The concept of the metaverse continues to prevail around the world, seeing mainstream awareness and becoming the focus of much discussion in the blockchain industry. Propped up by AI, AR, VR and blockchain technology, the metaverse is also known as Web 3.0, suggesting that the virtual world will soon become a “parallel universe” to the material world.
Products for the metaverse currently on the market cover a variety of areas, but its nascent ecosystem is still in the exploration and development stage. In the second half of 2021, the DeFi sector, the metaverse and NFTs began a new development cycle rich in opportunities.
Cointelegraph China and NOVA CLUB hosted the Meet The Metaverse NFT World New Wave conference, co-hosted by MetaEstate, in YunJian Art Museum of the Shanghai World Financial Center on Oct. 24, 2021. The conference’s aim was to discern the current development stage of the metaverse, the potential of NFTs, and the future pathways and breakthroughs that can be expected in both the metaverse and NFT markets.
Icarus Finance, APENFT Fund, and MetaGame were the title sponsor of the conference, with Waves Ducks as the gold sponsor and Xcarnival as the silver sponsor.
The conference featured four keynote speeches and four panels. Participating in the discussion was MetaEstate co-founder Jackey Jiang, Prometheus co-founder Sean Yu, Dfund managing partner Linyuan Yang, head of Waves China Steve Li, Dewave Venture co-founder Jeffrey Chu, CryptoArt.Ai co-founder Jianxin Qin, Conflux Ecosystem lead Yu Qing, head of Neo Ecosystem Growth John Wang, Cypher Ventures founder Martin Tang and more than 30 other guests.
Exploring the metaverse’s ecosystem diversity
According to co-founder of Dewave Venture Jeffrey Chu, human beings will be migrating from the real universe to the metaverse alongside technology development in the future. In his view, digital migration will occur in stages via the concept of digital twins — that is, a coexistence of the virtual world and the real world facilitating seamless migration together. Following digital migration, an entirely new set of economic systems will be formed in the metaverse, with new capital and commodity markets emerging thereafter. This new capital market will mirror the ideology that impacts the existing financial system, and its accompanying commodity market is the NFT market.
Jackey Jiang, co-founder of MetaEstate, said that every avatar is a builder and content contributor in the metaverse, and that the metaverse’s combination of the virtual world and the real world is also a fusion of reality and imagination.
He added that art galleries are some of the more popular building types in the metaverse, as the metaverse and artworks are naturally compatible with each other, so more artists are building virtual galleries to exhibit their artwork without the risk of loss or damage.
Investment in the metaverse and the parallel world
Head of Waves China Steve Li added that nowadays, NFTs possess a combination of revenue attributes and utility attributes, and players today place a lot of importance on yield. However, he believes that as user experience improves and the metaverse becomes more complex and immersive, more metaverse projects will put a stronger emphasis on utility rather than revenue, which will propel the NFT market to a more mature and advanced level.
According to Yushan Zheng, partner of Waterdrip Capital, the term “metaverse” was not invented by the blockchain community, and that the concept of a metaverse is much broader than just blockchain, which makes up only a part of the metaverse. In his opinion, there are many sectors within the internet, and blockchain is one of them. The metaverse can include all the latest topics in the tech community, especially on the internet. No matter the industry, there are opportunities to be found for each in the metaverse, Zheng said. For example, he continued, programmers can snap up NFTs, investors can invest in projects, and people who excel at governance can build governance models in the metaverse. The metaverse has brought together people from a wide range of backgrounds, which Zheng believes is one of the major reasons it piques interest.
Cypher Ventures founder Martin Tang argued that when investing in a metaverse project, one should consider it from various perspectives, avoid misjudging the market, communicate with peers, and even compare it with similar projects. Tang believes that future metaverse projects will strongly differ from projects seen in the previous two years. Stable operation is crucial to NFT projects, games or social networking, he said. “In the past, we might have paid more attention to the project itself, such as technical background, but now we focus more on overseas operation and market expansion potential.”
John Wang, head of Neo Ecosystem Growth, said that assets are necessary in the metaverse, naming NFTs as foundational support. In the future, he continued, more people will be able to exhibit their NFT assets in the metaverse, and with its market capital influxing, average people will eventually gain a deeper understanding of its concept. Wang added that there is a good chance that the volume of metaverse infrastructure being built will settle down, including cross-chain projects.
Linyuan Yang, managing Partner of Dfund, considers blockchain as an operating-system-level opportunity to restructure the financial sector and master a major asset class for the current generation of investors. For investors, he said, the first priority is to detect the era’s most significant variable.
Potential applications of NFTs in 2022
Jianxin Qin, co-founder of CryptoArt.Ai, said that NFT technology is the first tool in human history to solve the problem of scarcity and authenticity of digital assets by technical means. As a productivity tool, NFTs can optimize and promote the overall development of the era, which he believes has a promising future. He said that he is personally optimistic about the network copyright market; according to data from 2020, the market size of network copyright in China reached 1 trillion yuan ($157 billion). There will be a lot of room for growth in this space in the future, Qin continued.
According to Conflux Ecosystem lead Yu Qing, from a macro perspective, NFTs are like a bridge between the blockchain world and the material world. As a fundamental element to the metaverse, NFTs contribute to the development of its entire economic system, Qing said. Given that the metaverse serves as a bridge attracting traditional industries to build it, Qing continued, development of the blockchain space will be promoted in turn. In both the blockchain world and the traditional world, NFTs bridge assets by turning traditional data into NFTs and circulate them in the virtual world. This also makes real data resources more valuable with the help of both blockchain and the metaverse’s utility.
Vivi Lin, contributor at XCarnival and columnist at FT China, said that less than 5% of the world’s population are engaged in the crypto space, and the NFT market makes up a small share in that space. Lin said that NFTs will only see true mainstream adoption when more outsiders enter the sector, therefore it is only through embracing the mainstream population that the NFT market can grow dramatically in the future.
For Cong Zhang, ambassador of KAKA NFT Metaverse China, blockchain games are one of the applications of NFTs with relatively low barriers to entry. However, he said that blockchain games need to take time to consider how their economic models combine with blockchain. The ambassador added that, in fact, NFTs with financial attributes are also worth looking forward to because they are more accessible and bring potential benefits for users, but the general direction of NFTs is still the metaverse.
Investment in the metaverse: Directions for investing in the virtual future
According to Junjia He, QuarkChain Core Engineer and Technical Leader, any internet company can engage in metaverse, however, these companies may still want to sell ad space or user data due to compliance concerns or other factors. CryptoPunks may not have as many resources as major companies, but the CryptoPunks metaverse with native cryptocurrencies looks more interesting, as the company represents the spirit of blockchain in their own part of the metaverse.
Wayne Zhang, partner of Metachi, said the reason why the metaverse prevails now is from the support of NFTs, as it reassuringly turns illusory data assets into real assets. In his opinion, the relationship between NFTs and the metaverse is that the former solved the authenticity issues of data assets, and the foundations of the metaverse followed.
Blair Zhao, core volunteer of the X Protocol community, said that NFTs came into the public eye earlier than the metaverse, and that due to its unique functions, NFTs can still be acquired by people under the high-pressure of current policies. For example, she said, people can buy NFTs using fiat via Alipay. According to Zhao, the combination of NFTs and the metaverse is able to bring capital and users.
GameFi: The direction of the metaverse’s application
Alex Hui, founder and CEO of PolkaFantasy, said that a lot of GameFi products are developed by technicians in the blockchain industry rather than traditional game developers. There is still a gap between blockchain games and the games that people really love, he stated, but it is certain that GameFi opens a new world for people who, in turn, incorporate GameFi into the blockchain ecosystem. In the past, e-sports have been dominated by excellent players, where only winners can earn money through games, whereas in GameFi games, all players have a chance to win rewards.
Now, metaverse is still in its early stage of development, said Sergey Medvedev, managing partner of Cryptomeria Labs. He added that Ethereum is a metaverse with no fancy interface, yet it creates value for people who use it. Medvedev defined that GameFi is a given term that is prospering in the crypto community, where people are launching games, playing games and gaining rewards.
The future of the metaverse: Challenges and opportunities faced by GameFi and NFTs
According to Sean Yu, co-founder of Prometheus, games are the best entry ticket to the metaverse, as they have the potential to bring meaning to the metaverse’s economic system. The virtual world is not only about investment and speculation, Yu said, but also consumption. He continued that games need to be immersive, and if they are not, existing apps are enough. Various different types of games are being made to be easily playable, and the development of the metaverse will partly follow the rules of traditional games.
Yu mentioned that the factors of success for metaverse game projects include gameplay, promotion, economic models and first-mover advantage. Once the first player who actually pays for game content appears, the metaverse’s economic model is likely to be established for the long term (five years or more), he said. Yu believes that the core goal of the metaverse’s economic system is to tackle the issue of inflation, but its crude, inflation-burning model sometimes pushes barriers to entry so high that attracting new users is almost impossible.