How NFTs Create Value in the Metaverse
If you’re reading this, you probably know that investors can buy NFTs in the hopes that they appreciate in value and then sell them at a profit. You probably also know that artists and other creators use them to validate the authenticity and ownership of their work.
But NFTs are the foundation of the metaverse too, and that’s where the most exciting opportunities to monetize are emerging. The metaverse, itself, is still just emerging, so it’s not too late to get in on the ground floor as an NFT-based land owner, landlord, lender, builder, developer or promoter. Let’s explore the value in doing so.
Mark Twain once said, “Buy land. They’re not making it anymore.” Twain couldn’t have predicted the metaverse, but his wisdom still holds up.
Just as in the physical world, land ownership denotes wealth in the digital realm. For example, parcels of real estate in The Sandbox metaverse are called LANDs.
When you buy one, you don’t get a deed, you receive an NFT that records your ownership of that little slice of the digital world. According to Medium, each LAND is an NFT on the Ethereum blockchain representing a 96×96 meter parcel on The Sandbox map.
Just as in Twain’s tidbit, metaverse land is finite. The map that makes up The Sandbox metaverse will never contain more than 166,464 LANDS.
That’s 166,464 NFTs, each representing exclusive ownership of the metaverse’s equivalent of a parcel of property.
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Why Own Land if Not To Develop It?
LANDs are the building blocks of The Sandbox metaverse. If you acquire enough LANDs, you can combine them into estates, each complete with any variety of potentially income-generating assets.
Whether you own individual LANDS or entire estates, you can build on them with user-generated content (UGC). That includes entity assets like trees, bridges or animals, and equipment assets like weapons, gear or other accessories that avatars can wear or carry.
Just as with land, NFTs denote ownership of assets. To buy or sell them, you buy or sell their corresponding NFTs. Once you own a piece of the metaverse populated with assets, you can monetize your holdings by charging people to visit your LAND, partake in your amenities or events, or play games that you host.
You could also make money by selling your LAND at a markup after you develop and customize it, kind of like the metaverse’s version of flipping real estate.
That, of course, is just a rundown of life as an NFT kingpin in The Sandbox, which is only one of several metaverse platforms. Each has its own land units, assets and regulations, but they all have one thing in common — NFTs are the foundation of the metaverse economy.
Earn Passive Income by Renting Your NFTs to Gamers in Need
Play-to-earn (P2E) gamers create or modify the assets in the metaverse to earn valuable NFTs as a reward. That’s why those assets are known as user-generated content. The problem is that to start making money, P2E gamers have to pay big money upfront — sometimes thousands of dollars — to buy the NFTs needed to meet the game’s minimum asset requirements.
Many of them simply don’t have the cash to get started.
If you’ve established yourself as a land-owning player in the metaverse, you can rent your NFTs to those eager but underfunded gamers to buy their way into the game. In exchange, you get a cut of their future earnings — and you never cede ownership of your NFTs.
Axie Infinity players in the Philippines started the NFT rental trend when the game went gangbusters in 2021. In the metaverse, these rentals are called “scholarships,” and “scholars” can build and improve assets on land you own — thereby increasing your metaverse property value — while they pay you a percentage of their earnings for the rental.
Emerging Ways To Make NFTs Pay in the Metaverse
According to CoinDesk, some exciting NFT trends are gaining traction in the metaverse, including:
- Yield-generating NFTs: Create passive income by issuing NFTs as governance tokens, which give holders voting rights in the development of blockchain projects.
- Residual dividends: NFT owners can earn royalties on their holdings. For example, an NFT that represents a digital race track in the metaverse could earn its owner a percentage of every race that takes place on it.
- Social events and private parties: Rapper and NFT diehard Snoop Dogg sold NFTs as passes to a private party he hosted in The Sandbox metaverse. Only 650 of the 1,000 NFTs he issued were made available on The Sandbox marketplace, and one of them held a secret prize. Snoop himself would perform on the LAND of the person with the winning NFT, who could then, presumably, monetize Snoop’s appearance on his or her own digital property.
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