Explained: What does money look like in the metaverse?

By Daily Crypto Investor On Jan 28, 2022

The metaverse has seen massive investments from brands, artists, creators, influencers, and celebrities. The virtual universe where you can do various activities like shop, interact with friends or even participate in events through your avatar is well on its way to becoming a fully functional virtual economy.

So, we can buy land, go shopping, set up digital stores and so on in the metaverse, but how are these transactions carried out? And what do you need to make purchases in the metaverse? Let’s find out.

Money in metaverse

Crypto wallets

It is the first and most basic requirement to make metaverse purchases. Virtual platforms like the Sandbox and Decentraland require users to have a crypto wallet before creating an account on the platform. The most popularly used wallet is MetaMask, and it can be linked with the platform of your choice. Users can add their native currency using a credit or debit card and exchange it for crypto tokens of their choice, depending on where they wish to transact.

2. NFT-based cards

The ownership of digital assets in the metaverse is represented by digital tokens called ‘Non-Fungible Tokens’. These tokens have all the relevant information about the asset coded into them and can be held in the crypto wallet. Ideally, users must create a crypto wallet, deposit fiat currency (traditional currency), and then exchange it for cryptocurrency to make an NFT purchase.

However, Mastercard and Coinbase have since simplified the process. They have entered into a partnership to create the first NFT-based card. Mastercard users can simply log on to the Coinbase NFT interface and straightaway purchase NFTs with their respective credit or debit cards.

Both partners aim to engage a larger share of crypto enthusiasts with this move and also make NFT-based transacting more secure in the process.

3. Metaverse tokens

Since metaverse platforms are built on blockchain technology, each of them needs a native cryptocurrency to facilitate transactions on the platform. Such metaverse-associated crypto coins are known as metaverse tokens.

For example, the Canadian firm Tokens.com made a $2.43 million land purchase on Decentraland for 618,000 MANA, which is the native currency of Decentraland. Similarly, Sandbox uses SAND, Blockchain-based game Axie Infinity uses AXS, etc., in the buying/selling process.

Every metaverse token can be re-exchanged for fiat currency whenever the owner wishes. Here are some of the most popular cryptocurrencies that can be used to make purchases in the metaverse:

Ether: ETH, the native currency of the Ethereum network, is one of the most used cryptocurrencies to make purchases in the metaverse. Since the ethereum blockchain is used to host decentralised applications and create NFTs, it can be used directly on platforms like Decentraland and the Sandbox for transactional purposes. ETH is currently trading around $2,427.

MANA: This native token of the Decentraland platform allows users to buy land, wearables, avatars, and other accessories on the forum. Since Decentraland is a Decentralised Autonomous Organisation (DAO), owners of the MANA token get a vote when changes are proposed on the platform. The MANA token can be purchased on most crypto exchanges and is currently trading at $2.25.

SAND: As mentioned earlier, this is the native token of the Sandbox platform and works in a similar fashion as MANA. It allows users to buy/sell assets in exchange for SAND, and it can be swapped for fiat currency as well on most crypto exchanges. It is currently trading at $3.46.

AXS: This is the token associated with the gaming platform Axie Infinity. Not only can users buy these tokens on crypto exchanges, but they can also earn them by breeding in-game pets called Axies. Each Axie is a unique NFT in itself and can be entered into virtual tournaments to compete against the others. The AXS token is currently trading at $47.4.

Metaverse platforms have opened new avenues for business. Experts at crypto giant Grayscale believe the metaverse offers businesses revenue opportunities worth $1 trillion. There is potential in advertising, hosting online events, e-commerce, and the supporting hardware industry. Organisations have shown increasing interest in metaverse projects, and they continue to do so as developers keep expanding and developing the digital universe through numerous tech innovations.

It’s only been a short while since the metaverse opened its door for business. Despite this, there have already been some really astounding, record-breaking transactions, especially in the digital real estate market. The best-known example is the record $4.3 million deal in which digital land developer Republic Realm purchased a plot on the Sandbox platform.

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(Edited by : Yashi Gupta)