Wednesday, February 1, 2023
DLTEMPIRE
  • Home
  • News
  • Blockchain
  • Ethereum
  • BNB
  • Binance
  • Luna Crash
  • Crypto Mining
  • DeFi
  • ICO
  • Regulation
  • Top 10 coins
No Result
View All Result
  • Home
  • News
  • Blockchain
  • Ethereum
  • BNB
  • Binance
  • Luna Crash
  • Crypto Mining
  • DeFi
  • ICO
  • Regulation
  • Top 10 coins
No Result
View All Result
DLTEMPIRE
No Result
View All Result
Home Luna Crash

The Metaverse and DeFi Are Destined For Different Paths. Here’s Why.

Lucinda Keatinge by Lucinda Keatinge
August 23, 2022
in Luna Crash
0
The Metaverse and DeFi Are Destined For Different Paths. Here’s Why.
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter


Opinions expressed by Entrepreneur contributors are their own.

Facebook stunned the world last October when it rebranded itself as “Meta.” With the name change, the social media behemoth that helped shape the internet over the past two decades seemed to have made the decision to ride the hype of the metaverse boom that almost hijacked the latest cryptocurrency bull run.

And Meta wasn’t the only one. Microsoft announced it would adapt its signature software products into its own corporate version of the Metaverse shortly after, as hundreds of crypto projects attached themselves to the new buzzword, adding related words such as NFTs, AR, and VR to their messaging. By the end of 2021, real estate sales in the Metaverse topped $500 million. For entrepreneurs less acquainted with the concept: yes, that means people spent millions of real U.S. dollars on clubs, nightlife venues and stadiums that only exist virtually.

Another lesser-known fact? Most companies building products centered around the Metaverse — a more fully immersive internet involving virtual and augmented reality — use blockchain as a major component. Metaverse developers incorporate key crypto-industry features, such as NFTs (non-fungible tokens) and utility tokens, to power their ecosystems.

Related: The New Wave of Web 3.0 Metaverse Innovations

To some degree, the intertwining of crypto and Metaverse makes total sense. If you’re creating a virtual space in which people can experience real-world events with other real people, such as live music shows and even wedding proposals, you’re going to need a digital-native currency to power that world’s economy. On the other hand, the association with and reliance on crypto made such startups vulnerable to the dramatic volatility of the crypto industry.

As such, they were just as affected by the crash that sent the crypto industry into a bear market in May, catalyzed by the collapse of Terra (LUNA) from $120 to 2 cents — a 99.9-percent correction — that sent shockwaves through the market. The Metaverse sub-sector of the broader crypto industry was probably hit harder than the DeFi industry (decentralized finance), of which LUNA seemed almost integral.

Just as the value of real, tangible properties skyrocketed nearly 19 percent over the last year, the average price per parcel of virtual lands across the six major Ethereum Metaverse projects dropped 85 percent in August. The agreed-upon reason for the price plunge might be waning interest. Still, there’s a macro-level trend to be aware of: Very shortly, it’s reasonable to predict that Metaverse land prices won’t recover for months or even years. Not until the next bull run drives hype around it again.

Both the Metaverse and DeFi can be considered two very different brainchildren of Bitcoin, the first-ever cryptocurrency and application of blockchain technology. Yet each will fare quite differently in this bear market. Unlike the NFTs that made up the backbone of the blockchain Metaverse industry, of which a massive swath was proven to be scams, the institutional demand for DeFi exposure remains strong.

Related: How NFTs Could Change Real Estate

In June, JP Morgan Chase‘s blockchain unit announced plans to bring trillions of dollars of tokenized assets into DeFi, also initiating “Project Guardian,” which trials institutionally compatible DeFi via liquidity pools, constituting tokenized deposits and bonds. A month before that, Wall Street giant Jane Street entered into a loan agreement with BlockTower Capital to borrow $25 million, with plans to scale it to $50 million.

But why do institutions retain an interest in DeFi while Metaverse projects and NFTs tank? Surely there are plenty of scams in DeFi, too.

It all goes back to real-world usability. While partying in a virtual world with an NFT avatar might sound like fun, people have proven to prefer the real, tangible world over any Metaverse experiences. The demand isn’t there yet, which might be because Metaverse projects need to build a better bridge between the real and virtual worlds. Until people prefer to spend time in Decentraland, they will travel to New York City and party in Brooklyn — especially now that pandemic-era restrictions are gone.

Conversely, DeFi platforms are offering investors ways to spend the yields they earn via staking on physical commodities. Take EQIFi, a regulated DeFi platform backed by EQIBank. The platform gives users various financial services, including a yield aggregator, loans and deposits. In early August, EQIFi partnered with crypto-to-retail bridge Shopping.io, which will let holders of its EQX token spend tokens they’ve staked on real-world goods at top retailers like Amazon and Walmart.

Related: 4 Ways DeFi Can Generate Passive Income

In that sense, DeFi is starting to find ways to fulfill Bitcoin’s original promise to empower the little guy to make money through decentralized protocols. It is also following through by letting him spend that money at places that matter.

As DeFi continues to open access to and expand on traditional investment vehicles, cross-chain launchpads such as Synapse Network, which jumpstarts businesses with customizable offerings ranging from anti-bot solutions to tokenomic models, will help them scale. In turn, the rate at which DeFi as an industry matures and changes everything we know about finance will accelerate.

That’s not to say the Metaverse won’t rise again or that blockchain won’t play a significant role. With major players like Meta and Microsoft actively bringing their visions to fruition, it’s almost inevitable that smaller innovators will reenter the game. The Metaverse as a use case of blockchain and NFTs is much younger than the more traditional financial applications. In the Bitcoin family, as in most families, the older child paves the way for the other siblings.

Related: The Blockchain Is Everywhere: Here’s How to Understand It



Source link

Tags: DeFiDestinedHeresmetaversePaths
Previous Post

Binance executive claims scammers made a deepfake of him

Next Post

A Primer on US Stablecoin Regulations

Lucinda Keatinge

Lucinda Keatinge

Next Post
A Primer on US Stablecoin Regulations

A Primer on US Stablecoin Regulations

  • Trending
  • Comments
  • Latest
Veteran pilot killed in vintage airplane crash in Kern County

Veteran pilot killed in vintage airplane crash in Kern County

September 3, 2022
Wells Fargo Mentioned Ripple (XRP) As A Digital Currency In August Report

Wells Fargo Mentioned Ripple (XRP) As A Digital Currency In August Report

August 16, 2022
Sold Out Presale Creating Huge Interest In Gnox (GNOX) From Binance Coin (BNB) And PancakeSwap (CAKE) Holders

Sold Out Presale Creating Huge Interest In Gnox (GNOX) From Binance Coin (BNB) And PancakeSwap (CAKE) Holders

August 16, 2022
Best Coins To Buy On PancakeSwap App In August 2022

Best Coins To Buy On PancakeSwap App In August 2022

August 12, 2022
How the Stance of World’s Top Crypto Exchange Could Impact Possibility of Future Ethereum Forks

How the Stance of World’s Top Crypto Exchange Could Impact Possibility of Future Ethereum Forks

0
Binance, Mastercard launch prepaid card in Argentina to bridge cryptocurrencies, everyday purchases

Binance, Mastercard launch prepaid card in Argentina to bridge cryptocurrencies, everyday purchases

0
What is Alpaca Finance? – Asia Crypto Today

What is Alpaca Finance? – Asia Crypto Today

0
Blockchain ETF’s Top Holding Has Been a Strong Outperformer

Blockchain ETF’s Top Holding Has Been a Strong Outperformer

0
A New digital currency that enables Private Permissionless Payments on Blockchain

A New digital currency that enables Private Permissionless Payments on Blockchain

February 1, 2023
Provident in Massachusetts pushing past crypto woes

Provident in Massachusetts pushing past crypto woes

February 1, 2023
Bitcoin, Ethereum, and Equity Markets Drop as Fed Likely to Hike … – The Coin Republic

Bitcoin, Ethereum, and Equity Markets Drop as Fed Likely to Hike … – The Coin Republic

February 1, 2023
BNB Bowl 2023 lineup (Pain of Truth, Death Threat, Bulldoze, Merauder, End It, All Out War & more)

BNB Bowl 2023 lineup (Pain of Truth, Death Threat, Bulldoze, Merauder, End It, All Out War & more)

February 1, 2023

Recent News

A New digital currency that enables Private Permissionless Payments on Blockchain

A New digital currency that enables Private Permissionless Payments on Blockchain

February 1, 2023
Provident in Massachusetts pushing past crypto woes

Provident in Massachusetts pushing past crypto woes

February 1, 2023
Bitcoin, Ethereum, and Equity Markets Drop as Fed Likely to Hike … – The Coin Republic

Bitcoin, Ethereum, and Equity Markets Drop as Fed Likely to Hike … – The Coin Republic

February 1, 2023
BNB Bowl 2023 lineup (Pain of Truth, Death Threat, Bulldoze, Merauder, End It, All Out War & more)

BNB Bowl 2023 lineup (Pain of Truth, Death Threat, Bulldoze, Merauder, End It, All Out War & more)

February 1, 2023

Recent News

A New digital currency that enables Private Permissionless Payments on Blockchain

A New digital currency that enables Private Permissionless Payments on Blockchain

February 1, 2023
Provident in Massachusetts pushing past crypto woes

Provident in Massachusetts pushing past crypto woes

February 1, 2023

Categories

  • Altcoin
  • Artificial Intelligence
  • Binance
  • Blockchain
  • BNB
  • Business
  • Crypto Mining
  • DeFi
  • Education
  • Ethereum
  • Featured
  • ICO
  • Luna Crash
  • Metaverse
  • News
  • Regulation
  • Top 10 coins
  • Uncategorized

Follow Us

Follow Us

Find Via Tags

Big Binance Bitcoin Blockchain BNB BTC Buy Cardano CEO Chain Coin CoinDesk Coins crash Crypto Cryptocurrency DeFi Digital Dogecoin ETH Ethereum Exchange eyes Finance FTX Heres Investors latest LUNA Market Merge Million mining Network News NFT Prediction Price Protocol Regulation Solana Token Top Tweet Week

© 2021 Dltempire

No Result
View All Result
  • Home
  • News
  • Blockchain
  • Ethereum
  • BNB
  • Binance
  • Luna Crash
  • Crypto Mining
  • DeFi
  • ICO
  • Regulation
  • Top 10 coins

© 2021 Dltempire