The place where the metaverses meet
Most people think that the Metaverse will be the next online avatar. The Metaverse will use Web3 to power a variety of virtual economic models, just like the internet does today. These models may have come from the gaming, social networking, or financial services industries. Even so, as long as different models live in the Metaverse, they will keep crossing paths and talking to each other.
People in the Web3 world sometimes think of Decentralized Finance (DeFi), GameFi, and SocialFi as separate verticals or businesses. Over the last few years, these three Web3 subclusters were made at different times. As the area grows and the idea of the Metaverse grows, it is more likely that they will be added to a Metaverse experience as horizontals.
All of these economic theories, which are still in their early stages, are based on cryptocurrencies. Most of what is already in place in DeFi, GameFi, and SocialFi are separate, decentralized programs (DApps). But that is about to change when the Metaverse joins the family.
Let’s talk about why it’s so important to tell the difference between vertical and horizontal capacities. When we look at a GameFi program in a metaverse, we can see that it is a focused place to play games that draws people in. When the game is over, they are happy and get off the platform.
The same could be said about the niche apps DeFi and SocialFi. Verticals of the apps are available for people who visit the site to do DeFi transactions or to connect with their friends in ways that are like Twitter or Instagram. As an experience to remember, they stand out.
The Metaverse is more than just a group of programs, though. In an economic model that can be scaled up, it’s more like a collection of conscious and unconscious user experiences. The two types of experiences, ones that you are aware of and ones that you are not, are called verticals and horizontals, respectively.
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To understand how different applications interact in the Metaverse, it is important to know how conscious and unconscious experiences are different. Should they stand out or should they fit in?
Let’s take a look at some examples of conscious and unconscious experiences. If a person walked up to the ticket window, took £10 out of their wallet, and bought a ticket for a train to London, that would be a conscious user experience. If a person walks into the station, taps the barrier with their phone using near field communication (NFC), and then goes through to board the train, it is an unconscious act.
One of the biggest goals
The goal of most fintech apps is to make financial transactions as simple, easy, and automatic as possible. You don’t have to compete with your friend or coworker in a “Call of Duty” mission. With Instagram likes and views, the competitive spirit could be turned into a game.
To use that word again, all three paradigms—DeFi, GameFi, and SocialFi—would be embedded experiences in the Metaverse. This doesn’t mean that there won’t be more metaverses like the Otherside that can be played in. But many of these paradigms will be the result of unconscious experiences, which means they will be more horizontal (embedded) than vertical (standing out from unconscious actions).
Eexperiences peculiar to an ecosystem
In the future, trade and making things of value will happen across jurisdictional and national borders. Each will look at a different ecosystem. So, each use case must be made to fit a certain ecosystem.
The futures of DeFi, GameFi, and SocialFi may be built in. But this embedding can only be used in a place where everything works well. The Metaverse, which brings together different user functions, will have elements that are both useful and fun to play with.
For example, a metaverse that can be used for DeFi will need to allow microtransactions. In order for SocialFi to be a part of a metaverse, there will need to be a place where both artists and users can contribute and get paid and recognized for their work.
Now, let’s take a look at what we might call embedded DeFi. Many of these have already been used in a lot of metaverses.
Built-in DeFi
Microtransactions, nonfungible token (NFT)-based financing, renting mechanisms, NFT marketplaces, micro token economies, token exchanges, and a lot of other bells and whistles are emerging as this market grows and will help the Metaverse economy. Each of these parts has a specific role in making the Metaverse’s economic structure scalable.
For example, e-commerce is already being tried out in a number of Metaverse ecosystems. Picture someone walking into an art show with a nice bag of NFTs. The person doesn’t have enough money, and the art is expensive. If NFT-lending has been turned on, the user could use their Ape or Punk to borrow some USDC to buy the painting.
In the above example, the user interface is key to making the transaction go smoothly. If the environment has a native NFT, it might make more sense to use that instead of the Ape in the example above. These NFTs will become more valuable as the user spends more time in the ecosystem, especially if there are ways to level them up.
Users can use these assets when they put in more time and effort to make their ecosystem assets, like NFTs, real estate, or in-game items, worth more money. These assets will be important parts of DeFi.
GameFi was built in
The term “GameFi” is often used to talk about important play-to-earn systems like Axie Infinity. But sometimes making an experience more like a game is just as important as GameFi. Most of the time, these traits don’t need to be hard video games like Fortnite. They might use casual games, leaderboards, loot boxes, battle passes, and raffles to make things more like games.
Like the DeFi components that improve the economic model, the GameFi components are necessary to keep users interested and keep investment in the platform. They also help keep users coming back.
Both DeFi and SocialFi are needed for GameFi’s parts to work. If someone wants to be on a leaderboard, for example, they can borrow or rent an NFT. Like the last point, the leaderboards can only be useful if the SocialFi parts are made with players and producers in mind.
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Last but not least, SocialFi keeps the essence of the creator’s economy when it is used in a metaverse. In a metaverse, there are usually more than one person or group involved, such as asset developers, asset holders, players, and/or consumers. A sustainable model is made when each of these participants or economic actors gets incentives that are proportional to the value they bring.
Adding games to this site often goes against SocialFi’s guiding principles. For example, people who play and win over and over again move up the ecosystem’s ladder. So, they will gain experience points. In a similar way, creators will get high scores if their assets do well in the ecosystem.
This kind of “social swank” is also important to DeFi transactions. Creators and players who have more social points or experience points may be able to negotiate better terms when using the DeFi parts of the Metaverse. With more social swag, economic actors may be able to add value to the ecosystem faster.
Most of these Metaverse activities happen on-chain, and ideas like soul-bound tokens can be used to give a Metaverse economy more legitimacy.
We need GameFi, DeFi, and SocialFi to make the Metaverse as full as possible. Even in single-goal metaverses, these parts are important for making sure the metaverse can survive and grow.
In the end, a metaverse can only grow if DeFi, GameFi, and SocialFi work together perfectly. In short, DeFi would be in charge of the money, GameFi would be in charge of the experience, and SocialFi would be in charge of the credibility of the economic actors.
For a metaverse to be scalable for business, it needs the DeFi parts. Without the GameFi parts, there wouldn’t be a reason for the community to keep coming back. Last but not least, the ecosystem wouldn’t have any credibility without the SocialFi part. The parts of SocialFi make sure that users and producers get credit for their contributions that add value.
This is not to say that a metaverse based on football, Hollywood, or art won’t exist. But these metaverses will still need gameplay, microtransactions, and rankings of ecosystems. A number of SAAS platforms already offer these bells and whistles, which lets teams focus on the main goal of their metaverses. All of these things must work together for the Metaverse’s users and creators to have an economy that works, a platform that keeps people coming back, and an experience that feels real.
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