Metaverse, NFTs, and Web3 are buzzwords we hear often in the blockchain space. From an investment standpoint, it can be difficult to gauge the difference between hype and benefit. Similarly, the retail industry and its customers are finding such terms equally confusing as brands and businesses move towards this new frontier of digital marketing, development and consumer connectivity. Investors and businesses alike must understand the capabilities of these innovative and emerging markets in a simple and straightforward way.
Day 1 of the BSV Global Blockchain Convention in Dubai showcased a panel moderated by CNBC Arabia Anchor Hussein Sayed. This panel approached the growing interest among brands, retail businesses, institutional investors and general consumers regarding Web3 development, NFTs and blockchain. As time goes on, such areas of technology can no longer be ignored by many industries and forward-thinking companies.
The speakers of the panel are Rami Malouf, partner of SNGLR Group, a team of technology entrepreneurs specializing in strategic consulting for exponential technologies; Phil Runyan, co-founder of NiftyCo a think tank accelerator supporting web 3 adoption; Lena Nussbaum, Founder and CEO of Yes My Love, a German high-end fashion brand based entirely on the online space; and Lou Yu, head of KuCoin Labs, is focusing on investing in innovative companies using metadatabase and web 3 applications.
Forward-thinking businesses turn to web 3
Many retail brands have developed concise business models that focus on social media interaction and online store creation in the traditional web 2 framework.
Nussbaum explains the fashion label Yes, darling relies solely on the digital online space as the store is fully online with no physical outlets. Nussbaum sees the early interest in metaverse, web3 and NFT adoption as a logical step forward for his digital brand. Nussbaum envisions pop-up stores of his store within metadata environments alongside digitally powered clones of physical clothing designs. The simple adoption of timestamped NFT authentication of its brand’s clothing on the blockchain is a big step forward in its field. Yes my love its customer base is traditional consumers with little understanding of gaming or web3 technology.
Runyan, co-founder of NiftyCo, comes from an industry background in the gaming industry and sees web 3 application in the online gaming space as a way for consumers to own digital assets, providing more value and agency to the end user. This is a stark comparison to today’s status quo, where businesses own assets that consumers buy on their platforms. A business can easily revoke access to or ownership of valuable user assets. Non-custodial, blockchain-based ownership can combat centralized asset control and provide greater consumer autonomy over their digital assets.
Malouf, a partner of the SNGLR Group, explains that over the past few years many businesses have approached him because of his interest in NFT and the metaverse. Entertainment and retail businesses are steadily approaching consultants who question how these new apps will impact their brands and how they can be used to better engage with their customers. Asking about the emerging industry, Malouf explains that his clients are forward-looking, possibly future-proofing their business model for the next decade.
Similarly, forward-thinking governments like the UAE government are starting to see the transformative nature of this technology. This type of technology could shape how public services are delivered to citizens and enable public and private businesses to thrive in the virtual space.
“Some governments are trying to stay ahead of the curve in terms of creating regulatory sandboxes to ensure the safe growth of startups and innovators,” Malouf said.
Investor Interest in Metaverse Application
KuCoin Labs was founded as a metadatabase fund and branch of the popular exchange. It was also one of the first businesses to work with NFT and metaverse projects starting in 2019. Institutional investment interest has grown since then, with metaverse platforms and popular NFT collections at the forefront of investment reviews.
Yu, head of KuCoin Labs, explains his long-term vision for bold initiatives moving towards important metaverse projects.
“Right now we have a lot of proof-of-concepts. But we still need to get down to infrastructures…For example, we look at SDKs for metadata transfers because many people can’t build everything from scratch. SDKs include developer work, game creation, NFT projects, avatars and item It will make it easier to get started,” says Yu. These tools are essential for metastore adoption and investment analysis. Yu says that KuCoin Labs will focus its attention on this point in the hopes of accompanying some ambitious projects in the next three to five years.
For retail investors, Yu sees nearby AR/VR metaverse projects as a viable area to consider while considering the broader web 3 space alongside existing NFT uses such as avatars and art collections.
Runyan sees companies that want to democratize access to NFT space through accessibility for all as future pioneers of the web3 space. The current state of Web 3 does not yet appeal to multiple demographics. Most are limited to a select few in the ‘crypto boy club’.
“It was done by design so that everyone wouldn’t be in it… The more we gain access to this industry, the more consistent numbers we’ll start to see emerge. We won’t see these crazy fluctuations that make every project feel like a speculative asset.” said Runian.
Malouf envisions a number of new business models that will emerge in metaverse environments. Such models, in turn, will establish a self-sustainable economy on metadatabase platforms. This is a longer term investment consideration that will be easier to evaluate as we continue to see developers and businesses build directly on top of the metastore layer.
“Developers of virtual real estate, architects of metadata, companies that provide financial services in metadata… Many of these types of business models that see metadata as a new economy are just another layer of how investors can look at metadata.” said Malouf.
NFT utility and cross-chain bridging considerations
If we ignore the enormous hype and inflated prices surrounding the sales and resale of NFT art in the last 12 months, we are left with the question of the utility surrounding the true functionality of NFTs in an immutable ledger. For what real world application can NFTs be used? Malouf believes the application of NFTs in the real world is an alternative use case from the art collectible hype we’ve come to see in space.
“Imagine when real estate titles eventually turn into NFTs and real-life real estate transfers happen as easily as you can transfer NFTs,” Malouf said.
However, an important aspect must be considered, especially when integrating underlying contracts such as real estate titles into a blockchain. It’s a matter of bridging digital assets from one chain to another. We are currently in the infancy of cross-chain bridging, with many solutions that do not directly resolve the migration of digital assets or pose security risks to sensitive data. It could be argued that the larger scale application of NFTs to real-world use cases is hampered by the volatility of multiple chains and the lack of bridging solutions available. Therefore, the solution may lie in a capable and powerful chain that can drive real-world adoption on a significant scale.
As institutional and retail investors, businesses and consumers adapt more to this exciting new space, new use cases and opportunities will emerge. The fast-growing web 3 space calls for more fruitful discussions like the panel above to embrace positive business solutions, capitalize on investment opportunities, and advance a new frontier in digital asset ownership.
Watch BSV Global Blockchain Convention Dubai 2022 Day 1 here:
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