With the crypto and blockchain markets having matured significantly, attention is being placed on the rapidly evolving non-fungible token (NFT) and Metaverse. NFTs are becoming a major part of Web3, and the Metaverse is steadily increasing in popularity for both consumers and companies.
It’s said NFTs are the engines to drive the Metaverse, so the two are closely linked. The UAE is living up to its reputation as one of the earliest tech adopters in these fields as well. The number of people owning NFTs is more than double the worldwide average and the country is set to become a major player in the Metaverse.
But what’s happening now for NFTs and the Metaverse, and which direction are we headed in?
Exponential rise in NFTs
NFT transaction volumes, users and active collections all soared through 2021, earning the term NFT the coveted title as Collins Dictionary’s ‘word of the year’. And this momentum continues with the Chainalysis State of Web3 report finding that collectors sent over $37 billion to NFT marketplaces between January to May this year. This means they’re on track to outstrip 2021’s total of $40 billion.
There are generally peaks and troughs in NFT activity, with marketplaces undergoing periods of growth, downturns and recoveries, often due to global trends and levels of user demand.
NFTs and the Metaverse
With NFTs, people can own digital assets like images, audio, and video, and can sell, buy, and transfer items. Within the Metaverse, it’s even possible to own virtual real estate. Many brands, gamers and individuals are already treating the Metaverse as a lived reality, which is being reflected in the price for virtual real estate. Blockchain-based virtual real estate prices grew by 879 per cent from September 2019 to March 2022, while real estate prices grew by 39 per cent.
In the UAE, brands have been quick to embrace the Metaverse, backed by government initiatives such as the Dubai Metaverse Strategy, which aims to increase the contribution of the Metaverse sector to Dubai’s economy to $4 billion by 2030 and increase its contribution to Dubai’s GDP to 1 per cent. Etihad Airways is also releasing their first non-fungible token (NFT) collection, EY-ZERO1.
The collection of 2,003 limited-edition collectables includes Etihad’s Manchester City FC and offers a number of travel and lifestyle benefits. And Dubai’s stunning Museum of the Future is collaborating with Binance NFT to develop a range of virtual assets, with the first NFT drop expected in the coming weeks.
The Metaverse is an emerging space, so the long-term price of virtual real estate relies on current and potential utilities, like accessing exclusive communities and events. So far, this has been a major driver of NFT demand, and the current signs are that it’s crossing into virtual real estate sales.
