The concept of blockchains first saw a real-world application in the late 2000s when the legendary Bitcoin appeared out of nowhere. From there, we have witnessed a lot of rises and falls in terms of innovations that received the green light from the so-called Web3 community. “People” became the new focus from “Data” that had yielded trillions for Web2 corporate giants. Everything soon found an alternative in the people-centric Web3 – real or conceptual – making it the haven for novel ideators to realize their long-forgotten dreams. But is MetaFi such a long-forgotten dream? Or is it another combination of emerging Web3 sectors? Before knowing that, we need to know some vital details.
Metaverses: An Explainer
As we know, metaverses are virtual worlds where people can socialize with each other digitally. Blockchains host these worlds and the assets used in them, while other technologies, such as AR and VR, help people access metaverses. Other Web3 elements assist in making metaverses as real-world-like as possible, complemented by extensive data analytics. But, wait! Metaverses are not just about having fun; they are about having lives in the digital realm. People can conduct virtual businesses that can have the world as their target base, meaning that the reach will be higher. Decentraland and The Sandbox are notable examples.
DeFi: A Defiant of the Tradition
Decentralized Finance (shortened as DeFi) refers to all financial operations performed using blockchain technology without intermediaries. DeFi’s relevance has been largely felt in recent times as traditional economic systems look like they would collapse anytime soon. Adding crypto adoption legally by many countries only supplements the statement. Today, one can perform almost any financial operation using DeFi. Lending, borrowing, collateralizing, staking, and insurance, are a few to name. While speaking of DeFi, one should note that it varies drastically from popular crypto exchanges and banks stepping into the crypto world, as they tend to show some degree of centralization.
MetaFi: A New Revelation?
While MetaFi (expanded as Metaverse Finance) might look like a futuristic name, the concept is very novel as there is a lot more left before we could even step there. Loosely, we can assert MetaFi as the decentralized financial operations performed inside metaverses. Such a concept would only be viable (even for testing) when a sizable proportion of the global population already has digital avatars living parallel, albeit virtual lives. Also, there are a lot of sub-elements to be considered before drawing the borders for MetaFi, which we will see in detail in the below section.
Elements of MetaFi
- GameFi concentrates on incentivizing gamers with real-world rewards for playing games. Various mechanisms such as Play-to-Earn (P2E), Move-to-Earn (M2E), and NFT rentals have become popular in recent times. These games can be played similarly to Web2 games or using exclusive devices such as VR headsets and haptic gloves to give a sense of virtual reality.
- SocialFi is based on maintaining a thriving creator economy where creators are at the helm without the help of intermediaries (who typically enjoy the most benefits). This element of metaverse finance has assisted numerous small businesses and creators to earn fortunes that were witnessed during the 2021 NFT boom.
- Metaverse Real Estate has become a booming business trend post the NFT boom as user influx to these worlds increased. Companies started selling land parcels in Decentraland and The Sandbox as third-party resellers, while individuals bought virtual plots directly as investments. Some began their own businesses on their land parcels, while others rented their property to entrepreneurs who wanted to make the most out of the emerging Web3 domain.
MetaFi: The Structure for Successful Execution
In order for MetaFi to gain success as a feasible economic trend, there are a few building blocks that need to unite before it can be executed.
- Foundations play the hosting role in MetaFi as it works only if an L1, L2, or L3 solution provides support. It is essential to embed functions in the framework in order for MetaFi to be usable for commercial transactions.
- DeFi is the main pillar of MetaFi that assists financial operations to be performed inside metaverses. Transactions are as simple as providing NFTs as collateral for loans to complex ones that combine all sub-elements of MetaFi.
- Verses are the virtual parallel worlds from where MetaFi-based applications can be accessed by users. Due to the numerous choices for blockchains out there for verses to exist in today’s Web3 space, it is important to choose wisely per business needs.
What Should I Do Now?
Thus, if you are inspired by MetaFi, and you want to make your new Web3 venture based on the concept, it is the right time to do so, as the domain is still in development, and early birds have always reaped massive benefits. Blockchain App Factory’s expertise in metaverse development and DeFi platform development helps our firm to craft masterful MetaFi business platforms where the future will thrive.
- 7+ Years of Experience in Web3
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With such experience, you no need to worry about developing a MetaFi platform with our experts. Contact us now to start being part of the newest Web3 domain.