By Dhruv Saxena
According to Bloomberg, global metaverse revenue is estimated to touch $800 billion in 2024. To get an idea of the scale and the profitability of the metaverse, take an example: DJ Travis Scott’s 2020 concert held in the game Fortnite netted around $20 million, including merchandise sales.
Stories like these show us the scale we can reach with metaverse content. Already an increasing number of brands are trying their best to stand out in the space and be creative as they experiment and expand in this new frontier, all hosted using web 3.0, a fascinating evolution of the internet.
Here’s looking at how metaverse and the blockchain are adding actual value to the digital economy.
- Virtual land ownership: Virtual land ownership has grown in popularity within the metaverse and there are several places for one to invest and create or acquire unique virtual digital assets. Metaverses like Decentraland and The Sandbox are ideal examples of such venues where assets like land parcels, whose ownership is verified by non-fungible tokens (NFTs), are acquired and traded by users. Investors can buy virtual plots of lands as NFTs and monetise them.
- Renting and lending: Leasing out land parcels in NFTs is another way for people and businesses to earn revenue. For example, landowners in the metaverse can rent NFTs via PARSIQ’s IQ Protocol, a decentralised finance (DeFi) platform that allows game developers to earn money. The IQ Protocol, like traditional property and real estate, enables virtual landowners to earn rent fees through predetermined conditions enforced by smart contracts.
- Play to earn within the metaverse: The concept behind play-to-earn games is straightforward: players collect digital currencies or NFTs generated by playing and participating in blockchain-based games. Once a user has acquired a NFT they can then commercialise this. The more a user participates, the more opportunities he has to earn assets, and each scarce asset has its own unique properties, making it have utility and value to others.
- Hosting events and private parties: Entertainment has always been an essential component that drives user engagement and interest, and it’s similar in the metaverse. With Covid allowing people to enjoy virtual events, metaverses have seen a rise in users paying for attending these. NFT passes, collectibles or limited edition content can generate further revenue.
- Earning royalties from NFTs: NFTs are also designed so that creators can set terms to earn royalties whenever these digital assets change hands secondary market. For example, if a 10% royalty is charged on an NFT, the original creator will receive 10% of the total sale price each time their NFT is resold to a new owner. In this way, the creator can earn a percentage of the asset’s sale price indefinitely. Given that the process is fully automated, creators do not need to enforce royalty terms or manually track the payment. Creators can set predetermined royalty percentages while minting NFTs and smart contracts to govern the entire royalty distribution process. Unlike physical collectibles (art, music and so forth) anything backed by an NFT not only provides value to its owner it can also provide ongoing royalties to the original artiste.
The author is co-founder, Fantico, & chief strategy officer, Vistas Media Capital