20 min readIf you’ve been online for any amount of time, I’m sure that you’ve come across a video, an article or a slew of memes about the Metaverse.
Most focus on the avatars’ lack of legs and Mark Zuckerberg’s inability to “human”.
But what is the Metaverse? In very simple terms, it’s an entire digital world with all it’s trappings, including real estate and even jobs.
And more significant for us: an economy.
It’s like Second Life, but with more data mining.
I say data mining because it was created by Meta (formally Facebook, but that whole Cambridge Analytica deal warranted a name change and rebranding).
Mark Zuckerberg and others claim the Metaverse is beyond just a concept; it’s the future of work, entertainment, fashion, and much more.
This is still to be proven. Remember that Silicone Valley doesn’t run on binary code; it runs on hype. Luckily for us, that hype can be monetised through Metaverse coins.
Structures of the Metaverse
OK, so hopefully you understand the overarching concept of the Metaverse, but what are the nuts and bolts of it?
First, you’ll need a very expensive Oculus VR headset, also produced by Meta (Oculus was acquired in 2014 by Meta for a meager $2 billion…well, when it was still Facebook, sorry Mark, if it’s on the internet it’s there forever).
Then you need an avatar – a digital representation of yourself or representation of what you would like to be (see the movie Ready Player One if that confuses you), without legs (sorry, I had to jump on the Metaverse hate-train), and then you are free to participate in the Metaverse.
But you aren’t here to play basketball at all the locations the Metaverse offers, click the link to find out what that means, you’re here to discover the best Metaverse Crypto coins.
What are Metaverse tokens?
So, Metaverse tokens is the currency used in Mark’s digital universe. These are digital currencies, most based on blockchain tech, allowing you to participate in the Metaverse’s economy. They allow you to purchase everything from virtual land, clothes for your avatar, and in-game gear and digital art – usually as NFTs.
Although the Metaverse’s concept may be shaky, blockchain technology has proven multiple times in recent history its effectiveness as a financial ledger and economic infrastructure, allowing for secure transactions that can not be duplicated or counterfeited.
Its decentralised nature means that changes are proposed and accepted by the community using the currency, not a single entity or certain centralized organizations.
Blockchain based currencies have also proven their worth as exciting investment and trading vehicles.
You can buy, sell, and trade these tokens in virtual marketplaces, which creates a bustling and profitable digital marketplace. Some tokens are not just for buying things; they’re like keys that unlock special features or “powers” within certain Metaverse platforms.
In the Metaverse, tokens also function as your digital ID in the virtual world. Smart contracts, which are like self-executing digital agreements, make transactions happen seamlessly, cutting out the middleman.
But, fair warning, not all tokens are created equal. It’s like navigating a digital Wild West out there. So, before you dive into the Metaverse economy, do a quick tech-check on those tokens. Make sure they’re legit and have a real intrinsic value in the Metaverse or the specific Metaverse space you’re exploring.
If you are wondering about the value of digital assets that are used in the Metaverse project, I bring to your attention Exhibit R – Robux (or Roblox Dollars more officially), which has seen a huge surge in value, and has a $19.65 Billion market capitalisation.
Weird comparison, but at current rates the Robux is worth 0.0125 USD – more than the Ruble (0.010 USD), but a little less than the creatively named Afghan Afghani (0.013 USD).
What is the Metaverse?
When tech big shots like Mark Zuckerberg or Satya Nadella describe it, the Metaverse seems like the next big thing on the internet. But what is it? Is it a high-tech video game? An oddly awkward, less functional version of Zoom? Nailing down its exact nature is a bit like nailing jelly to a wall.
It’s been a year and a half since Facebook unveiled its makeover to Meta and declared its commitment to the “Metaverse” future. Since then, the term itself has become somewhat opaque. Meta is cooking up a virtual reality social hub, Roblox is busy with user-generated video games, and some companies are serving up glitchy game realms with NFTs thrown in for good measure. Quite the buzz-word-salad no?
From startups with a niche focus to tech giants, there’s a shared argument about the haziness around the Metaverse because, to be fair, it’s still under construction. It’s too fresh to be placed into a single definition. Think about the internet in the 1970s – it existed, but not everyone foresaw how it would be used or navigated.
On the flip side, while major tech players are diving into generative AI, a considerable amount of buzz (and bucks) has already been invested in promoting the concept of the Metaverse. Facebook, especially vulnerable after Apple’s ad tracking update, created its vision of a future where everyone curates a digital wardrobe, and, let’s face it, wants to cash in on selling virtual clothes. Yet, Facebook isn’t alone in eyeing the financial perks promised by Metaverse hype.
And that exact hype is bringing in big names – including Apple, Amazon, NVIDIA, Microsoft, Unity, and Epic Games, with Adidas already employing designers to create avatar clothes.
And this is where Metaverse coins come in, the native token or tokens used to purchase and sell items in the Metaverse.
Why invest in Metaverse Crypto?
As demonstrated by the Robux example, there is money to be made with in-world currencies that are only used within a specific virtual world.
Especially if there is already an audience using it.
Another great example of profit making in very specific virtual worlds, is CSGO.
CSGO is an online game, which largely revolves around players being put in combat scenarios pitted against other gamers.
Badges of honor within this community are “skins”, or custom colorways for weapons and gear.
There is an entire marketplace dedicated to buying and selling these skins, with some of them fetching upwards of $5,000.
One skin in fact, called the Karabit Case Hardened (387), sold for a staggering $200K.
So, there is value no matter how niche the market is.
The same goes for some of the most exciting and best Metaverse Crypto coins.
Key features to look for in Metaverse Crypto
So you’re intrigued, there’s gold in “them thar” virtual hills. But how do you go about assessing these Metaverse projects and their respective Metaverse Crypto tokens?
There are a few things you need to look out for, first and foremost usability, scalability, ongoing developer and community support, and interoperability.
If you aren’t familiar with any of those terms or need clarifications, hold your virtual horses, we’ll cover them in the section below.
Usability
Metaverse projects have to have a purpose and a function within the parameters of Mark’s digital world. If it is used as native Cryptocurrency, or in-game currency for a game or shared digital space, then one of your boxes is checked.
If not, you might be falling for empty hype or so-called vaporware.
Scalability
A universal truth, no matter the digital assets you are looking, at is scalability. Are the Metaverse coins that you are looking at able to handle more users, transactions, and data, or is there a low cap, meaning future potential is greatly restricted?
Community and developer support
This can be considered a subcategory under scalability, because a native Metaverse coin that is embraced by the community and has developer support will keep at least some of its value. If a Metaverse Crypto coin is abandoned on the other hand, it could have zero value.
Interoperability
Although a fancy word, interoperability simply means the ability Metaverse projects have to communicate with other Metaverse tokens.
As the point of the Metaverse is to create a space that is highly interconnected – it is easy to assume that the best Metaverse coins will have the ability to integrate easily into this sphere and ethos.
Ones that do not, are likely to go the way of the Dodo.
The top Metaverse Cryptos in 2024
As mentioned in the previous sections, the Metaverse is still a virgin market – it’s still being developed, added to, and more and more people are entering the world.
And if you doubt that big money is looking at it as well…here are the top Metaverse Crypto coins that Forbes (yes, that Forbes) recommends.
Internet Computer (ICP)
This digital trailblazer has a crazy market cap of $1.8 billion! Developed by the Swiss nonprofit organisation Definity Foundation.
ICP has a grand mission: to shake up the centralised internet we know and love, and introduce a decentralised alternative.
Think of today’s internet, dominated by giants like Alphabet and Amazon. Now, imagine a more inclusive and open-source internet – enter Internet Computer, making its debut in May 2021.
This visionary project wants to empower users with the freedom to explore a new online world built on smart contracts, promising quicker speeds and reduced computational costs.
And yes, the irony of it being hosted in an environment owned by one of biggest internet companies in the world, which contributes to the centralised nature of today’s internet, is not lost on me. But I digress.
With heavyweight supporters like venture capitalist Andreesen Horowitz, Internet Computer made quite the entrance, soaring to a staggering market cap of over $45 billion when its token traded at around $700.
While the journey has been a rollercoaster, and the initial highs have settled, ICP remains a noteworthy player in the crypto landscape, backed by a mission to revolutionise our online experience.
Sure, the excitement might have simmered a bit, and the price isn’t dancing in the clouds like before, but Internet Computer still stands tall as one of the larger Cryptos, continuing its journey with enthusiasm and a commitment to a more decentralised online future!
Stacks (STX)
Stacks market cap is a stunning $858 million and is based on the first real-world Crypto Bitcoin (BTC). While BTC might be the granddaddy of blockchains, its gig in the Metaverse got a facelift courtesy of Stacks.
Stacks is the layer-one blockchain that piggy-backed onto Bitcoin’s blockchain through a unique proof-of-transfer (PoX) mechanism.
With this nifty tech move, Bitcoin miners can put some of their BTC into the mix to mint fresh STX tokens. And if you’re holding onto STX coins, you can stack them (not stake them) to rake in some BTC rewards.
But Stacks isn’t just doing this for proof-of-concept; it’s got a mission. Its main goal? To jazz up the oldest and most secure blockchain in the world, Bitcoin, by bringing it into Web3 with decentralised apps (dApps) and smart contracts.
Founded by some heavyweights in the venture capital arena, including the brains behind Winklevoss Capital, Y Combinator, and Digital Currency Group, Stacks is here to make the OG blockchain even more interesting.
Here’s a nugget for you: Stacks 2.0 snagged the title of being the first Cryptocurrency to get the nod of approval from the Securities and Exchange Commission (SEC).
It kicked off its mainnet journey in January 2021, setting a precedent that may be followed by other Metaverse Crypto coins projects.
Axie Infinity (AXS)
Axie Infinity (AXS) boasts a market cap of $835 million, and made waves in the Crypto realm amidst the challenges of the Covid-19 pandemic, emerging as a pioneering “play-to-earn” game, which was then followed by many Metaverse games, setting a virtual reality precedent for platforms like Sandbox and Decentraland.
Drawing inspiration from beloved classics like Pokémon and Tamagotchi, Axie Infinity follows a familiar format.
Players engage in strategic battles between endearing monsters, competing for in-game tokens.
What sets Axie Infinity apart is its residence on the blockchain, where monsters are acquired as NFTs (Non-Fungible Tokens), and the resultant tokens, AXS, function as a Cryptocurrency actively traded on the market.
During the pandemic, AXS gained considerable popularity as an avenue for individuals to generate income amid lockdowns.
However, as the play-to-earn model gained traction, concerns arose about its hierarchical structure.
Wealthier investors, called scholars, could acquire high-value NFT monsters, subsequently leasing them to players – referred to as workers – in less affluent regions.
Axie Infinity has particularly gained immense popularity in the Philippines, Venezuela, the U.S., Thailand, and Brazil.
Players, while receiving a portion of the earnings for their gameplay, found themselves financially restrained when it came to purchasing the NFTs directly, necessitating the involvement of intermediaries.
Despite the critiques, Axie Infinity continues to be a notable player in the evolving landscape of Crypto-based gaming.
The Sandbox (SAND)
The Sandbox (SAND) is considered to be one of the top Metaverse coins, and not only because it commands a $804 million market cap, standing as a virtual reality world adorned with native tokens facilitating transactions with in-game digital assets.
Much like MANA in Decentraland, another prominent Metaverse coin in this list, SAND holds the dual role of being earned and spent within the expansive Sandbox universe.
Investing in virtual world tokens accentuates the intricate nature of metaverse investments.
With the metaverse still in its infancy, showcasing a proliferation of platforms and navigating an environment undergoing constant evolution, identifying a definitive winner proves to be a formidable challenge.
As anticipated, the SAND token faced headwinds in the current year, grappling with the intricacies of this dynamic landscape and broader market trends working against it.
The success or failure of the Metaverse’s ambitions remains a subject of contemplation, contingent upon the ascent of specific games, platforms, and applications over others.
Presently, SAND asserts itself as one of the predominant entities in this burgeoning domain.
Decentraland (MANA)
You really can’t talk about Metaverse coins, and Sandbox, without mentioning Decentraland.
MANA has been one of top Metaverse coins since the enviroment’s…world’s…platform’s? inception.
Decentraland (MANA), has a market cap of $712 million, which as a Metaverse project, carves out a distinct place in the virtual landscape.
Operating as a virtual reality (VR) platform underpinned by the Ethereum (ETH) blockchain, Decentraland employs its native token, MANA, as the cornerstone for conducting transactions within its digital domains.
In this expansive online universe, users wield the freedom to craft avatars and explore at their discretion.
The Decentraland marketplace beckons, offering the opportunity to acquire land, outfit avatars in stylish attire, indulge in accessories, and more.
Notably, the content and applications thriving within this digital world are open to monetisation.
The vision for Decentraland extends beyond a mere virtual space; it aspires to be a hub where users converge, engaging in daily transactions and business dealings.
It’s a bustling metropolis in the Metaverse, designed for users to create, explore, and trade.
Yet, as discussions unfold regarding a dip in user numbers, the Metaverse landscape raises questions.
Will projects like Decentraland solidify their presence as the go-to spaces for socialising and commerce, or will conventional gaming still hold the upper hand?
The fate of this ambitious Metaverse venture remains a topic of speculation in the ever-evolving realms of virtual exploration.
Theta Network (THETA)
Theta Network (THETA), has proven a formidable player in the digital landscape with a market cap of $756 million.
In a world dominated by streaming behemoths like YouTube, Netflix, Amazon Prime, and Twitch, Theta stands out as a purpose-built blockchain tailored specifically to video streaming.
Theta’s mission is ambitious, yet aligned with many other Metaverse Crypto project ideals; to decentralise video streaming through a peer-to-peer video delivery network.
The underlying promises echo the Metaverse ethos—reducing costs, redistributing power from corporations to the masses, and eliminating unnecessary intermediaries.
According to Theta, this vision seeks to ensure content creators get a more significant share of the pie, while making video content more affordable for consumers.
The mechanics of Theta Network are ingenious; as users consume video content, a portion of their computer power and spare bandwidth is harnessed to relay these videos to fellow users on the network.
As a token of appreciation, users earn THETA tokens. The brilliance lies in the network effect; the more participants, the higher the streaming quality and speed for everyone involved.
Traditional players in the video streaming arena are taking note.
Theta’s advisory board boasts industry heavyweights, including Twitch co-founder Justin Kan and YouTube co-founder Steve Chen, signifying the platform’s credibility and potential impact on the evolving landscape of video streaming.
ApeCoin (APE)
ApeCoin (APE), is a Metaverse rising star with a market cap of $661 million. Despite being one of the newer Metaverse crypto projects, ApeCoin has swiftly asserted itself as not only one of the most significant, but also one of the newest players in the Metaverse coin arena.
Its primary purpose is to fuel the thriving ecosystem revolving around the immensely popular Bored Ape Yacht Club.
The Bored Ape Yacht Club stands as a titan among non-fungible token (NFT) art collections, particularly renowned for its success.
The entry point for ownership of one of these blockchain art monkeys is estimated at an impressive $100,000, while its counterpart, the Mutant Ape Yacht Club (MAYC), demands a floor price of $18,500, according to CoinGecko’s data.
To leverage the widespread appeal of these esteemed apes, APE took center stage with a strategic airdrop to every holder of a Bored Ape or Mutant Ape NFT in March 2022.
APE’s overarching goal is to facilitate voting and governance matters, alongside serving as a means for transactions within the captivating “Ape Metaverse.”
As ApeCoin continues to swing through the Metaverse canopy, it aims to contribute to the vibrant tapestry of decentralised governance and transactions within this unique digital realm.
Case studies: successes and failures
As a platform backed by internet giants, there aren’t many references available pointing to failed Metaverse projects.
We do have numerous examples outside the Metaverse world though of extremely successful gaming ecosystems with in-built economies, where you can buy virtual land and virtual goods.
There are numerous play to earn games emerging as well, fuelled or backed by blockchain networks and a governance token.
Some of the top rated Metaverse projects are receiving a lot of attention – and as we know in the world of Crypto coins, attention means climbing prices.
There is tons of potential in the Metaverse, and it’s value-add to the people that want to play games, or purchase virtual goods or virtual items in a decentralised marketplace, is constantly growing.
Additionally the open world model, is a proven one, with a huge fanbase.
The real question is, how much longevity is there?
We have seen, time and time again, tech giants dropping unprofitable projects, Google being the most egregious example, after losing interest or wanting to invest in new projects.
On the other hand, if you are looking for short term potential, I couldn’t think of a better place.
Risks and how to manage them
Metaverse coins come with most of the same risks other Cryptos carry. It’s new and very volatile, meaning it is also relatively unpredictable, especially compared to other markets.
Of course these disadvantages in the long term may become benefits.
The risks
Supply and demand
Even the best Metaverse project has to follow the cardinal rule of the markets – supply and demand.
We’ve covered this to death in most of the articles we write, but just to reiterate, when supply is high and demand is low, prices go kaput. And when demand is high and supply is low, prices go to the moon.
Unfortunately (or fortunately, that is still to be decided) the demand for these Metaverse Cryptocurrencies, is directly connected to the demand for the Metaverse itself.
If people do not warm up to the idea of living their life in a completely virtual world, then the currencies used to buy virtual real estate, in an open world (and a world that can be, in theory, infinitely expanded) and other virtual items, then demand will wain.
Company support
Although the currencies are decentralised, the platform they exist on is not.
If one day Mr. Zuckerberg et all decide to shut the entire project down, and they might, there is precedent here, the Metaverse Cryptos will only have value on Crypto exchanges.
How to avoid risk
Read the news
Since Meta is a publicly traded company, they need to disclose certain data related to their operations.
Keeping an eye out for these types of announcements, or changes, can help you better surmise if the Metaverse is going well and, by extension, the Cryptos that fuel its economy.
The community
The great and weird thing is that you can gauge the health of the Metaverse’s economy yourself.
Strap on your Zuckerberg VR headset and enter the world he created, to see the amount of people that are in the Metaverse, buying things and just generally using the in-world Cryptos.
Conclusion
So, although the Metaverse and the Cryptos that fuel its economy are exciting, there are numerous risks that are not shared with, let’s say, more mainstream Cryptos.
But with the necessary due diligence, research and risk appetite, you can take advantage of this new and exciting market.
Author
Risk Disclaimer
