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Facebook shocked the world when it changed its name to “Meta” last October. With the name change, the social media giant that has helped shape the internet over the past two decades appears to have decided to capitalize on the hype of the metaverse craze that nearly hijacked the latest cryptocurrency bull run.
And Meta is not alone.Microsoft Announce Soon it will be adapting its iconic software product into its own enterprise version of Metaverse, because Hundreds of crypto projects Attach yourself to new buzzwords, adding relevant words such as NFTs, AR and VR to their messages.Metaverse real estate sales by the end of 2021 top $500 million. For entrepreneurs unfamiliar with the concept: yes, it means people are spending millions on clubs, nightlife venues, and sports venues that only exist virtually.
Another little known fact? Most companies building products around Metaverse, a more fully immersive internet involving virtual and augmented reality, use blockchain as a major component. Metaverse developers combine key crypto industry features such as NFTs (non-fungible tokens) and utility tokens to power their ecosystem.
Related: The New Wave of Web 3.0 Metaverse Innovation
In a way, the intertwining of cryptocurrencies and the Metaverse makes perfect sense. If you are creating a virtual space where people can experience real-world events, such as live music performances or even marriage proposals, with other real people, then you will need a digitally native currency to power the world economy. On the other hand, the association with and reliance on crypto makes such startups vulnerable to wild swings in the crypto industry.
As such, they were equally affected by the collapse that pushed the crypto industry into a bear market in May, thanks to Terra (LUNA) dropping from $120 to 2 cents — 99.9% correction – This sent shock waves to the market. The Metaverse sub-industry of the broader crypto industry is likely to be hit harder than the DeFi industry (decentralized finance), where LUNA seems almost indispensable.
Just as the value of real tangible property soars nearly 19% The average price of virtual land for the six Ethereum Metaverse projects fell last year 85% in August. The agreed reason for the price slump could be waning interest. There is one macro trend to watch out for, though: Soon, it’s reasonable to predict that Metaverse land prices won’t recover for months or even years. Until the next bull run builds hype around it again.
Both the Metaverse and DeFi can be thought of as two distinct creations of Bitcoin, the first ever application of cryptocurrency and blockchain technology. In this bear market, however, everyone will behave very differently.Unlike NFTs that form the backbone of the blockchain Metaverse industry, a large number of proved to be a scaminstitutional demand for DeFi exposure remains strong.
Related: How NFTs Are Changing Real Estate
In June, JPMorgan’s blockchain unit announced plans Bringing trillions of dollars of tokenized assets into DeFi, while launching “Project Guardian” to experiment with institutionally compatible DeFi through liquidity pools that constitute tokenized deposits and bonds. The move comes a month after Wall Street giant Jane Street signed a loan deal with BlockTower Capital to borrow $25 million and plan to expand it to $50 million.
But why are institutions still interested in DeFi when Metaverse projects and NFTs are in trouble? Of course, there are a lot of scams in DeFi too.
It all goes back to real-world usability. While partying in a virtual world using NFT avatars sounds like fun, it turns out that people prefer the real, tangible world to any Metaverse experience. The need hasn’t emerged yet, probably because the Metaverse project needs to build a better bridge between the real and virtual worlds. Before people would prefer to kill time in Decentraland, they would head to New York City and party in Brooklyn — especially now that the pandemic-time restrictions are gone.
Instead, DeFi platforms are offering investors a way to physically stake their gains commodity. Take EQIFi, a regulated DeFi platform backed by EQIBank. The platform provides users with various financial services, including yield aggregators, loans and deposits. In early August, EQIFi partnered with crypto retail bridge Shopping.io, which will allow holders of its EQX tokens to spend their staked tokens real world commodity at top retailers like Amazon and Walmart.
Related: 4 Ways DeFi Generates Passive Income
In this sense, DeFi started looking for ways to fulfill the original promise of Bitcoin, allowing the little guys to make money through the decentralized protocol. This is also followed through by letting him spend his money where it matters.
As DeFi continues to open up access and expansion to traditional investment vehicles, cross-chain startup platforms such as Synapse Network, which offers quick-start businesses with customizable products ranging from anti-bot solutions to token economic models, will help them expand. In turn, the rate at which DeFi matures as an industry and changes everything we know about finance will accelerate.
That’s not to say that Metaverse won’t rise again, or that blockchain won’t play an important role. With major players like Meta and Microsoft aggressively pursuing their visions, it’s almost inevitable that smaller innovators will get back into the game. Metaverse’s use case as a blockchain and NFT is much younger than more traditional financial applications. In Bitcoin families, as in most families, older children pave the way for other siblings.
Related: Blockchain is Everywhere: Here’s How To Understand It
