This article was written exclusively for Investing.com
- What Is An NFT?
- NFTs And Metaverse Are Technology Focal Points
- Decentraland (MANA)
- Axie Infinity (AXS) and Enjin (ENJ)
- The Sandbox (SAND)
Cryptocurrencies are the children or evolutionary products of the revolution in finance that was long overdue.
Technology has changed our lives over the past decades. The way we shop, communicate, work, drive and watch our health have evolved thanks to technological advances.
The world of finance took its time catching up, but the advent of blockchain technology and cryptocurrencies has been growing at lightning speed over the past decade. Indeed, Bitcoin and Ethereum, the two top cryptos by market cap, have become more mainstream assets over the past year.
In 2022, NFTs and the metaverse are two technological innovations breaking new ground. Some of the more than 16,935 cryptos floating around in cyberspace are geared towards the NFT market and the burgeoning metaverse that Facebook (NASDAQ:FB) ’s Mark Zuckerberg sees as the future of his company. He's so committed to this view he changed Facebook's name to Meta Platforms late last year.
What Is An NFT?
An NFT, or non-fungible token, is a non-interchangeable unit of data stored on a blockchain, which is a digital ledger. NFTs can be reproducible digital files, like photos, videos and audio. The NFT owner has title to the file and distribution rights.
NFTs are unique digital tokens, unlike cryptocurrencies such as Bitcoin or Ether, which are fungible, or exchangeable for another Bitcoin, Ether or cash. A reasonable analogy is that Bitcoin and Ether tokens are like dollars, euros or other means of exchange, while NFTs are like artwork, fine wines or other collectibles that are one-of-a-kind assets.
NFTs And The Metaverse Are Technology Focal Points
In early 2022, as technology evolves, NFTs and the metaverse are emerging as innovation hubs. The metaverse merges virtual, augmented and physical reality, blurring the line between human interactions online and in real life. A metaverse is a network of 3D virtual worlds that focuses on social connections.
NFTs and the metaverse are the next evolutionary technological steps that the leading tech companies have begun to embrace.
Those who grew up since the 1990s and became experts in computer gaming have a far better understanding and comfort level with cryptocurrencies, NFTs and the metaverse. But cryptos have transcended the younger generation as their incredible rise in value has attracted investors and speculators across all age groups.
NFTs represent digital ownership of a digital asset, which is a bit more challenging to grasp for baby boomers and older generations. The metaverse is one step further, as it exists in another dimension that is more science fiction than reality. However, the demand for property and other assets in the metaverse signifies an area that should not be taken for granted and written off as a fad.
When it comes to the metaverse and NFTs, four tokens embrace the trend towards the next step in technology.
Decentraland
Decentraland (MANA) is an open-source 3D virtual world platform. Users may purchase virtual plots of land in the platform as NFTs via the MANA cryptocurrency.
Decentraland opened to the public in February 2020, overseen by the non-profit Decentraland Foundation. The website describes the token as the “first-ever virtual world owned by its users.”
On Jan. 20, MANA was the 32nd leading cryptocurrency. At $2.81 per token, MANA’s market cap was at the $5.12 billion level.
Source: CoinMarketCap
The chart shows the MANA tokens began trading in September 2017 at 2.5 cents. They rose to a high of $5.4792 on Nov. 24, 2021, and are at the $2.81 level at time of writing.
MANA's pricing and position within the broader crypto market reflects the growth of NFTs and the metaverse.
Axie Infinity and Enjin
Axie Infinity (AXS) is a digital pet community whose users can purchase creatures called Axies and use them to battle, explore and breed other Axies. The token's website explains that Axie is a:
“new type of game, partially owned and operated by its players.”
Users earn AXS tokens by playing and using them to decide the game’s future.
AXS is the 36th leading cryptocurrency at $72.13 per token on Jan. 20, with a market cap of more than $4.3 billion.
Source: CoinMarketCap
As the chart shows, AXS began trading at $0.15 per token in November 2020, rose to a high of $160.36 on Nov. 6, 2021, and was trading at around $72 at time of writing. Like MANA, AXS reflects the growth of NFTs and the metaverse.
Enjin (ENJ) facilitates the use of NFTs. The token's website notes that Enjin aids in creating:
“NFTs you can use to grow your business, earn and trade, and integrate with games and apps.”
At $2.26 per token on Jan. 20, ENJ was the 61st leading cryptocurrency, with a market cap over $1.9 billion.
Source: CoinMarketCap
ENJ began trading in November 2017 at 1.7 cents per token. The crypto peaked at $4.6858 on Nov. 24 and was hovering at the $2.2 level at time of writing. ENJ is a crypto that operates as an NFT specialist.
The Sandbox
The Sandbox (SAND) is a game for mobile phones released in 2012. The website states:
“The sandbox is a virtual metaverse where players can play, build, own and monetize their virtual experiences. We empower artists, creators and players to build the platform they’ve always envisioned, providing them with the means to unleash their creativity.”
At $4.27 on Jan. 20, SAND was the 40th leading cryptocurrency with a market cap of $3.92 billion.
Source: CoinMarketCap
The chart highlights SAND began trading at 5.1 cents per token in August 2020 and reached a high of $8.4022 on Nov. 24, 2021. At $4.27 currently, SAND is another crypto that embraces NFTs and the metaverse.
With nearly 17,000 tokens in the cryptocurrency asset class, MANA, AXS, ENJ and SAND’s positions in the top 99.5% of the asset class by market cap shows that the market continues to embrace NFTs and the metaverse evolution of the technological revolution.
Meta Platforms, the world’s leading social media company with a market cap of almost $1 trillion, has made a substantial bet that the metaverse is the future. Whether you embrace the technology or not, asset prices in the NFT and metaverse sector are screaming that investors and traders should pay attention as capital flows support the burgeoning business.