Last year we saw the Metaverse emerge as the new cryptohype along with NFTs, but we now see many metaverse coins experiencing price declines of 50% to 80% from their all-time high. Has the metaverse reached its peak? Or is this just a period of consolidation?
Developments around Metaverse coins
The whole crypto market is fluctuating thanks to the developments of recent periods. For example, we saw the corona pandemic have a major impact on the entire financial sector and thus also the crypto market. Nevertheless, we saw the crypto market recover somewhat and analysts were hopeful that the bull run that started in 2020 would continue. But on February 24, 2022, Vladimir Putin held his speech, in which he indicated that Russia, will invade Ukraine. The crypto market was already not looking good at the time, but the uncertainty created is still being felt today, causing investors to act with fear. In addition, the inflation that has accelerated thanks to the war is not currently having a positive effect on the crypto market.
As a result of all this, we saw large metaverse projects or metaverse-related projects fall sharply after they had just gained momentum. The developments of the largest metaverse projects in a row:
Decentraland (MANA) can be called the leader of the rise of the metaverse as it has the largest market cap of all the metaverse projects. Decentraland is a decentralised platform where gamers can discover the world of Decentraland in a 3D and virtual reality environment. Decentraland is built on the Ethereum blockchain and allows players to own and build on pieces of land, create NFTs and play together with other players. The token linked to Decentraland called MANA saw its value drop by 64% from its all-time high at the time of writing.
The Sandbox (SAND) is very similar to Decentraland and is also built on the Ethereum blockchain. Users of The Sandbox can own land and build on it, as well as develop their own in-game items which they can link as NFTs to the platform's utility token called SAND. The value of SAND token has dropped by 68% from its all-time high at the time of writing.
Enjin is a token built on the Ethereum blockchain that allows developers to use Enjin to run their game on the blockchain technology. In addition to running, Enjin offers the ability to create NFTs and integrate them within your game using the Enjin API. Enjin coin is at the time of writing 68% away from its all-time high.
Axie Infinity (AXS) is a play-to-earn game which means that players earn in-game attributes by playing the game. The project is inspired by Pokémon and is a virtual animal training game built on the Ethereum blockchain. In the game it is possible to collect and trade so-called Axies and also to fight against other Axies. The Axies can also be traded as NFT on secondary marketplaces. The value of the token AXS is at the time of writing 71% away from its all-time high.
For the time being, the declines seem to be related to the fact that the entire crypto market is in bad shape. It is therefore important to think in the long term.
The Future of Metaverse
Abhijit Bose, head of Whatsapp India expressed confidence at CII's annual Global Knowledge Summit that the metaverse will play an important role in the internet of the future. He said he believes that social experiences are central to the metaverse and that the metaverse brings people together who cannot be brought together in real life. According to him, the metaverse is engaging and compelling. The vision that Abhijit shares with his organisation Meta (formerly Facebook) is a vision of ten years, but despite this, he sees few opportunities for Whatsapp to use the metaverse within its communication application. He does indicate, however, that Meta will work together with other companies and developers to promote the development of the metaverse. In the meantime, Meta has made a two-year investment of $50 million to invest in programs and external research, among other things, to find out how they can responsibly build technologies such as the metaverse.
It is a fact that companies are not just talking. We have already seen the bank JP Morgan join the Metaverse by creating a lounge in Decentraland, because they see a market potential of $1 trillion. The lounge is called Onyx lounge and can be found in the virtual environment Metaiuku in Decentraland.
Samsung has also found its way to Decentraland. They opened a replica of a real Samsung shop in New York and, like JP Morgan, see marketing opportunities. Samsung uses the virtual shop to improve customer interaction and sees this as a great opportunity during Covid-19, since many people cannot or do not want to visit physical shops during the pandemic.
It can be concluded that companies see opportunities in the metaverse and that they use the technology to promote their products and/or services or want to develop the technology further. This is a positive development for the metaverse, which, especially in the long term, can ensure that the technology will be embraced more and more.