unforeseen issues or user feedback and update it to enhance performance, security, and user experience.
Step 9: Marketing
Promote your metaverse project via social media, forums, and other marketing channels to attract potential users, artists, and investors to your metaverse NFT platform.
Step 10: Scalability and future upgrades
There will always be room for improvement. As the metaverse grows, make sure your chosen blockchain platform can handle a high volume of transactions. In addition, make sure to plan for future updates and enhancements with new features based on market demands.
Lionwood.software’s Opinion on NFTs in Metaverse
NFTs and metaverse hold immense potential to revolutionize digital ownership, creative expression, and economic opportunities for businesses and users. Offering new forms of digital collaboration and value exchange, NFTs open the door to a number of opportunities for companies in various industries.
Here are some valuable tips for utilizing NFTs in metaverse from Volodymyr Kaminovskyy, the CEO of Lionwood.software:
Tips for utilizing NFTs in metaverse
Focus on interoperability by adopting NFT standards for seamless asset transfers and interactions.
Prioritize security: ensure you’ve implemented robust data encryption mechanisms to protect your digital assets and user data.
Foster a strong community throughout the NFT ecosystem to collect feedback and make improvements.
Explore various use cases for NFTs within metaverse to stay ahead of trends and competitors.
Engage with artists, developers, and content creators to gain insights on NFTs within the metaverse.
Stay informed on the legal landscape surrounding NFTs to comply with relevant laws and regulations.
By embracing NFTs in the metaverse and implementing these tips, you will be able to create and derive value within the digital realm. Contact Lionwood.software today, and our blockchain specialists will help you implement your NFTs in the virtual world in the most effective and profitable way.