Reading this article, you will get answers to the following questions. What is Metaverse? Who is building Metaverse? What is GameFi? What role does NFT play in GameFi? What are the blockchain game experiments based on NFT? What is the brief history of GameFi, and how valuable is GameFi? Where can I find the alpha in GameFi? Who is the leader in advancing GameFi’s infrastructure?The last 12 months have taken crypto investors for a wild ride. The market plunged in May, shedding 50% of its value in a matter of weeks. Then the frenzied enthusiasm returned, sending the crypto market to new highs in November. Unfortunately, the tide has turned once again. The collective value of all cryptocurrencies currently sits at $2 trillion, a third below its all-time high.
However, there is a silver lining for long-term investors. Decentralized finance (DeFi) applications — products that feature programmable money, making it possible to borrow, lend, and earn interest without going through a bank — make financial services more efficient. And investors are throwing money at these platforms. Over the past year, DeFi investments have soared 1,000% to $242 billion.
More importantly, given its value proposition, I think DeFi will continue to gain traction in the years ahead. And both Avalanche (CRYPTO:AVAX) and Terra (CRYPTO:LUNA) have become key players in this emerging industry, a quality that makes both cryptocurrencies smart long-term investments. Here’s what you should know.
Avalanche is a smart contracts platform designed to support scalable decentralized applications (dApps), including DeFi products. The blockchain is secured by so-called snow protocols, a type of Proof of Stake consensus in which validators verify transactions by sampling a small subset of nodes (computers), rather than waiting for each node to reach agreement with every other node. That makes Avalanche fast.
In fact, Avalanche is the fastest smart contracts platform in the blockchain industry in terms of time to finality. The network has been clocked at 4,500 transactions per second (TPS), but the developer team believes that figure could reach 20,000 TPS. And those transactions are finalized in less than two seconds (i.e. irreversibly added to the blockchain).
Moreover, Avalanche is compatible with Solidity, the programming language used to build dApps on the Ethereum blockchain. In other words, developers can easily deploy their Ethereum dApps on Avalanche too. That interoperability has already been a significant growth driver. In fact, Avalanche is the fourth-most-popular DeFi ecosystem, with $11.2 billion invested on the platform.
In short, Avalanche is fast, scalable, and interoperable. And in the coming years, those three qualities should make it more popular with dApp developers and users, as well as DeFi investors. As that trend plays out, demand for the AVAX token should rise, driving its price higher.
Terra is a smart contracts platform that aims to make financial services and payments more efficient. To that end, it features an array of stablecoins, which are cryptocurrencies designed to track the price of fiat currencies. For instance, the TerraUSD token is tied to the price of the U.S. dollar, and the TerraKRW token is tied to the Korean won. More importantly, the entire ecosystem is powered by LUNA, another token that exists on the Terra blockchain.
The price of a stablecoin is determined by supply and demand. That means rising demand could push the price of TerraUSD above $1. In that scenario, the network would incentivize investors to convert LUNA to TerraUSD to increase supply and lower the price. Alternatively, falling demand would pull the price of TerraUSD below $1, at which time the system would work in reverse, incentivizing token holders to convert TerraUSD to LUNA.
Of particular note, Terra is built using the Cosmos framework, a blockchain protocol secured by the tendermint consensus mechanism, which itself is designed for interoperability and speed. Terra can theoretically scale to 10,000 TPS, and those transactions are finalized in six seconds. Likewise, because Terra stablecoins are built on blockchain technology, financial services powered by the platform are more efficient than traditional options.
What’s important for coin holders is that they can earn interest by lending stablecoins to the Anchor protocol, a popular DeFi platform on Terra. In fact, Anchor currently pays a 19.8% annual percentage yield for TerraUSD, an interest rate that’s orders of magnitude greater than what you might get from a savings account at a traditional bank. Similarly, the Chai payments mobile app is built on Terra, and its foundation in blockchain makes e-commerce transactions (including cross-border transactions) faster and cheaper.
Why does that matter? Terra is currently the third-largest DeFi ecosystem, with $16.2 billion invested on the platform. And as more money moves through products like Anchor and Chai, demand for Terra stablecoins will rise, driving demand for LUNA and pushing its price higher. Simply put, as products on the Terra blockchain become more popular, the LUNA token should become more valuable. That’s why this cryptocurrency looks like a smart buy right now.
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Far from a game, far from a VR variant of Zoom, far from commercial politics. It is still far from its fully realized vision. But definitely more money, and can benefit those who need it most.
Facebook changed its name to “Meta (hereinafter referred to as Meta)”, making many investors rush to the rabbit hole of Metaverse. But not only Meta, Microsoft and Nvidia are also contributing to Metaverse, and so are Disney.
Gemini invested US$400 million to compete with Zuck’s Meta, and other players such as Epic Games spent a total of more than US$4 billion to build outside Meta’s walled garden. Gemini has invested in several Metaverse builders, such as Alethea, Somnium Space, Recur, and The Sandbox ($SAND).
There is money to be made in the virtual world. After the global social changes brought about by the past two years, investors acknowledge the seriousness of Metaverse phenomenon.
Just like, a company recently purchased virtual land in Decentraland for $2.5 million, which is the largest transaction on record (discussed later). The company plans to showcase digital goods in Metaverse in response to the growing demand for digital fashion and luxury goods.
I’m not exaggerating the facts, someone recently sold a Gucci bag in Roblox, an online game platform, at a higher price than the physical bag. Morgan Stanley estimates that by 2030, Metaverse luxury goods market will reach US$50 billion (10% of the luxury goods market).
Virtual land sales and luxury NFTs are only part of a big upward trend. This trend also includes “Play-to-Earn (P2E)” and increasingly complex decentralized finance (DeFi), these strategies all happen in Metaverse, and this industry is called “GameFi”.
Before delving into GameFi, let’s try to define the “Metaverse”.
What is Metaverse?
Metaverse means too much to people. It is a virtual world where you can interact with family, friends, and colleagues. It is a place where you can get an immersive feeling that you can never experience in the physical world. Many people will strongly associate Metaverse with VRChat and Second Life in the VR world. Others assert that cryptocurrencies, DeFi, NFTs, and Web2 are all part of Metaverse (there is a big “M”). Regardless of augmented reality and the Internet of Things, we can also say that it is the whole of Metaverse.
The following definition from @pierskicks poetically covers all the basics:
“Metaverse: An eternal and vibrant digital universe that provides individuals with a sense of agency, social presence, and shared space awareness, as well as the ability to participate in a wide-ranging virtual economy with far-reaching social impact.”
If this definition is too verbose, @MarioNawfal provides a more popular version:
Anyone who has played Runescape, The Sims Online or Minecraft long enough to feel that this is their second life can imagine the meaning of the world envisioned in that tweet.
In Anthony Bardaro’s article on Disney’s final game of building Metaverse, he quoted the prolific Metaverse authority Matt Ball:
Matt believes that Metaverse includes a “fully-functional economy” that will never shut down. It will span the physical world and multiple digital worlds, with “unprecedented interoperability of data, digital projects/assets, and content”. Metaverse economy will be developed and managed by many contributors, from independent builders to DAOs to commercial enterprises.
Badalo summed up the true scale of Metaverse:
“Calling it a pure video game, virtual reality (VR) or augmented reality (AR) all underestimate the grandeur of Metaverse concept. It is not just a substitute for idle screen time, although it already covers all the basics- -From live broadcasting to entertainment, to escapism, education, information and social interaction.”
We may be a few years away from the virtual world depicted in movies such as “Ready Player One” or books such as Snow Crash (we haven’t even touched the rabbit hole of The Matrix). Nonetheless, innovations in VR, high-speed Internet, surreal game engines, and blockchain technology have developed to a level that surprised most of us.