Theme 4: NFT and Metaverse in 2022

2022 Snapshots Theme 4: NFT and Metaverse in 2022

▪ New NFT use cases and partnerships will empower metaverse companies to create new user experiences and contents.

▪ Connected metaverses are being built to allow players to move around metaverses while keeping their digital assets.

▪ 2022 will see legal debates around NFTs and metaverse. NFTs (decentralized in nature) challenge the traditional ownership conception in IP laws that are territorial and based on physical products.

1tr

Metaverse future revenue opportunity (US$)

Core thesis

The metaverse is an irreversible thematic tailwind gaining traction among users and corporations. Metaverses allow users to create a digital identity to interact in the new gaming universe and empower corporations to reach new consumer demographics. NFTs, which are digital representations of digital or physical objects, have moved rapidly to become building blocks of the metaverse.

30bn

Market cap of web3 metaverse companies (US$)

Significance and Disruptive Impacts

The still-nascent market for NFTs has massive upside. New use cases and economic models will continue to reshape core concepts such as identity, asset ownership and security. NFTs can drive greater engagement and align incentives for the creators and community, increasing transparency and liquidity.

The metaverse will disrupt multiple industries – the technology is still at an early stage of development, and more use cases in different sectors are being discovered.

Expectation for 2022

1. “Flippening” events in NFTs and Metaverse The onset of Covid has made in-person communication difficult and caused people to gravitate towards virtual experiences. When (if ever) will it reach the tipping point that experiences in the Metaverse will “flip” those in the real economy? (See Interview with Alex Kent, TPS Capitaland Interview with Bowie Lau, True Global Ventures)

2. Battle between metaverses There will be a battle between crypto-native metaverses and those created by centralized gaming and corporate entities. With increased competition comes more innovation from centralized and decentralized players. (See Interview with Sébastien Borget, The Sandbox, Interview with Kevin Loo, New Vision)

23.9b

Total trading volume across Top 10 NFTs marketplaces (US$, 2021) 3. Partnerships and technologies will give rise to more immersive experiences Partnerships between metaverse companies and those of other industries will create new experiences and content for users via NFTs. (See Interview with Zaf Chow, Animoca Brands, Interview with Sébastien Borget, The Sandbox, and Interview with Sean Zhang, Talon Esports) Metaverses require robust infrastructure for high performance. Advancements in key enabling technologies – 5G, IoT, AR/VR – will come together to power the metaverse.

4. Community is king in NFT and metaverse The community will continue to play a pivotal role in helping projects grow and scale, particularly for the experiential side of digital assets. (See Interview with Alex Kent, TPS Capital, Interview with Bowie Lau, True Global Ventures, Interview with Zaf Chow, Animoca Brands

5. NFT use cases and business models to grow exponentially Metaverse will open up more applications in shopping, health, education, music, entertainment and travel. 2022 will see further experimentation of new NFT use cases by creators and corporations. Corporations will incorporate NFTs and metaverse into their marketing campaign and digital strategy. (See Interview with Zaf Chow, Animoca Brands, Interview with Bowie Lau, True Global Ventures, Interview with Sean Zhang, Talon Esports, 6. Interview with Nicholas Chan, Refinable)

7. Interoperability of metaverses Connected metaverses are being built to allow players to move around metaverses while keeping their digital assets. (See Interview with Sean Zhang, Talon Esports, Interview with Zaf Chow, Animoca Brands)

8. Regulatory debates and litigation around NFT and metaverse 2022 will see legal debates around NFTs and metaverse. NFTs (decentralized in nature) challenge the traditional ownership conception in IP laws that are territorial and based on physical products.