Importance of Metaverse, NFT, and DeFi in the blockchain world

Over the past few years, we have seen Metaverse, NFT (non-fungible tokens), and DeFi (Decentralized Finance) popping up everywhere, and gaining traction. NFT, Metaverse, and DeFi come with various use cases in the real world, so naturally, you must be curious about their applications. All three entities have unique benefits while sharing and contributing to each other’s growth. 

An Overview

Metaverse is a virtual world for immersive experiences where people around the world can meet, watch, play and trade. It is a concept of a persistent, online, 3D universe that combines multiple virtual spaces. They have predicted it to be a future iteration of the internet. The metaverse will essentially allow users to meet, work, play games, and socialize with each other in these 3D spaces. 

Experts are also optimistic about decentralized finance (DeFi), which provides financial instruments without counting on intermediaries such as brokerages, exchanges, or banks by using smart contracts on the blockchain. It includes earning interest, borrowing, lending, buying insurance, and trading by-products or assets. DeFi currently is at the developing stage where the companies are growing big in this space and are watching closely for new solutions appearing and getting adopted by the masses. 

NFTs can be anything in a digitized format with the value attached to them; that will depend on how unique they are. NFT is the budding part of the Crypto market. With the escalating number of users and ever-growing infrastructure of Web 3.0, real-world concerns such as digital asset validation and copyright claims will be less of a problem in the future.  

Let’s look at the importance of NFT, Metaverse, and DeFi and their real-world applications in detail to explain their role in the Blockchain world: 

NFT (Non-Fungible Tokens)

NFTs or non-fungible tokens are more than just a way to trade and buy digital art.  Fashion labels and corporations have started to promote themselves by distributing their NFT and have a wide range of real-world applications. NFT functions as a means to exchange everything from social media posts to celebrity assets while still taking care of the original authorship of the product.  NFTs have also led a new transformation in the gaming industry.  In the current scenario, games can assist users in obtaining NFTs, which can be sold afterward for higher market prices. Gaming assets within the Metaverse assets can also be traded as non-fungible tokens with the help of Meta verse coins. 

The importance of NFT in 2022

Irrespective of conflicting opinions about NFTs, they are a reliable tool for redefining the methods through which users will interact with the web. Moreover, the NFT trend also showcases their potential impact on buying and selling art or creating and listening to music. Below are some notable trends which might dominate the NFT space in 2022. 

NFT in gaming

One of the leading NFT predictions for 2022 would be the growth of NFTs as a tool for utilities, rather than just advertising art. NFT online gaming would grow more in the gaming sector and allow access to rare communities, typically associated with marketing for Web 3.0 and avatar casting.

Music and NFTs

Another noteworthy highlight for NFTs in 2022 would be the reduced gap between NFTs and music adoption. NFTs are all set to work their influence on the music world. Incidentally, the former Twitter CEO, Jack Dorsey, turned to Block for launching music NFTs on streaming services.

NFT and digital tagging 

The advantages of NFTs for verifying ownership are also a big NFT prediction for 2022. Currently, NFT provides creators and artists the assurance of verifiable ownership of their content. However, the future is going to have almost everything associated with NFT. Tagging objects with NFTs will serve as digital footprints in determining the ownership of the objects. 

Metaverse

The Metaverse is aiming toward becoming a fully immersive virtual reality environment. Virtual avatars will steer this digital environment more interactively. It will let users socialize in ways other than just sharing photos and texts. The tech sector has made it clear that Metaverse is not just a craze but the way humans connect in the future and initiate transactions in various sectors. 

With Metaverse, you can do everything from pre-screening real estate properties in virtual reality to purchasing the property using tokens. So while it is still in its early development stage, businesses have already given the green light to invest in it. Now, metaverse coins are the next big thing. Coins like MANA, SAND, and THETA are increasing in popularity because they hold the potential to change how we can interact and engage within the walls of the Metaverse. They represent transactional entities that can also be used for trading in virtual marketplaces in the Metaverse.  

The state of Metaverse in 2022

The odds for Metaverse in 2022 appear rather promising,  especially with companies like Facebook and Epic Games putting billions of dollars into developing the Metaverse. As companies get ready to comprehend the Metaverse and how it will come along, the Metaverse trends for 2022 can indicate how it will evolve in the short term. 

Metaverse coins

A promising highlight in the Metaverse prediction for this year is related to using Metaverse coins. Large-scale companies would gravitate more toward metaverse projects in 2022, so there will be a rise in possibilities for using coins in the Metaverse. At present, almost 100 new coin projects will be available in 2022 and supplement the existing leaders such as SAND, MANA, and AXS.

Fashion and Metaverse 

A well-known international fashion retailer, H&M opened its virtual store in the Metaverse. H&M assembled a store in the virtual city called “CEEK” in the Metaverse and let customers shop in the Metaverse. There are CEEK coins that buyers can use for shopping in the Metaverse store of H&M. Thus, Metaverse predictions for 2022 might reflect highly on the rise in such cases of the Metaverse.

DeFi (Decentralized finance)

Decentralized finance, also known as DeFi, uses cryptocurrencies and blockchain to manage financial transactions. DeFi's goal is to democratize finance by replacing legacy, centralized institutions with peer-to-peer relationships that can provide a full range of financial services from standard banking, loans, and mortgages to complex contractual relationships and asset trading.

To use Metaverse tokens or coins, you have to purchase them first. It's made possible by going around the loop of bank intermediaries or Fiat currencies. However, this will defeat the whole purpose of the trading mechanism through Decentralization. That is how Decentralized Finance comes into the picture.

DeFi is making its way into a range of simple and complex financial transactions. It is fueled by Decentralized apps (Dapps) or other programs called protocols. Dapps and protocols initiate transactions with two major cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH). While Bitcoin is more popular among the masses, Ethereum is more practical while adapting to a wide variety of uses, which means Dapp and protocol landscape uses Ethereum-based code. You can also purchase and sell Metaverse coins with the help of smart contracts and  P2P transactions. 

The state of DeFi in 2022

In a broad definition, you can see NFTs and Metaverse are closely related. So how does DeFi fit into all this? If Metaverse provides the environment and the importance of NFT is providing the tokens for interacting with it, then DeFi acts as the infrastructure for financial transactions. DeFi is likely to transform the crypto space, and having $236 billion worth of assets locked in DeFi protocols establishes its significance. Some noteworthy DeFi predictions for the year 2022 are:

Moving towards DeFi regulations

A striking trend for DeFi in 2022 would focus on one of the prominent obstacles in DeFi adoption. Companies and investors are concerned about the uncertainty of regulation and compliance with DeFi. But DeFi is going to introduce many new upgrades related to regulation and compliance this year. For instance, wallets and DeFi solutions with in-built KYC and international legislation checks can improve institutional exposure to DeFi.

Digitization of assets 

The speedy adoption of Web 3.0 trends by people and markets would expedite the merging of digital assets with conventional forms of finance. As an outcome, DeFi trends this year are most likely to redefine the financial market and value chains for unlocking more value. The benefits of decentralized protocols and distributed architecture are clear for issuers, especially in growth capital.

How do we help you navigate the blockchain world?

The outline of NFT trends mentioned in the article and the state of the metaverse and DeFi for 2022 show promising prospects. It also comes with various underlying challenges that will emerge in the journey of NFT, DeFi, and the metaverse in 2022. A lot of challenges will come along the way, but ultimately, the adoption of all these technologies in the blockchain world is taking place.

Logic Simplified is our game development company, by us on your side, it is not a long road. Take advantage of the features of blockchain technology such as immutability, decentralization, and transparency with our reliable and future-ready blockchain solutions and services. Our offerings include blockchain technology consulting, NFT marketplace development, Metaverse development, tokenization, and more. Get started and contact us or email at enquiry@logicsimplified.com if you are looking for experts to take your first steps toward blockchain technology.