- Consumers spent a whopping $41 billion on non-fungible tokens (NFTs) in 2021.
- The metaverse could be a multitrillion-dollar industry a decade from now.
Non-fungible tokens (NFTs) are crypto assets that make it possible to bring items like artwork, video games, and other assets (both real and digital) onto a blockchain. That utility has captivated investors. Consumers spent approximately $41 billion on NFTs in 2021, according to blockchain data provider Chainalysis.
Similarly, the metaverse promises to be the next big technology platform, a network of immersive virtual worlds that will blend elements of entertainment, gaming, and commerce, allowing users to engage each other and the environment. And NFTs fit perfectly into that technology. They make it possible to prove ownership and the authenticity of assets, which will be critical in the metaverse economy.
With that in mind, many analysts believe the metaverse will become a multitrillion-dollar industry over the next decade, which could supercharge consumer demand for NFTs. For investors looking to cash in on those trends, several cryptocurrencies fit the bill perfectly. Here are two great examples.
Image source: Getty Images.
Decentraland (CRYPTO:MANA) is a decentralized application (dApp) on the Ethereum blockchain. It features a virtual world inhabited by gamers and powered by the MANA token. Players can buy and sell parcels of digital land through the marketplace, each with unique coordinates, and wearable items like clothing, accessories, and body features for their avatars. In all cases, transactions are funded with MANA, and ownership of any item is represented as an NFT.
Players can also develop and monetize their digital land with 3D content, games, and other applications, and they can interact with other avatars across the virtual world. In short, Decentraland is a sort of precursor to what the metaverse could be — it’s easy to imagine the platform as part of a larger network of virtual worlds in the future. But there is plenty to be excited about now. Decentraland currently ranks as the third-most-popular NFT collection in terms of transaction volume on OpenSea, which itself is the world’s most popular NFT marketplace by a wide margin.
As users become increasingly enamored of Decentraland — which seems likely given the enthusiasm surrounding NFTs and the metaverse — demand for MANA should rise. With a fixed supply of 2.6 billion tokens, rising demand should drive the price higher. That’s why this cryptocurrency could be a good long-term investment, especially now that it’s fallen more than 60% from its high.
2. The Sandbox
The Sandbox (CRYPTO:SAND) is another Ethereum-based metaverse game featuring NFTs. The platform is powered by the SAND token, and it comprises three distinct services that allow players to build and monetize in-game assets and experiences.
Specifically, VoxEdit is a modeling tool that allows users to create and animate 3D objects like people, animals, and scenery. Those objects are represented as NFTs on Ethereum. Next, the NFT marketplace allows users to buy and sell those 3D objects using the SAND token. Each block of land is also represented as an NFT, and those tokens can be used for transactions in the marketplace. Finally, the Game Maker product enables users to build monetizable games and experiences on their land without using computer code. More specifically, it’s a suite of drag-and-drop tools used to position 3D objects and implement gameplay mechanics.
Like Decentraland, The Sandbox has generated significant interest in the crypto community, and it ranks as the eighth-most-popular NFT collection on OpenSea in the past month. And given the easy-to-use interface, not to mention the tailwinds behind NFTs and the metaverse, The Sandbox is well-positioned to attract more players in the years ahead. As that happens, demand for SAND — which has a finite supply of 3 billion tokens — should rise, pushing its price higher. With the price of SAND down roughly 60% from its high, now looks like a good time to add this digital asset to your portfolio.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool owns and recommends Ethereum. The Motley Fool has a disclosure policy.