Top Tips to Invest in the Metaverse
I am writing this article, as lately I have been pondering deeply how the Metaverse will exist. More so, not just exist, but thrive!!!
You may be reading this article and be a little curious about what the Metaverse even is? Well what better place to go, to get the answers to life's most difficult questions than Wikipedia.
I found the below answer for the Metaverse on Wikipedia.
A good description for the Metaverse, is the place where we bring our offline world online and if we are to believe that the Metaverse will be a network of virtual worlds based on social connections and interactions, then blockchain could be the key intermediary to facilitate this adventure into this brave new world, or worlds for that fact.
Recently we have seen the release of blockchain gaming projects like the Sandbox. This I guess you could say is a Metaverse, or one iteration of many possible Metaverses to come. We have earlier iterations, such as Decentraland to add to this list as well.
Now in these Metaverses you can purchase land and build on top of that land, similar to what we do in society today. These Metaverses also have currencies, SAND and MANA. These currencies are cryptocurrencies and are able to be traded for NFT’s which represent items you are able to use within these metaverses. These NFT’s can be a shop, or concert venue that you can use to sell items, or meet your friends at and watch one of your favourite performers.
Now just like the real world which we live in, these items could be considered appreciating assets or depreciating assets. Assets being something that can go up in value and liabilities are things that go down in value.
The assets in these worlds are bringing a lot of interest from investors, myself included and that is what has sent me on a deep dive into how this is all going to work out.
I have been investing in these assets over the last couple of years. Some with great success and others not so much! And as these metaverses develop and others come onto the market, it has become super important for me to know how to identify which ones are worth investing in.
I am going to list some key areas that I think are crucial to the success of these Metaverses and write some upcoming articles that dive a lot deeper into these areas.
The key areas are as follows:
Are these metaverses fun to interact in?
Probably the most important concept to get your head around. Do you choose a holiday destination because it is incredibly boring to spend time there? No, you chose to go somewhere because it is fun and exciting. If you created a video game that is boring to play and does not incentivise you to keep playing eventually you will stop playing, sooner rather than later. You are not going to want to invest your hard earned money or time continually into this game and the same goes with a Metaverse.
You need to build social connections within these metaverses. Can you meet up with friends there? Would your friends want to meet you there? The time you spend in these metaverses needs to be fun to the point at which other people will hear about this and want to join in.
This is one of the most important considerations. Will you want to spend time and money in this Metaverse? The more addictive the more people will want to go there.
Do the native cryptocurrencies facilitate growth in assets or depreciate with time?
This is an interesting consideration. If you are an early investor in the Metaverse, you are wanting to see your investment grow with time. There are fundamentals at play here.
Is there scarcity within the assets in these Metaverses?
Because if the developers keep on producing these assets within the Metaverse they will have a hard time going up in value, unless we go back to my first consideration. Supply vs demand is very important.
Do the assets have utility?
This means that there is a valuable use case for owning these assets. A good example of this is the concert venue I mentioned earlier. If you can charge people to come to your concerts, then you can make money from your initial investment. Much like in the real world. The more money you can make from this asset the more money you can sell it for.
Is the land an important assets to own, would it generate me an income and would other people want to buy it off me in the future?
As mentioned earlier. Land can produce you a profit. You need to consider this when purchasing the land. Much like in the real world, this is really important. I have seen games offering land for sale, that gives you in-game skins. These skins do not have any utility other than changing the appearance of your avatar.
This is probably not a great justification for buying land. I would not completely rule it out if people are really going to desire these skins, because you would be able to sell those skins at a profit. But if the skins are not that important than owning that land is not that useful.
Do the teams behind these metaverses develop and update quickly and successfully?
This is incredibly important. To make a great point here I want to mention. Alien Worlds. This game has not made any real developments since its inception and although its concept is amazing it will most likely perish.
It is not fun to play. It is incredibly boring for that fact and other projects will leave Alien Worlds in the dust. But you look at Splinterlands it is developing at a good speed and its fun to play, but not fun enough that it doesn’t need to keep making improvements and that is what the team is steadily doing, building the gameplay and making updates.
So there you have it, my top tips for investing in the metaverse.
What do you think?
Have I missed anything?
Leave me a comment?